4 Indianapolis-area executives sentenced for loan fraud scheme

Crime in Indianapolis

The Department of Justice seal is seen on a lectern ahead of a press conference announcing efforts against computer hacking and extortion at the Department of Justice in Washington, DC on November 28, 2018. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

INDIANAPOLIS — Four Indianapolis-area small business lending executives were sentenced in federal court for a 13-year spanning conspiracy to defraud the Small Business Administration (SBA) in connection with its program to guarantee loans made to small businesses.

All of the executives worked for Westfield-based Banc-Serv Partners LLC and were convicted following a two-week jury trial in the U.S. District Court for the Southern District of Indiana.

Kerri Agee, 46, of Carmel, Banc-Serv’s former president, founder, and owner, was sentenced to 68 months in prison.

Kelly Isley, 41, of Westfield, Banc-Serv’s former chief operating officer, was sentenced to 57 months.

Chad Griffin, 48, of Carmel, Banc-Serv’s former chief marketing officer, was sentenced to 28 months.

Matthew Smith, 53, of Brownsburg, Banc-Serv’s co-founder and a former director of Bridge Business Bancorp, a lending institution that originated loans with Banc-Serv, was sentenced to 46 months.

The United States Department of Justice (DOJ) stated one additional co-conspirator — Nicole Smith, 44, of Indianapolis — is scheduled to be sentenced on Jan. 7, 2022.

According to the DOJ, Agee, Isley, Griffin and Nicole Smith were each convicted of conspiracy to commit wire fraud affecting a financial institution. Additionally, Agee was convicted of four counts of wire fraud affecting a financial institution while Isley and Nicole Smith were convicted of two counts of wire fraud affecting a financial institution.

Matthew Smith was convicted of one count of conspiracy to commit wire fraud.

“Fraud against SBA loan programs directly harms taxpayers and undermines the public’s faith in important community programs,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Criminal Division is committed to prosecuting the offenders who exploit these programs and abuse the public trust.”

According to court documents and evidence produced at the trial, from approximately 2004 until October 2017, the defendants helped originate SBA loans through Banc-Serv on behalf of various financial institutions and lenders. On multiple occasions, they fraudulently obtained these SBA guaranteed loans knowing they would be ineligible.

“Making false statements to fraudulently gain access to SBA program funds is deplorable and it is unconscionable that anyone would steal from a program intended to help hard-working Americans keep their businesses afloat,” said Acting Special Agent in Charge Gregory Nelsen of FBI Indianapolis. “The FBI and our partners will continue to work diligently to identify and pursue those engaged in such illegal activity and ensure they are no longer in a position to defraud anyone.”

In addition to their prison sentences, all four defendants were ordered to pay restitution to the SBA. Agee and Isley were each ordered to pay $2,289,681, Griffin was ordered to pay $685,022, and Matthew Smith was ordered to pay $1,651,450.

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