A San Diego man's admission of guilt came sharply on the heels of charges for bank and tax fraud that he orchestrated for almost six years. Alvin Pates, in federal court, acknowledged his role in deceiving banks by using straw borrowers and fraudulent financial data to secure loans.
Pates started this scheme in July 2014 and continued to exploit straw borrowers quickly through April 2020. To secure loans and credit lines, Pates used names, social security numbers, and the credit information of others for loans that mostly benefited him. The loan applications he filled out with bogus income and employment information were said to be bolstered by fake paystubs, W2s, and bank statements that were knowingly provided by Pates, according to the U.S. Attorney's Office for the Southern District of California.
In a move to secure the straw borrowers' cooperation, Pates paid them 10 percent of the loan proceeds, making empty promises to handle all future loan payments. Furthermore, his plea agreement revealed one instance where Pates called a financial institution, impersonating a straw borrower, to fulfill security queries and secure loan approval.
Pates openly admitted to channeling the illicit gains through his own shell company's bank accounts, using the majority of the funds to cover personal expenses and pay off other creditors. The fraudulent loans, according to the indictment, amounted to $87,000, with Pates agreeing to pay at least $40,500 in restitution.
His disregard for legality didn't end with bank fraud. Pates also pleaded guilty to aiding and assisting in the preparation of false tax returns in 2015. In one such instance, he submitted a tax return that falsely reported "Other Income," leading to a substantial IRS refund, which was later flagged and reclaimed by the agency.
With his day of reckoning set for March 1, 2024, before U.S. District Judge Cathy Ann Bencivengo, Pates faces a potentially long prison sentence, heavy fines, forfeiture, and restitution for his crimes. Assistant U.S. Attorneys Melanie K. Pierson and Loren G. Rene are the prosecutors handling this case, which highlights the wrenching effects of greed and deception within the financial system.
