Cortez Man Sentenced to Federal Prison for Making a False Statement to a Financial Institution

DENVER—Richard Shaw, age 56, of Cortez, Colorado, was sentenced last Friday, March 5, 2010, by U.S. District Court Judge John L. Kane to serve 37 months (just over three years) in prison for making a false statement to a financial institution in connection with obtaining a Small Business Association (SBA) loan. Following his prison sentence, Shaw was ordered to spend five years on supervised release, and ordered to pay restitution totaling over $975,000 to the Small Business Administration and the Bank of Durango. The defendant, who is free on bond, was ordered to voluntarily report to a Federal Bureau of Prisons facility.

Richard C. Shaw was indicted by a federal grand jury in Denver on March 24, 2009. He pled guilty before Judge Kane on November 6, 2009.  He was sentenced last Friday, March 5, 2010.

According to the stipulated facts contained in the plea agreement, on August 15, 2003, Shaw applied at the Bank of Durango in Durango, Colorado. As part of the loan process, Shaw completed paperwork that included a personal history form. That form included the question “Have you ever been charged with and/or arrested for any criminal offense other than a minor motor vehicle violation?” In response to this question, the box on the form was checked “no.” The defendant signed his name to the form, under the clause: “CAUTION: Knowingly making a false statement on this form is a violation of federal law and could result in criminal prosecution.”

Shaw signed the paperwork at the Bank of Durango to obtain the Small Business Administration (SBA) loan to obtain business operating expenses for his company, Sonrise Construction of the Four Corners, LLC. The loan was for $1.1 million. At the time Shaw signed the paperwork, he knew that he had a conviction from the State of New Mexico for embezzlement and racketeering. Thus, Shaw knowingly misrepresented his criminal history and made a false statement to the Bank of Durango, intending to influence the bank to approve his loan.

“The success of this investigation is attributed to the combined efforts of our federal partners, including the Small Business Administration (SBA) Office of the Inspector General Investigations Division,” said FBI Special Agent in Charge James Davis.

Peg Gustafson, the Inspector General at SBA, stated: “Detecting and preventing fraud in SBA loan programs is especially important in these difficult economic times.  This noteworthy sentence should serve as a notice to all SBA loan participants that persons committing loan fraud will be prosecuted to the fullest extent of the law. I commend the professionalism and exemplary work by the U.S. Attorney’s Office in the prosecution of this landmark case.”

This case was investigated by the Federal Bureau of Investigation (FBI) and the Small Business Administration (SBA) Office of the Inspector General Investigations Division.

Shaw was prosecuted by Assistant U.S. Attorneys Bob Mydans and Dondi Osborne.