Michael Robert Smith Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Billings, on April 11, 2012, before Chief U.S. District Judge Richard F. Cebull, MICHAEL ROBERT SMITH, a 26-year-old resident of Miles City, pled guilty to making false statements to a bank and social security fraud. Sentencing has been set for July 11, 2012. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
In early 2011, SMITH formed Mikart Transportation with another individual, A.W. The business was located in eastern Montana and was formed as a water hauling business designed to service the booming oil business in that area. In the months after forming the business with A.W., SMITH applied for several operating loans with several banks, including Community First Bank in Glendive. Law enforcement's investigation into various loans SMITH obtained revealed that SMITH applied for loans with Social Security numbers that did not belong to him, falsified account receivables as collateral, and misrepresented ownership of collateral.
On April 28, 2011, SMITH initially applied for a loan with Community First Bank in Glendive. On the loan application SMITH used Social Security number xxx-xx-2351. During the credit check the bank received a red flag as the Social Security number SMITH provided did not match his name. SMITH explained to bank personnel when questioned about his Social Security number that he accidentally gave his wife's Social Security number, and that his was xxx-xx-2359. The first loan at Community First Bank was for a 2007 Ford Truck F-350, collateralized by the truck itself and a 2003 Peterbilt truck. SMITH told the bank that he owned the 2003 Peterbilt free and clear. Investigation revealed that SMITH never owned the 2003 Peterbilt. On May 28, 2011, the bank ran the second Social Security number and received a response that no records were found for that number, but the loan had already funded. Law enforcement has confirmed that neither of the Social Security numbers SMITH provided to the bank belonged to him. Law enforcement determined that xxx-xx-2351 belongs to E.L. and xxx-xx-2359 belongs to S.M. The bank never would have given SMITH the loan if it had known he did not own the 2003 Peterbilt and if they had received his actual credit history.
On May 16, 2011, prior to the bank running an identity check, SMITH received a second loan from Community First for $15,000 for Mikart Trucking operating expenses. As collateral for this loan SMITH pledged Mikart accounts receivable from Continental Resources, T and R Transport, and EOG Resources. Investigation confirmed that neither Continental Resources nor EOG Resources ever did business with SMITH or Mikart. While the receivables from T and R Transport were real and accurate, the bank said that it would not have made the loan if it had known that any of the accounts receivable had been fabricated.
SMITH faces possible penalties of 30 years in prison, a $1,000,000 fine and 5 years supervised release.
The investigation was conducted by the United States Secret Service.