Burlingame Business Owner Pleads Guilty to $1.96 Million Loan Fraud

SAN FRANCISCO—Nimer Anton Massis, of Burlingame, California, pleaded guilty in federal court in San Francisco yesterday to making false statements to three federally insured lenders and the federal Small Business Administration (SBA) to obtain approximately $1.9 million in loans for his various businesses, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, Massis, 40, admitted to making false statements in three separate business loan packages in 2008 and 2009. Each loan package was guaranteed in some form by the SBA, which provides financial support to small businesses across the country. The loans were made by Mission National Bank, One California Bank, and Capital Access Group. On each application, Massis was required to disclose to the lender his full financial portfolio, including all preexisting debts and obligations owed to other lenders. At the time he applied for each of the three loans, Massis was in default on approximately $630,000 in debt owed to Citibank. He did not disclose the debt that he owed to Citibank on his SBA-backed loan applications and then falsely certified that his applications represented his full financial situation. Massis ultimately fell behind and into default on the SBA-backed loan packages. He owed approximately $1.8 million to the government and lenders at the time his fraud was discovered by federal investigators. As of February 2014, he still owed approximately $1 million on his fraudulently obtained loans.

Massis was indicted on October 8, 2013. The indictment charged three counts of making false statements to a federally insured bank, in violation of 18 U.S.C. § 1014, and one count of making a false statement to the United States, in violation of 18 U.S.C. § 1001. The defendant pleaded guilty to all four counts.

As part of his guilty plea, Massis admitted that he knew that these statements to the lenders and SBA were false. He also admitted that he made them for the purpose of influencing the lenders to loan him the money, and in the case of the SBA, that the false statements were material to the agency’s decision to loan him money.

Massis is scheduled for sentencing on July 23, 2014, at 2:30 p.m. before the Honorable Edward M. Chen, United States District Court Judge, in San Francisco. The maximum statutory penalty for violating 18 U.S.C. § 1014 is 30 years in prison, five years of supervised release, and a $1 million fine, plus restitution. The maximum statutory penalty for violating 18 U.S.C. § 1001 is five years in prison, three years of supervised release, and a $250,000 fine, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Robin Harris and Benjamin Kingsley are the Assistant U.S. Attorneys who are prosecuting the case, with the assistance of Denise Oki and Rawaty Yim. The prosecution is the result of an investigation by the Small Business Administration and the Federal Bureau of Investigation.