A Laguna Niguel businessman who took a bank, the Small Business Administration and the financier of a Fountain Valley gas station for millions and millions of dollars recently copped to multiple fraud counts in federal court and now faces up to 70 years in prison.
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Fountain Valley Gas Station Owners Indicted For Small Business Administration Loan Scam
Donald Keith Goff, 66, pleaded guilty to federal mail fraud, wire fraud and bank fraud and admitted that he and his defense attorney conducted another scam after Goff had already been indicted by a federal grand jury.
Goff was unable to obtain a loan to finance the purchase of the gas station because he had poor credit, was being sued by creditors and had failed to pay judgments. So he orchestrated a scheme in 2006 and 2007 to defraud Grand Pacific Financing Corp. (GPFC), which provided a $4.5 million loan.
First, Goff created a shell corporation and recruited an unemployed truck driver to act as a “straw buyer” who posed as the owner and loan applicant. Goff and a co-conspirator bribed an escrow agent to falsely advise the bank that a $600,000 equity down payment had been used for the purchase, when in fact no down payment was made.
Later in 2007, after obtaining the GPFC loan and the gas station business, Goff orchestrated a scheme to defraud Nara Bank by forming another shell corporation, installing his wife as owner and having her “buy” the gas station. Nara Bank was provided false information regarding his wife's credit history and a $600,000 deposit supposedly put down on the purchase.
When the deal closed, more than one-third of the $1.4 million in loan proceeds were transferred to a bank account the Goffs controlled. They used the proceeds from the loan and business for personal expenses and luxury items. The shell companies defaulted on both loans, resulting in millions in loses for the banks. The Small Business Administration (SBA), which partially guaranteed the Nara Bank loan, lost nearly $1 million.
Goff and his family members were indicted in May 2012, but they and their defense attorney Gino Pietro would form yet another shell corporation to defraud Hana Small Business Lending, Inc. Goff's former attorney Gregory Sullivan posed as the owner of a shell company that applied for $4.5 million in loans to finance the purchase of gas station businesses in Anza and Imperial. If you're this far into the post, you've already read what happened next: an escrow agent was bribed, phony documents were filed and a company and the SBA suffered $3 million in losses. All three scams cost the SBA $5 million.
Goff is scheduled to be sentenced Nov. 17. His wife, stepdaughter, attorney and former attorney have all pleaded guilty and/or signed plea agreements with the feds.
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OC Weekly Editor-in-Chief Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the alternative newsweekly’s first calendar editor.