Former Woodland Park Residents Found Liable for $884,666.09 in Unpaid U.S. Small Business Administration Loan Guarantees

DENVER – U.S. Magistrate Judge Craig Shaffer recently ruled that Robert and Marcia Konczak are liable to the United States in the sum of $884,666.09 arising from SBA loan guarantees that they failed to pay and fees associated with collection efforts, U.S. Attorney John Walsh announced.  The Konczaks were sued in March 2014 by the U.S. Attorney’s Office on behalf of SBA for their outstanding debt, after the SBA and the Department of Treasury did not succeed in their attempts to collect the debt.

According to court documents, in 2003, “Konczak’s Koncepts,” a Woodland Park restaurant company run by the Konczaks, obtained a $684,000 loan from the SBA under its “504 loan program.”  Under that program, the United States, acting through the SBA, guaranteed 100 percent of the Konczaks’ debt through a debenture. As part of the loan terms, the Konczaks also guaranteed the loan, making them personally liable for the debt.  When Konczak’s Koncepts failed in 2007, it also defaulted on its obligation to repay the loan.  The SBA then honored its debenture and paid the loan off, assumed the debt, and attempted to recover on the Konczaks’ guarantees.

But the Konczaks refused to pay.  After several years of unsuccessful collection efforts, the SBA referred the matter to the U.S. Attorney’s Office for enforcement. After a trial, U.S. Magistrate Judge Shaffer ruled that the Konczaks are  liable for the full amount of the loan guarantees, plus other mandatory statutory fees resulting from the SBA and Department of the Treasury’s collection efforts.

This case was handled by Assistant U.S. Attorneys Juan G. Villaseñor and Elizabeth M. Froehlke of the office’s Civil Division.