Opinion ID: 66524
Heading Depth: 2
Heading Rank: 1

Heading: Kyle and Steven

Text: The district court found that all of Bank of Milan’s loss was fraud loss because Kyle and Steven fraudulently misrepresented the purpose for which the loan was obtained, and concealed their debt to Colony Bank at the time of the SBA loan, but the court did not identify the specific fraudulent misrepresentations to which it was referring or the facts that it found that Kyle and Steven concealed. Based on the Government’s arguments during the sentencing hearing, it appears that Kyle and Steven are correct in assuming, with regard to the fraudulent misrepresentations, that the court must have found that they did not intend to 6 concentrate on increasing Eagle Carpet Mills’ sales, as they indicated in the SBA loan application. It also appears that Kyle and Steven are correct that they did not shut down Eagle Carpet Mills as soon as the company received the SBA loan, as it had gross receipts of $1,302,910 and $456,785 in 2001 and 2002, respectively. Additionally, Kyle and Steven are correct that their repayment history indicates that, at the time they received the loan, they intended to repay it, as they made all but two of the monthly payments on time for the first two-and-a-half years after the loan. Contrary to Kyle’s and Steven’s assertions, however, other evidence in the record supports the court’s finding they made a material misrepresentation in the SBA loan application when they stated they would use the loan to concentrate on increasing Eagle Carpet Mills’ sales. Specifically, the spreadsheet listing Express Carpet Sales loans from Colony Bank shows that, in the 9 months after the SBA loan closed, the company received 12 different loans, totaling $504,958.99, which implies that Kyle and Steven were concentrating on increasing the business of Express Carpet Sales immediately after receiving the SBA loan. Therefore, the Government presented evidence from which the district court could have found, by a preponderance of the evidence, that Kyle and Steven did not intended to focus on increasing the sales of Eagle Carpet Mills, as stated in the SBA loan application, 7 but were focused on increasing business at Express Carpet Sales, and thus, the court did not clearly err in finding that all of Bank of Milan’s loss was attributed to material misrepresentations. Robertson, 493 F.3d at 1330; Gupta, 463 F.3d at 1200;; Hernandez, 160 F.3d at 666-67. Because the evidence supports the district court’s finding based on the fact that Kyle and Steven made a material misstatement in the SBA loan application, this Court does not need to address Kyle’s and Steven’s additional argument that they did not conceal their Colony Bank debt from Bank of Milan.