A 50-year-old Newport Beach man was sentenced Monday to two years in federal prison and fined more than $1 million for submitting false loan applications to finance property deals in south Orange County, according to the U.S. attorney's office.
Robert Douglas Herbst filed the applications on behalf of investors and inflated their incomes to help ensure the loans would be issued, Assistant U.S. Atty. Stanley L. Friedman said. Herbst took out loans totaling more than $4 million from Glendale Federal Bank, the prosecutor said.
Herbst pleaded guilty May 13 to 10 counts of submitting false loan applications stemming from real estate deals dating back to July, 1989, and involving prime real estate property in Newport Beach, Friedman said.
Income data is usually scrutinized by the bank's staff but the deception was not discovered until after the bank lost more than $1 million, Friedman said.
"He would solicit investors to buy properties in Newport Beach and they would sign a blank loan application," Friedman said.