Orange County Residents Indicted in New Scheme to Defraud Banks and the Small Business Association in Obtaining Loans to Purchase Gas Stations
Defendants Already Facing Charges Allegedly Concealed Identities to Continue Fraudulent Activity
|FBI Los Angeles October 30, 2013|
SANTA ANA—Three residents of Orange County, two of whom are already facing federal charges, were arrested after being charged with a bank fraud scheme in a superseding indictment returned by a federal grand jury in the Southern District of California (San Diego).
Donald Keith Goff, 56, of Laguna Niguel; Monty Brown, 46, of Laguna Niguel; and Greg Sullivan, 56, of Irvine, were arrested this morning by FBI agents without incident.
The indictment, returned under seal on October 23, 2013, and unsealed this morning, charges Goff and Brown with two counts each of fraud by wire, a violation of Title 18, U.S. Code, § 1343; and one count each of committing an offense while on pre-trial release, a violation of Title 18, U.S. Code, § 3147. Sullivan was indicted on two counts of violation of fraud by wire and one count of false statements to law enforcement, a violation of Title 18, U.S. Code, § 1001.
In May 2012, Goff, Brown, Melanie Goff (Donald Goff’s wife), and Leon Draper were originally charged in a federal grand jury indictment. The original indictment charged that the defendants conspired to defraud two banks and the United States Small Business Administration (SBA) by providing false information to persuade the banks to loan them a total of approximately $5 million to purchase and refinance a gas station business in Fountain Valley, California. The original indictment alleged that the defendants used a “straw buyer” to pose as the owner of one of the companies involved in the transactions and concealed the defendants’ control of that company. The indictment also alleged that the defendants falsely informed the banks that they had used their own funds to make a down payment on the purchase and created fraudulent records to corroborate that claim. The SBA provided a guarantee for one of the bank loans. The defendants charged in the May 2012 indictment are scheduled for trial in April 2014; all four defendants in that case have been free on bail since June 2012.
The recent superseding indictment charges that, while the original case was pending trial and the original defendants were released on bail, Goff, Brown, Sullivan, and others engaged in a new, similar scheme to defraud another bank, Hana Financial, as well as the SBA. According to the superseding indictment, Goff and Brown paid Sullivan $100,000 to act as a “straw buyer,” posing as the owner of a business, Rock Petroleum, and to apply for a $4.5 million loan from Hana Financial. The indictment alleges that this would enable Rock Petroleum to buy two gas stations in the Southern California area, while concealing the involvement of Goff and Brown (who had already been indicted for bank fraud). The superseding indictment further alleges that the defendants and others used false documents to mislead Hana Financial into believing that Sullivan had made a $2.1 million down payment on the purchase. In addition, the superseding indictment alleges that, after the loan closed, Goff obtained ownership of Rock Petroleum and he and Brown took over the operations of the gas stations, skimming large portions of cash from the businesses for personal expenses while neglecting to make payments to Hana Financial and to the gas stations’ vendors. The SBA acted as a guarantor for Hana Financial’s loan to Mr. Sullivan. Among the personal expenses the defendants paid with money from the new businesses were payments of fees to criminal defense lawyers representing them in the existing fraud case.
The defendants arrested today will be arraigned on the superseding indictment this afternoon in United States District Court in Santa Ana, California.
The investigation in this case is being conducted by the FBI and the U.S. Small Business Administration-Office of Inspector General. The defendants will be prosecuted by the United States Attorney’s Office in the Southern District of California (San Diego).
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.