Connecticut residents charged with defrauding small business loan programs

NEW HAVEN, CT (WFSB) - Connecticut residents were charged with defrauding small business loan programs.

A 20-count indictment charged 42-year-old Mycall Obas of Danbury, 35-year-old Mbali Ncube of Danbury, Pierre Obas, 49, of Danbury, Teresa Vargas, 43, of Hartford, and 30-year-old Stephen Walker of New Canaan.

According to the FBI and David X. Sullivan, U.S. attorney for the District of Connecticut, all five suspects were charged with offenses related to fraudulent small business loan applications in Connecticut and Washington.

The indictment was returned on May 14. All five suspects were arrested after that and entered not guilty pleas.

They were released on bonds as they await trials.

According to the indictment, the National Development Council, now known as Grow America, was a not-for-profit lender that provided capital to small businesses, including through state-sponsored small business loan programs. The Connecticut Small Business Boost Fund, called CT Boost, was an economic initiative supported by the Connecticut Department of Economic and Community Development that connects Connecticut small businesses and non-profits with support services, including access to flexible funding for capital expenditures. The Small Business Flex Fund was an economic initiative supported by the Washington State Department of Commerce that connected Washington state small businesses and nonprofits with support services, including access to flexible funding for capital expenditures. NDC worked with CT Boost and Flex to provide loan funding to small businesses in Connecticut and Washington, respectively.

“As alleged in the indictment and statements made in court, Mycall Obas, Ncube, Pierre Obas, and Walker used stolen personal and business identities, or created false business identities, to apply to NDC for small business loans through the CT Boost and Flex programs,” Sullivan said. “In connection with the loan applications, they created and submitted false business records, including fraudulent certificates of organization, false income statements, false balance sheets, and false tax returns.”

Sullivan said that Vargas, who was a contractor for NDC and responsible for processing and underwriting small business loan applications, processed some of the fraudulent loan applications and submitted them to NDC for approval. She also specifically requested to be the loan processor on certain loan applications submitted by the other suspects in order to further the scheme.

“It is alleged that the co-conspirators applied for and obtained 12 loans totaling more than $2 million through this scheme,” Sullivan said.

The indictment charged each of the five suspects with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, and multiple counts of wire fraud.

Each of the charges carried a maximum prison term of 20 years, Sullivan said.

The indictment also charged each of them with one more count of making illegal monetary transactions.

Mycall Obas and Pierre Obas were also charged with aggravated identity theft.