Saehan Bank, a unit of Saehan Bancorp, has agreed to pay $2.2 million to the United States to settle allegations that it misrepresented or withheld information to get the Small Business Administration to fund loans.
The agency's 504 loan program offers to small businesses long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. The SBA requires certifications of the borrower's financial condition and ability to repay the loan.
Saehan Bank in Los Angeles was accused of falsely certifying that borrowers' financial circumstances had not changed since their initial loan application, though it knew the borrowers were facing serious financial problems.
"The size of this settlement should send a clear message to lenders and other participants in SBA lending programs that fraud and misleading statements will not be tolerated," said Peggy Gustafson, the SBA's inspector general.