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• Pending Government Action:

  Government Action: BBB reports on known government actions involving business’ marketplace conduct:

  USA v. Smerling 1:21-cr-00317
  

  As of February 8, 2022:

  
  

  The United States Attorney for the Southern District
  of New York, announced that ELLIOT SMERLING pled guilty to a bank
  fraud scheme that caused the issuance of approximately $140 million in
  collateralized loans on the basis of forged documents, including
  subscription agreements from purported limited partners, audit letters
  attesting to his private equity firm’s finances, and falsified bank
  account statements.  SMERLING also pled guilty to securities fraud in
  connection with his solicitation of investments in his private equity
  funds through materially false and misleading statements.

  
  

  According to the allegations contained in the Superseding
  Information, court filings, and statements made during the plea
  proceeding:
  
  From at least in or about January 2019 through at least in or about
  March 2021, ELLIOT SMERLING, the defendant, solicited and obtained loans
  totaling approximately $140 million on behalf of his private equity
  funds, which were secured by purported capital commitments made by
  limited partners in the funds.  SMERLING obtained the loans on the basis
  of falsified documents and material misrepresentations, including:  (1)
  a forged audit letter, purportedly prepared by an international network
  of accounting, audit, tax, and professional services firms, attesting
  to audited financial statements; (2) forged subscription agreements that
  falsely represented, among other things, that the investment fund of a
  private university based in New York, New York, and the chief investment
  officer of that fund had committed $45 million, and that the investment
  management division of a banking and financial services firm
  headquartered in New York, New York, and the chief executive officer of
  that firm had committed $40 million; and (3) falsified bank records
  purporting to attest to wire transfers from purported limited partners
  to Smerling’s funds.  

  
  

  In connection with his bank fraud scheme, from at least in or about
  January 2013 through at least in or about March 2021, SMERLING also
  solicited investments in his private equity funds through materially
  false and misleading statements concerning the funds’ audited financial
  statements, limited partners, capital commitments, and holdings.
  
  
  
  SMERLING, 52, of Lake Worth, Florida, pled guilty to one count of
  bank fraud, which carries a maximum penalty of thirty years in prison,
  and one count of securities fraud, which carries a maximum penalty of
  twenty years in prison.  The statutory maximum sentences are prescribed
  by Congress and are provided here for informational purposes only, as
  SMERLING’s sentence will be determined by the judge.  SMERLING’s
  sentencing is scheduled for May 13, 2022 at 12:00 p.m. before Judge
  Cote.

  
  

  LINK: https://www.justice.gov/usao-sdny/pr/ceo-private-equity-fund-pleads-guilty-scheme-defraud-banks-140-million

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