La Canada Man Pleads Guilty in SBA Loan Brokerage Scam
A La Canada man pleaded guilty Tuesday in federal court to five felony counts of bank fraud arising from a $9-million Small Business Administration loan brokerage scam.
Kenneth Seychong Park, 49, will be sentenced Nov. 18 in U.S. District Court in Los Angeles, where he faces three to six years in prison and $5 million in fines. Six SBA loan borrowers who participated in the scam pleaded guilty earlier this year and will be sentenced in October and November.
The case illustrates the federal government’s commitment to stopping abuses in the SBA guaranteed-loan program, said Assistant U.S. Atty. Nathan J. Hochman.
“The number of prosecutions in these cases in Southern California for the last three years has exceeded the rest of the nation,” Hochman said. “If you do submit false documents, you will be prosecuted.”
Park operated Kerob International in Pasadena to help mainly Korean American business owners pull together loan applications. Authorities said he used phony documents to convince banks that the businesses qualified for $9 million in SBA-backed loans. The owners later defaulted on some of the loans, costing the federal government $4 million, Hochman said.
Authorities also seized Park’s La Canada home and Westminster apartment complex under federal asset-forfeiture laws.
The case was the second large SBA scam case handled by federal authorities this month. On Aug. 12, Ty Pham, 57, of Fountain Valley, a loan broker who worked in the Vietnamese community, was sentenced to two years in federal prison after arranging about two dozen fraudulent SBA-guaranteed loans worth $4 million. Thirteen borrowers also pleaded guilty in that scheme, receiving sentences of six months to three years each and orders to pay full restitution.
From Oct. 1, 1995, to June 30, 33 people have been indicted nationwide on suspicion of fraudulent SBA loan transactions. The government recovered $1.7 million in fines and restitution and $1.25 million in civil judgments, according to SBA officials in Washington.
