O.C. Man Indicted on 23 Federal Counts in Loan Fraud

A federal grand jury in Los Angeles on Friday indicted an Orange County man for falsifying financial information to obtain about $3 million of government-backed small business loans for his clients.

Thuy Vinh Le, also known as Tony Le, was charged on 23 counts of submitting doctored IRS tax returns to federally insured banks that provided loans guaranteed by the U.S. Small Business Administration.

Each count carries a maximum penalty of 20 years in jail and a $1-million fine, plus restitution, said Assistant U.S. Atty. Nathan Hochman, who handled the case with the SBA and the FBI.

Le, 63, was arrested earlier this month in Hawaii, where he moved in 1990 from Laguna Niguel when federal investigators began an investigation into a rash of SBA loans that soured in Southern California.

SBA officials said that in the late 1980s, Le worked as a loan broker preparing the paperwork for at least 32 SBA loans totaling more than $6 million. Most of these loans were for unsuspecting merchants in the Vietnamese community, who paid Le as much as $30,000 for his services, although officials said a few of his clients are suspected of knowingly going along with the fraud.

The SBA says that at least 20 of the loans Le obtained for his clients eventually defaulted, costing taxpayers and banks at least $3 million.

Le’s case began a much broader crackdown on fraudulent SBA loans and ultimately sparked an overhaul in SBA’s lending practices.

Le was in transit to Los Angeles from Oakland on Friday and could not be reached for comment. He is expected to be represented by a public defender in Los Angeles, where he will be arraigned next week.

Though Le allegedly made tens of thousands of dollars through kickbacks from his clients, authorities said that Le was unemployed and on welfare at the time of his arrest in Hawaii.

The indictment returned Friday cited 11 specific SBA loans that Le allegedly helped arrange with fake tax returns showing inflated incomes. Nine of these loans were made by Tustin-based Sunwest Bank, and two were with Landmark Bank in Anaheim. Both banks are still active in SBA lending.