VIRGINIA BEACH, Va. - Federal prosecutors allege that a woman and man from Virginia Beach were operating a scheme to defraud customers for several years and then recently applied for unemployment benefits. Federal authorities stepped in and made arrests.
They said it went on from August 2012 until February 2018 and that Ronald Smith and Terri Miller owned the Business Development Specialist Group (BDG).
Officials said it was an Internet-based business with offices in Virginia Beach. The two would get paid to help people prepare loan packages like applications, financial statements and business plans from the Small Business Administration (SBA), according to records.
Federal authorities allege that they falsely claimed to be a large, multi-state company, headquartered at the Trump Building in New York City with additional offices in Las Vegas, Nevada and that they were affiliated with the SBA.
They allegedly said they had relationships with banks across the nation that allowed them to facilitate the loan approval process with SBA lenders in a customer's area by utilizing a "Lender Linker" made up of the most preferred SBA lenders in the country.
Documents state that BDG had a program that included a "Powerful Online Grant Writer Interface Service" that was directly connected to the federal government and "handled everything from A to Z in Finding, Writing, Submitting and Securing Grants” and they offered a money back guarantee.
They also claimed to have won the 2016 Best of Manhattan Business Award for Business Development Software and Services.
Documents state, “As a result of the aforesaid scheme and artifice, the defendants solicited numerous customers for BDG and received fees from each of them ranging from approximately $249.00 to $996.00, often paid in installments. Most of the customers did not receive the SBA guaranteed loans as anticipated.”
Documents go on to say Miller and Smith had several fraudulent methods to deny refunds to customers of BDG. “Some customers seeking refunds were simply ignored for months at a time and many simply gave up. Other customers seeking refunds were threatened with legal action,” documents state.
Federal prosecutors said they even went as far as to send a Cease and Desist e-mail from Adolph P. Krenzler, Senior Investigator, Criminal Investigations Department with the company saying the compliant had violated federal law, but there was no Krenzler or Criminal Investigations Department inside the company and no violation of federal law.
There were nine different unidentified victims listed in the indictment that allegedly lost thousands of dollars.
In April of this year federal authorities allege that Miller and Smith both filed for unemployment benefits separately with the Virginia Employment Commission which included an additional $600.00 per week in federal pandemic unemployment compensation authorized under the Coronavirus Aid, Relief and Economic Security Act ("CARES").
Documents state as a result of their false statements, they each received approximately $9,600.00 in federal pandemic unemployment compensation to which they were not entitled.
Smith was arrested, accused of nine counts of wire fraud, three counts of Engaging in Monetary Transactions in Criminally Derived Property, and one count of Fraud in Connection with Emergency Benefits.
Miller was accused of nine counts of wire fraud, three counts of Engaging in Monetary Transactions in Criminally Derived Property, and one count of Fraud in Connection with Emergency Benefits.
Smith is being held in the Western Tidewater Regional Jail and has court on Tuesday at 3:30 p.m.
Miller is out on bond and has an arraignment on August 27 at 2:30 p.m.