News and Press Releases

Former bank manager pleads guilty to making false statements related to small business loans



FOR IMMEDIATE RELEASE
May 11, 2011


 

NEWARK, N.J. – Nathan C. Buschman, Hopatcong, N.J., admitted today that he falsified loan documents so applicants could obtain commercial loans backed by the United States Small Business Administration (“SBA”), U.S. Attorney Paul J. Fishman announced.

Buschman, 32, pleaded guilty before U.S. District Susan D. Wigenton to an Information that charged him with one count of making false documents to 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, New Jersey. Washington Mutual Bank later became JP Morgan Chase Bank (the “Bank”). The Bank issues commercial loans and lines of credit to business owners. Many of these commercial loans 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, its physical address, and gross receipts, and to supply certain records, such as tax returns. Furthermore, to verify the applicant’s information, the Bank required Buschman, or employees under his supervision, to physically visit the business location. Thereafter, the Bank required Buschman to complete a “Business Banking Site Visit” form. On this form, Buschman was required to truthfully certify 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 these forms, although he had not conducted any visit or inspection of the business. For example, Buschman admitted that on or about 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 Site Visit form related to this loan, thereby causing the Bank to issue a $100,000 SBA guaranteed loan to this sham business. This loan went into default, resulting in a financial loss to the Bank of approximately $98,000.

At sentencing, Buschman faces maximum potential penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or victim loss from the offense. Sentencing is scheduled for August 15, 2011.

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 their work leading to today’s plea.

The government is represented by Assistant United States Attorneys Jane Yoon and Anthony Moscato, of the U.S. Attorney’s Office Criminal Division in Newark.

11-193                                                                                        

Defense counsel: Gregory E. Tomczak, Esq., Montclair, New Jersey

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