Former bank manager sentenced to a year and a half in prison for making false statements related to small business loans
FOR IMMEDIATE RELEASE
September 29, 2011
NEWARK, N.J. – Nathan C. Buschman, 32, of Hopatcong, N.J., was sentenced today to 18 months in prison for falsifying loan documents so applicants could obtain commercial loans backed by the U.S. Small Business Administration (“SBA”), U.S. Attorney Paul J. Fishman announced.
Buschman previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an Information that charged him with one count of making false documents and concealing material facts from the SBA. Buschman was arrested on September 16, 2010, in a coordinated law enforcement takedown of 53 individuals in connection with widespread, sophisticated identity theft and fraud.
According to documents filed in this case and statements made in Newark federal court:
Buschman was a former branch manager for Washington Mutual Bank at a branch in Edgewater, N.J. Washington Mutual Bank later became JP Morgan Chase Bank. The bank issues commercial loans and lines of credit to business owners, many of which are guaranteed by the SBA. Under the SBA program, if a borrower defaults on an SBA guaranteed loan, then the bank is eligible to seek reimbursement from the SBA up to the percentage of the guarantee. The goal of the program is to reduce the risk to lenders, thereby permitting otherwise qualified small businesses to obtain financing unavailable to them on reasonable terms through normal lending channels.
To obtain an SBA guaranteed loan, the bank required applicants to truthfully complete a loan application and provide information about the business, such as the business’ name, physical address and gross receipts, and to supply certain records, such as tax returns. To verify the applicant’s information, the bank required Buschman or employees under his supervision to physically visit the business location and complete a “Business Banking Site Visit” form. Buschman was required to truthfully certify on the form that he conducted an in-person inspection of the business establishment seeking the loan.
Buschman admitted that at various times in 2007, he falsified site visit forms by
signing them, though he had not conducted any inspection. For example, Buschman admitted that on June 15, 2007, an applicant applied to the bank for an SBA guaranteed commercial loan on behalf of a business with the initials “M.W.” M.W. was a sham business with no physical location. Buschman acknowledged that he falsified the form related to this loan, thereby causing the bank to issue a $100,000 SBA guaranteed loan to the sham business. The loan went into default, resulting in a financial loss to the bank of approximately $98,000.
In addition to the prison term, Judge Wigenton sentenced Buschman to three years of supervised release and ordered him to pay restitution in the amount of $199,059.50.
U.S. Attorney Fishman praised special agents of the SBA Office of Inspector General, Eastern Region, under the direction of Special Agent in Charge Aaron Collins; detectives from the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives Steven Cucciniello; and detectives and officers from the Englewood Police Department, under the direction of Chief of Police Arthur O’Keefe, for the work leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Jane Yoon and Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Gregory E. Tomczak Esq., Montclair, N.J.