2 Plead Guilty to Disaster Loan Charges : Scandal: Ex-SBA officer and a student admit conspiracy involving funds for civil disturbance victims.

A former Small Business Administration loan officer and a UCLA student pleaded guilty Monday to federal charges of conspiracy and of misapplying SBA disaster loans designed to aid victims of the April, 1992, civil disturbances.

U.S. Atty. Terree A. Bowers announced that Loren Park, 25, of Vienna, Va., the former SBA official, and Hye Sun Jun, 23, of Glendale, admitted their guilt to U.S. District Judge J. Spencer Letts and are scheduled to be sentenced Sept. 13.

The SBA sent Park, who speaks Korean fluently, to California in May, 1992, to help the owners of small businesses in the Korean community who suffered losses during the riots. While here, Park befriended Jun, who wanted to obtain funds to help her parents open a grocery store, according to Assistant U.S. Atty. Nathan J. Hochman.

Hochman said Park told three Korean small businessmen applying for SBA assistance that their loans would not be approved unless they were willing to increase the amount of money they borrowed and then, in turn, lend the additional funds to Jun.

One applicant contacted the Los Angeles Police Department, and SBA officials launched an investigation. During the probe, the SBA videotaped Park and Jun accepting $29,100 in SBA loan proceeds from one of the Koreans.

The applicant initially had requested $48,000, but agreed to accept the additional $29,100, which would be lent to Jun, with Park acting as a guarantor in a separate, written 30-year loan arrangement in which interest would be paid to the Korean businessman.

Hochman said the apparent rationale for the scheme was that Jun’s parents were unqualified for an SBA loan because they did not own a business damaged during the riots.

Bowers said: “It is truly despicable when individuals who are supposed to help those in need instead manipulate the system to their own advantage.” Park and Jun face up to 10 years in prison and a $500,000 fine.

Lawyers for both defendants said they were not attempting to profit from the deal or to harm anyone. “We view this incident as a terrible mistake which Park has to face up to,” said his lawyer, N. Peter Kastopolos.

“Park decided to do a favor for Jun, not knowing it would result in the controversy it did. The record establishes that he did not tell applicants that, in order for their loan to be approved, they had to lend funds to Ms. Jun’s family,” Kastopolos said.

He stressed that there was no loss to the government as a result of the incident since the $29,100 was returned as soon as Park and Jun were confronted with the charges.

Jun’s attorney, John Vandevelde, said: “I don’t believe either of these two young people at any time intended to force this transaction on anybody.”