NORFOLK, Va. – A Virginia Beach man was sentenced today to 10 years in prison for his role in an internet-based loan scam that defrauded nearly 1,700 owners and prospective owners of small businesses out of $1,076,000.
According to court documents, Ronald A. Smith, 60, and his co-defendant and wife, Terri Beth Miller, 53, set up an internet-based company, Business Development Group, that offered, in exchange for an advance fee, assistance to individuals in preparing applications to obtain loans guaranteed by the Small Business Administration. From August 2012 through February 2018, Smith and Miller solicited potential customers on the basis of false, fraudulent, and misleading statements and representations.
“Smith’s brazen scheme resulted in over a million dollars in losses and inflicted serious financial and emotional hardship to many of his nearly 1,700 victims,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia.
The defendant and his wife offered a money-back guarantee, but in fact employed various fraudulent methods to deny refunds. Smith and Miller solicited 1,669 customers, who paid an aggregate sum of about $1,076,000 in advance fees. Most of these customers did not receive an SBA-guaranteed loan.
As part of the current case, Smith also committed fraud in connection with emergency benefits by submitting a fraudulent application with the Virginia Employment Commission for unemployment compensation, including $600 per week in federal pandemic unemployment compensation authorized under the CARES Act.
The defendant was prosecuted in the Eastern District of Virginia for nearly the identical advance-fee scam in 2006 and received a seven-year prison sentence. “Defrauding small business owners who are trying to launch, expand, or support their businesses is unacceptable,” said Amaleka McCall-Brathwaite, Special Agent in Charge of the Small Business Administration, Office of Inspector General’s Eastern Region.
“Ronald A. Smith submitted a fraudulent unemployment insurance claim with the Virginia Employment Commission, thereby stealing federal pandemic unemployment compensation benefits intended to help unemployed workers,” said Derek Pickle, Special Agent in Charge of the Washington, DC Regional Office of the U.S. Department of Labor, Office of Inspector General.
The FBI is committed to rooting out this kind of fraud. Anyone with information on SBA loan program and other COVID-19 related fraud is asked to submit a tip to the FBI at tips.fbi.gov.
Mandatory Facts:
Defendant: Ronald A. Smith
Exact Criminal Charges: Defrauding nearly 1,700 victims in a $1 million small business loan scam
City and State: Norfolk, Virginia
Exact Date: No specified date in the source
Sentence or Outcome: 10 years in prison
Dollar Amounts: $1,076,000
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Key Facts
- State: Virginia
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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