LENDER TO PAY $300,000 TO SETTLE ALLEGATIONS INVOLVING SMALL BUSINESS ADMINISTRATION LOAN
Garsh Lending LLC, a lender located in Miami, has agreed to pay the United States $300,000 to settle allegations involving a Small Business Administration (SBA) loan, the Justice Department announced today.
The allegations relate to the SBA’s 504 loan program, which offers small businesses long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A portion of the financing for 504 projects comes from independent third party lenders. Garsh, acting as the third party lender in this instance, loaned the borrower money and agreed to provide the SBA written notice of default on the loan. The United States alleges that the borrower missed payments on its loan with Garsh before the 504 loan had closed, yet Garsh failed to provide the required notice of default. The borrower never made any payments on the 504 loan, which was backed by an SBA guarantee.
“The SBA offers valuable assistance to small businesses and contributes to our nation’s economic development,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “The Justice Department will continue to protect the integrity of these important programs and safeguard the taxpayer dollars spent to make them effective."
“The SBA is an important program aimed at helping small businesses to expand and modernize,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “Compliance with loan repayment requirements is crucial to the success of the program. The U.S. Attorney’s Office will continue to help monitor and enforce compliance to protect the soundness of the SBA program.”
SBA General Counsel Sara Lipscomb said, “Increased lender oversight is a priority of the Office of General Counsel, and this recovery is part of that commitment.”
The settlement resulted from a collaborative effort by several federal agencies, including the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida and the SBA.
Settlement Agreement (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.