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Pinnacle Bank Embroiled in False Claims Lawsuit
A federal investigation has uncovered evidence of false claims by Pinnacle Bank, a leading financial institution in Wyoming, the Grimy Times has learned.
According to U.S. Attorney Christopher A. Crofts, the government has intervened in a lawsuit against Pinnacle Bank in the U.S. District Court for the District of Wyoming.
The whistleblower lawsuit, originally filed in May 2012 by Hospitality Management, Inc., under the qui tam provisions of the False Claims Act, alleges that Pinnacle Bank made false statements to the United States Small Business Administration (SBA) regarding a loan under the SBA’s ‘504 Loan Program.’
The 504 Loan Program is designed to provide small businesses with long-term financing to cover a portion of the cost to acquire major fixed assets. If a borrower defaults on a 504 loan, the United States must expend taxpayer dollars to repurchase the debenture used to fund the loan pursuant to the guarantee, effectively buying the bad debt.
Specifically, the complaint alleges that Pinnacle Bank falsely certified to the SBA that at the time of closing on permanent financing for the AmericInn Lodge and Suites located in Laramie, Wyoming, it had no knowledge of any un-remedied substantial adverse change in Columbine’s financial condition since the date of the application for the SBA loan, that Columbine was current on its payments to Pinnacle and not otherwise in default of the loan, and that Pinnacle had disclosed to the SBA all material information known to it.
The False Claims Act permits the government to recover three times its damages plus civil penalties. The private plaintiffs who bring these claims are entitled to receive a share of any funds recovered through the lawsuit.
The government has asked the court for 30 days to file its own complaint stating the United States’ allegations.
Mandatory Facts:
Defendant: Pinnacle Bank
Crime: False Claims
City and State: Wyoming
Date: May 2012
Sentence or Outcome: Ongoing litigation
Dollar Amounts: None specified
Key Facts
- State: Wyoming
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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