Hopatcong Man Fakes Documents, Gets 18 Months

A Hopatcong man was sentenced Thursday to 18 months in jail for falsifying loan documents so applicants could obtain U.S. Small Business Administration-backed commercial loans, U.S. Attorney Paul J. Fishman said.

Nathan C. Buschman, 32, before U.S. District Judge Susan D. Wigenton to making false documents and concealing material facts from the SBA. He was arrested on Sept. 16, 2010, in a coordinated law enforcement takedown of 53 people in connection with widespread, sophisticated identity theft and fraud, the U.S. District Attorney's Office said.

In addition to the prison term, Buschman, a former branch manager of a Washington Mutual Bank in Edgewater, must serve three years of supervised release and must pay $199,059.50 in restitution.

The U.S. District Attorney's Office said the following was discovered according to documents and statements made in Newark federal court:

Buschman was a former branch manager for Washington Mutual Bank at a branch in Edgewater, N.J. Washington Mutual Bank later became JP Morgan Chase Bank. The bank issues commercial loans and lines of credit to business owners, many of which are guaranteed by the SBA. Under the SBA program, if a borrower defaults on an SBA guaranteed loan, then the bank is eligible to seek reimbursement from the SBA up to the percentage of the guarantee. The goal of the program is to reduce the risk to lenders, thereby permitting otherwise qualified small businesses to obtain financing unavailable to them on reasonable terms through normal lending channels.

To obtain an SBA guaranteed loan, the bank required applicants to truthfully complete a loan application and provide information about the business, such as the business’ name, physical address and gross receipts, and to supply certain records, such as tax returns. To verify the applicant’s information, the bank required Buschman or employees under his supervision to physically visit the business location and complete a “Business Banking Site Visit” form. Buschman was required to truthfully certify on the form that he conducted an in-person inspection of the business establishment seeking the loan.

Buschman admitted that at various times in 2007, he falsified site visit forms by signing them, though he had not conducted any inspection. For example, Buschman admitted that on June 15, 2007, an applicant applied to the bank for an SBA guaranteed commercial loan on behalf of a business with the initials “M.W.” M.W. was a sham business with no physical location. Buschman acknowledged that he falsified the form related to this loan, thereby causing the bank to issue a $100,000 SBA guaranteed loan to the sham business. The loan went intodefault, resulting in a financial loss to the bank of approximately $98,000.