Man sentenced to prison for defrauding church members
SAN DIEGO (FOX 5/KUSI) — A San Diego man who scammed people, including members from his church, in bank and tax fraud schemes was sentenced to three-and-a-half years in prison, prosecutors said.
Alvin Pates, 54, was found guilty of participating in a scheme to deceive banks by using straw borrowers and bogus financial information to obtain loans, the Office of the United States Attorney Southern District of California said in a news release Monday. He also admitted to assisting in the preparation of false tax returns for two taxpayers for the calendar year 2015.
From July 2014 through at least April 2020, Pates said he used names, social security numbers and credit of the straw borrowers to obtain loans and lines of credit that mostly benefited him, according to his plea agreement.
“Pates supported his lifestyle, which included a penthouse apartment, a Corvette, a
Mercedes, and a BMW, solely with the proceeds of his fraudulent schemes. In the midst of the scheme, Pates sent a message to one of his assistants, stating that ‘money is raining,'” his sentencing documents read.
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Many of the straw borrowers Pates recruited were from his church in which they trusted and believed was a business run by him, prosecutors said. Pates would instruct and provide straw borrowers to submit false documentation showing they earned six-figure annual incomes from shell companies operated by Pates.
“Pates provided the straw borrowers with addresses and phone numbers for the shell companies, where Pates or others acting at his direction confirmed the false employment and income information when contacted by the financial institutions. Pates himself sometimes contacted the banks, pretending to be the straw borrowers, in order to ensure the straw borrowers could pass the security questions asked by the lenders,” prosecutors said.
Pates then attended another church to continue the scheme after the original church members had been financially damaged, officials said. Straw borrowers gave Pates 90% of the fraudulent loan proceeds as what they thought was their capital contribution, which ultimately ruined the credit and finances of the straw borrowers.
Pates was also ordered to pay restitution of $45,500 to one person who repaid the fraudulent loans.
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