A Virginia Beach husband and wife scammed small businesses out of $1 million, while claiming to work out of a Trump building in New York City.
Ronald A. Smith, 60, and his co-defendant and wife, Terri Beth Miller, 53, both pleaded guilty to federal charges for their roles in the scheme, according to prosecutors. Smith was sentenced to 10 years in prison, while Miller is scheduled to be sentenced this week.
The couple created an internet-based company, Business Development Group, that offered help to businesses get loans guaranteed by the Small Business Association in exchange for a fee, prosecutors said.
Between August 2012 and February 2018, the duo reached out to potential customers and made several false statements including they were headquartered at the Trump Building in New York Cit. They also said they had offices in Las Vegas, according to prosecutors.
The duo said they had a favorable relationship with banks and assisted other well-known companies land Small Business Administration Loans.
The couple offered a money-back guarantee, but used fraud to deny refunds, according to prosecutors.
Smith and Miller reportedly solicited 1,669 customers, who paid roughly $1 million in fees to get the loans, prosecutors said. Most victims never received a loan.
“This kind of fraud reaches deep into the community by striking at struggling businesses and people trying to hold onto their livelihoods. It is unconscionable that anyone would attempt to steal from the community using the SBA loan program to line their own pockets,” said Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office. “The FBI is committed to rooting out this kind of fraud. Anyone with information on SBA loan program and other COVID-19 related fraud is asked to submit a tip to the FBI at tips.fbi.gov.”
Prosecutors also said Smith committed more fraud by submitting false applications for unemployment compensation during the COVID-19 pandemic in Virginia. In total, Smith got nearly $10,000 in unauthorized unemployment payments.
It's not Smith's first run-in with the law. He was prosecuted for a similar scam in 2006 and was sentenced to seven years in prison.