The Eliot Ness of the SBA : Crime: Special agent tracks loan fraud thieves. Since Northridge quake, pace has been fierce.

As a special agent with the U.S. government, Terri Price has been trained to operate high-tech surveillance equipment, sweep crime scenes for the most delicate clues and fire a 9-millimeter Beretta handgun with deadly accuracy.

But Price’s investigations only occasionally require surveillance, rarely involve crime scenes and never end in shootouts. The most common reaction Price gets when she finally corners a suspect is a dumbfounded look, followed by the question: “Does this mean I don’t get my loan money?”

That’s because Price, 43, works for the inspector general’s office of the Small Business Administration, a federal agency that is best known as the guarantor of low-interest loans to small-business owners. Her assignment is to catch white-collar crooks who try to cheat the SBA out of loan money. The job may lack the intrigue associated with the CIA or FBI, but these days Price might be the busiest agent the government has.

Price is stationed in the SBA’s Glendale office, where she is one of just two permanent agents responsible for policing loan fraud throughout four western states and Guam. That task alone stretches the tiny office to its limits. But the agents must also police the SBA’s disaster-loan program, and Price’s territory includes Southern California, home to five disasters in the past three years.

First came the floods, followed by the L.A. riots in 1992, then the fires of 1993, then last January’s Northridge earthquake. When disaster strikes, the Federal Emergency Management Agency is usually the first to arrive, doling out grants of up to $10,000 to victims who need shelter. But the SBA finances the rebuilding effort by making low-interest loans of up to $200,000 to owners of damaged homes, and of up to $1.5 million to owners of damaged businesses.

Most of the money goes to home and business owners who truly need it. But the lure of bargain-basement 3.625% interest rates also attracts applicants who don’t deserve the money and who often don’t intend to pay it back.

“Our job is to protect the government’s assets, as meager as they are,” said Price, who keeps a photo of Eliot Ness tacked to the wall of her office. “We’re not a giveaway program, although in many cases it turns out that way.”

The agency figures that about 1% of all SBA loans are obtained fraudulently. Given that the SBA has approved more than 115,000 Northridge quake loans worth a total of $3.7 billion, that means at least 1,100 of them probably went to cheaters.

Through December, only two quake-loan fraud suspects had been convicted, including a Calabasas gas station owner. But Nathan Hochman, the assistant U.S. attorney in Los Angeles in charge of quake fraud prosecutions, said his office is pursuing about 20 quake-related loan cases, with perhaps hundreds more on the way.

About 70% of the investigations that Price and her fellow agents work on are prompted by tips from loan officials who screen applications. But they also respond to anonymous tips from the public. Since the earthquake, the flow of potential cases into the Glendale office has nearly doubled to 20 a month. Last month, agents were actively investigating 38 cases related to disaster loans, including 23 quake-loan cases that involved about 200 applicants.

“Are there another 800 (fraudulent quake applications) out there? Probably,” said Debbie Jones, supervisor of the Glendale team. “What we’re seeing now are the ones being caught (by loan officers) in the stream. There are a whole bunch more they won’t catch until they are in default.”

Some cheaters submit phony repair invoices or inflated tax returns to try to qualify for loans they don’t deserve. Others use loan money to buy a car instead of making repairs. Then there are so-called loan packagers, specialists at putting together fake applications. They often charge applicants as much as 30% of their loan proceeds for the service.

Because it is swamped with cases, the inspector general’s office has farmed out some cases to the FBI and the Secret Service, and it has hired two temporary agents. Now the Glendale office has two full-time agents, two temporary agents and a supervisor. But even with the extra help, agents are scrambling to keep up.

Price is the veteran agent of the crew, having joined the SBA in 1991. Because she often works undercover, she refused to have her face photographed for this article. Her workday begins at 6 a.m., she said, and ends “when I can’t hold my eyes open any longer.”

She pores over case files, calls SBA loan officers to go over applications, sets up surveillance operations and travels around Los Angeles County to interview suspects and their friends, enemies and business associates. Every week or so, Price visits the U.S. attorney’s office in Los Angeles to present her cases to the officials who will prosecute them.

Sometimes the job is dangerous. In October, 1993, after helping convict an SBA official for taking bribes, Price was beaten into semiconsciousness outside her home by an assailant who was never caught, she said. As a result, she varies her drive home each night and, like most agents, carries a gun.

Price said she makes a little over $60,000 a year, but she says the real motivation is the work itself. Every case “is like a jigsaw puzzle without the picture on the cover,” she said. “The fascination for me is finding out what the picture looks like.”

Lately, Price has been working weekends to assemble the biggest puzzle of her life. Last March, the SBA fielded an anonymous tip from an informant who said he was at a party when he overheard a businessman bragging about filing a fraudulent SBA application for a $1.5-million quake disaster loan.

The suspect’s name was Siamak Kohanoff, part owner of a string of gas stations in the San Fernando Valley, the SBA said. During her investigation, Price said, she learned that Kohanoff had first applied for a disaster loan following the Malibu fires, saying he needed financial help because fire damage in the area was diverting traffic away from his Calabasas gas station. He was approved for a $600,000 loan, Price said, but before he got the money, the Northridge quake struck, badly damaging his station in San Fernando.

Now Kohanoff was in a bind, Price said, because to get his first loan he had contended that the Calabasas station was his only station and sole source of income. If he now tried to get a quake loan for his San Fernando station, the SBA would surely check his first application and discover his ruse.

To get around the problem, Kohanoff claimed that the unharmed Calabasas station suffered quake damage, Price said. In his application, Kohanoff even sent the SBA pictures of a crumpled station--shots he claimed were taken in Calabasas but were actually taken in San Fernando, Price said.

Kohanoff was charged with one felony count of willfully making false statements to the government and in August pleaded guilty, the U.S. attorney’s office in Los Angeles said. He is awaiting sentencing in U. S. District Court in Los Angeles.

But the case is far from over. The investigation of Kohanoff, along with other tips from the SBA’s loan-processing office, led to a group of loan packagers who had assembled Kohanoff’s application. A search for other applications handled by the same packagers yielded dozens of new suspects, and by December the investigation had mushroomed to include more than 100 suspects and more than $10 million in loan proceeds.

Six suspects have already agreed to plead guilty, and 43 others were in plea negotiations last month, Price said. One of the packagers fled the country as investigators closed in. Other arrests are being made periodically, but it could be years before the case is closed, Price said.