Others charged in related cases: Amalia Martinez,
Conspiracy to misapply bank funds, SBA borrower Annand Sluman pled guilty and
admitted paying cash bribes, Laura Ortuondo, assisted in creating the
fraudulent loan documents.
Posted By CotoBlogzz
SAN DIEGO – Jocelyn J. Brown, a loan broker for the
now-defunct La Jolla Bank, pleaded guilty Thursday May 5, 2016, to making false statements in relation to an
investigation into bribes paid to the bank’s Vice President and Small Business
Administration (“SBA”) lending department manager Amalia Martinez according to announcement
by Department of Justice U.S. Attorney’s Office Southern District of California
As part of
her guilty plea, Brown admitted that she paid cash bribes in return for the
banker’s assurance that the loans Brown referred would be approved and funded,
and, therefore, that Brown’s commissions would be paid. Brown collected
tens of thousands of dollars in referral fees from La Jolla Bank, and kicked
back a portion to the bank manager, in cash, every time she was paid.
La Jolla
Bank was a bank and financial services company that provided consumer,
business, and construction loans. It opened its SBA lending department in
2005. In February 2010, the bank failed, and was taken over by the
FDIC. At the time of its failure, the bank had outstanding debt of over
$1 billion, which the FDIC absorbed—and ultimately passed on to the American
taxpayers.
According to
the plea agreement, Brown worked as an unofficial broker for La Jolla Bank,
referring business loan customers to the bank’s SBA department. As part
of this job, Brown helped her borrowers compile their loan application packages
and submit them to the bank. In return for generating business, La Jolla
Bank paid Brown a commission or referral fee, calculated as a percentage of
each loan she referred.
Brown
admitted that in 2006, Martinez asked her to kick back a portion of her
commissions, in cash, after her clients’ loans were funded. In turn,
Martinez would make sure that Brown’s clients’ loans were approved so that
Brown could collect commission payments, regardless of the soundness of the
loans and their benefit to the bank. In addition, Martinez arranged to
pay Brown a fraudulent $30,000 “commission” for a loan she in fact had no part
in brokering. Brown went so far as to generate a fake invoice, pretending
that she had earned the commission.
Brown admitted
that she lied to law enforcement agents by concealing these bribe payments and
hiding her relationship with Martinez. During the investigation, she told
federal agents, falsely, that she never saw Martinez accept money in exchange
for loans. And despite the fact that she and Martinez traded several
phone calls and text messages and had a sit-down meeting in June 2014, Brown
falsely reported to federal agents in September 2014 that she had not spoken to
or seen Martinez since before she learned about the federal
investigation. In her plea agreement, Brown acknowledged that her false
statements significantly impeded the investigation of Martinez.
Since then,
however, Martinez has pleaded guilty to accepting bribes, and admitted that she
and other senior La Jolla Bank executives accepted hundreds of thousands of
dollars in cash bribes and kickbacks from borrowers in return for issuing
hundreds of millions of dollars in loans. The bank management issued the
loans knowing that the borrowers were unqualified and unlikely to repay, and
their mismanagement contributed to the bank’s billion-dollar collapse.
Martinez admitted that she participated in a conspiracy with the bank’s senior
executives to line their own pockets with bribe money.
Two other
defendants have been charged in related cases. SBA borrower Annand Sluman
pled guilty and admitted paying cash bribes to Martinez in return for several
SBA loans he was issued between 2006 and 2008. By 2008, Sliuman was not
financially qualified to borrow money, so he submitted fraudulent documents as
part of his loan application that made his businesses appear to be financially
sound. Sliuman’s assistant, Laura Ortuondo, assisted in creating the fraudulent
loan documents. She pled guilty to making false statements to
investigators about her involvement in the case; as part of her plea, she also
admitted that she destroyed evidence and instructed her then-husband to testify
falsely on her behalf to help cover up the crime.
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