California Man Who Refinanced Hotel Property Convicted Of Wire Fraud and Misstatements to a Bank in Federal Jury Trial

In the legal community, many of us expected white collar prosecutions for bank financing and mortgage fraud, including cases against lenders to be on the rise. There have not been as many cases as expected. The cases still seem to be against individuals who gave false information to get a loan. While some call these "liar's loans" - most frequently they are not prosecuted unless the borrower was not able to make the loan payments. A recent case involving hotel refinancing and construction loans show what kind of bank misstatement and loan fraud cases go criminal. In the cases we have worked on, the banks put together a large package of material to make it easy for the prosecutors to work up the case.

On November 9, 2016, after a 12 day trial, a federal jury convicted Sanjiv Kakkar of wire fraud and making misstatements to a bank. The government presented evidence at trial that Mr. Kakkar presented false information to a bank in connection with refinancing a hotel property he owned in Boulder Creek, Calif. There were three basic categories of misstatements or fraud: (1) falsifying income information and tax returns where income was overstated; (2) failure to provide updated financial and tax records; and (3) submitting false information to an escrow company to get reimbursement for construction costs.  

Former Napa Winemaker Charged in California Federal Court With Mail and Wire Fraud in Mislabeling Wine

Mislabeling of food items has not been a high priority in past years. However, the issues that have happened in China with olive oil and in the U.S. with “organic” food and the money that the mislabelers make while they deceive consumers is no longer going unnoticed. If your company makes a product or food item that is not properly labeled, understanding the risks is important. 

Federal regulations govern, and some companies do not realize that there is civil and criminal exposure if they are violated. A recently filed case may help companies realize the high risks and why compliance is important. It also shows how hiding facts, creating false records or deceptive acts may turn a civil lawsuit into a criminal case.

On November 2, 2016, former winemaker Jeffry Hill was indicted in San Francisco for mail fraud and wire fraud in connection with his operation of a Napa Valley-based wine company Hill Wine Company (“HWC”). These are allegations and not evidence but for companies and individuals just being charged is something to be avoided.