NORFOLK, Va. - A Virginia Beach man pleaded guilty today to wire fraud and fraudulently collecting federal unemployment benefits.
Officials say 59-year-old Ronald A. Smith pleaded guilty to an internet-based scam that cheated approximately 1,700 victims out of $1,287,000. He also pleaded guilty to a separate charge of fraudulently collecting unemployment benefits during the coronavirus pandemic.
According to court documents, Smith and his wife and co-defendant Terri Beth Miller, 53, set up a company called Business Development Group. The company was an internet-based business that offered, in exchange for an advance fee, to assist individuals in preparing loan applications to obtain SBA-guaranteed loans.
Court documents say 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 offered a money-back guarantee, but in fact employed various fraudulent methods to deny refunds.
Officials say Smith and Miller solicited approximately 1,700 customers, who paid about $1,287,000 in advance fees. The vast majority of these customers did not receive an SBA guaranteed loan. In fact, Smith did virtually nothing to even attempt to obtain loans for their customers.
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.
Smith was convicted for nearly the identical scam back in 2006 and received a seven year sentence.
In addition, Smith pleaded guilty for submitting a false application to the Virginia Employment Commission for unemployment benefits, including an additional $600 per week in federal pandemic unemployment compensation authorized under the CARES Act. Officials say Smith received $9,600 in federal pandemic unemployment compensation to which he was not entitled.
Smith pleaded guilty to wire fraud, engaging in monetary transactions in criminally derived property, and fraud in connection with emergency benefits.
He faces a maximum penalty of 60 years in prison when sentenced on April 2, 2021.