Arrest Made in Connection to Small Business Administration Loan Theft

03/27/2023 05:29 • Digital Disruptors • 115 views

On March 27, the United States Department of Justice (DOJ) announced on Thursday that Charles Riley Constant (aka Chuck Constant) was arrested for “allegedly stealing and laundering more than $1 million in loans from the Small Business Administration (SBA), including using fraudulent proceeds to purchase cryptocurrency ATMs.”.

The United States has seized 18 encrypted ATMs purchased using fraudulent SBA loans and arrested their owners

The United States Department of Justice (DOJ) has announced on March 27 that Charles Riley Constant (also known as Chuck Constant) has been arrested for allegedly stealing and laundering over $1 million in loans from the Small Business Administration (SBA), including using fraudulent proceeds to purchase cryptocurrency ATMs.

What Happened?

According to a DOJ press release, Constant is accused of submitting applications for loans under the names of several companies that he did not own or operate. He then received approval for the loans, all of which were guaranteed by the SBA. The loans were intended to help small businesses weather the economic challenges brought on by the COVID-19 pandemic.
Instead of using the funds for their intended purpose, Constant is alleged to have used the money to purchase cryptocurrency ATMs, which he owned and operated through his company, Chuck’s ATM Inc. He then laundered the proceeds of the sales of the cryptocurrency ATMs through several bank accounts, according to the DOJ.

The Consequences

If convicted, Constant faces a maximum sentence of 30 years in prison for each count of theft and money laundering. In addition, he could face fines and restitution.
This case highlights the importance of due diligence in lending processes, particularly during the COVID-19 pandemic. The need for expedited lending has put additional pressure on banks and other financial institutions to process loan applications quickly, potentially sacrificing the time and resources necessary to properly vet potential borrowers.

How Does This Impact Small Businesses?

Small businesses are particularly vulnerable to fraud during economic downturns. As government agencies provide assistance programs to help keep small businesses afloat, unscrupulous individuals may attempt to take advantage of these programs for their own financial gain.
Increased scrutiny from law enforcement and regulatory agencies is necessary to prevent fraud and theft in lending programs. While the majority of borrowers are honest, lenders must remain vigilant to protect themselves, the Small Business Administration, and the wider economy from financial fraud.

What Should You Do?

As a business owner, it is essential to protect your finances by remaining vigilant and identifying fraud before it can cause financial harm. Be wary of unsolicited offers of assistance and do not share sensitive financial information with unverified sources. If you suspect fraud, report it to the appropriate authorities immediately.

In Conclusion

Financial fraud is a major problem that affects individuals and businesses alike. In the case of Charles Riley Constant, the United States DOJ has taken swift action to bring an alleged perpetrator to justice. This arrest emphasizes the need for increased vigilance in lending and financial transactions to prevent fraud and protect businesses from financial loss.

FAQ’s

1. What is the Small Business Administration Loan program?
The Small Business Administration provides financial assistance to small businesses through various lending programs, including loans, grants, and loan guarantees.
2. How does SBA ensure the security of loans?
SBA has a number of safeguards in place to prevent fraud and mitigate risk, including credit scoring, underwriting standards, and monitoring and reporting.
3. What should I do if I suspect fraud in SBA loan programs?
If you suspect fraud in SBA loan programs, you should report it immediately to the SBA’s Office of Inspector General or the Financial Crimes Enforcement Network.

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