Man Pleads Guilty to Cheating 1,700 Victims in $1.2 Million Loan Scam
NORFOLK, Va. – A Virginia Beach man pleaded guilty today to an internet-based loan scam that cheated approximately 1,700 victims out of $1,287,000. He also pleaded guilty to a separate charge of fraudulently collecting unemployment benefits during the coronavirus pandemic.
According to court documents, Ronald A. Smith, 59, and his wife and co-defendant Terri Beth Miller, 53, set up a company called Business Development Group. Business Development Group was an internet-based business that offered, in exchange for an advance fee, to assist individuals in preparing loan applications to obtain SBA-guaranteed loans. They solicited potential customers on the basis of false, fraudulent, and misleading statements and representations, including, among others, that the company was headquartered at the Trump Building in New York and had assisted well-known large companies in obtaining SBA loans. They offered a money-back guarantee, but in fact employed various fraudulent methods to deny refunds. Smith and Miller solicited approximately 1,700 customers, who paid an aggregate sum of about $1,287,000 in advance fees. The vast majority of these customers did not receive an SBA guaranteed loan. In fact, Smith did virtually nothing to even attempt to obtain loans for their customers. Smith was convicted for nearly the identical scam back in 2006 and received a seven year sentence.
In addition, Smith made a false application to the Virginia Employment Commission for unemployment benefits, including an additional $600 per week in federal pandemic unemployment compensation authorized under the CARES Act. He falsely stated that he was not the owner or operator of a business and that he had not received income from another source. As a result of his false statements, Smith received $9,600 in federal pandemic unemployment compensation to which he was not entitled.
Smith pleaded guilty to wire fraud, engaging in monetary transactions in criminally derived property, and fraud in connection with emergency benefits. He faces a maximum penalty of 60 years in prison when sentenced on April 2, 2021. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after U.S. District Judge John A. Gibney, Jr. accepted the plea. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-69.