Former CEO of La Quinta Communication Services Company Pleads Guilty to Charges He Defrauded Major Lender to Tech Startups
RIVERSIDE, California – The former CEO of a La Quinta-based communication services company pleaded guilty today to federal criminal charges that he fraudulently obtained $5 million in bank loans by, among other things, submitting sham financial documents that falsely stated his company’s net worth.
Richard Loren Lewis, 67, of La Quinta, pleaded guilty to a two-count information charging him with bank fraud and making a false statement to a financial institution.
According to his plea agreement, from April 2013 to April 2016, Lewis schemed to defraud Silicon Valley Bank, a Santa Clara-based commercial bank that funds start-up technology companies.
Lewis, who was the CEO of Blue Wave Media Inc., and served on its board of directors, fraudulently obtained loans from the bank by preparing and causing to be prepared false financial documents, including balance sheets and income statements, which falsely overstated, among other things, Blue Wave Media’s net worth, liquidity, and revenue.
Based on the false financial documents, Lewis caused Silicon Valley Bank to approve the loans to Blue Wave Media and deposit the loan proceeds into a bank account he controlled. Lewis’s misrepresentations caused the bank to approve four loans totaling $5 million.
Lewis admitted he executed the scheme by willfully causing a loan and security agreement to be signed with Silicon Valley Bank in April 2013 to secure a $500,000 loan. In January 2014, he submitted an amendment to the agreement to the bank to secure an additional $500,000 loan. In June 2014, Lewis willfully caused another amendment to the agreement to secure a $1 million loan, and, in April 2015, Lewis signed a third amendment to the agreement with the bank to secure a $3 million loan.
As a result of Lewis’s fraudulent scheme, Silicon Valley Bank sustained actual losses of approximately $3,414,064, according to the plea agreement.
United States District Judge John W. Holcomb has scheduled a July 30 sentencing hearing, at which time Lewis will face a statutory maximum sentence of 30 years in federal prison.
The FBI investigated this matter.
Assistant United States Attorney Robert S. Trisotto of the Riverside Branch Office is prosecuting this case.