Rockstar Defrauds Banks with False Personal Loan Applications

One rockstar will soon be singing the blues. Robert Brandon Mawhinney, the frontman of the rock band Lights Over Paris, has been charged with committing personal loan fraud. In any situation where information contains material misrepresentations to a financial institution (information that could affect the underwriter’s decision), this is a risk. People do it to get loans, to get the lowest rates, and for various other reasons.

This could include submitting false pay information or assets for credit approval. It could also include things like using a straw buyer (someone who applies for the loan for you when they are not actually the borrower). This is increasingly common among investors who want to hide their business.

According to an FBI press release, the 30 year-old musician who goes by the stage-name Robb “TaLLLLL” University, is alleged to have defrauded several banks out of millions of dollars.  

According to a loan.org interview with Thom Mrozek, Public Affairs Officer for the US Attorney’s Office in the Central District of California, it is unknown if the band’s business managers and record label were aware of the fraud.

In the course of the criminal activity, Mawhinney falsely told banks that he had $8 million in assets, which acted as collateral for borrowing personal loans. He is also accused of funneling several hundred thousand dollars offshore to Cyprus.

Mawhinney fabricated brokerage statements which claimed he had millions in assets when in truth he had less than $10,000. His criminal fraud activity began in August 2009 and lasted until April 2011.

According to Mrozek, Mawhinney borrowed $500,000 from Zions Bank and $1 million from Bank of America. He also borrowed $6.25 million from Comerica Bank.

When Was The Fraud Discovered?

Starting in July 2011, Mawhinney began defaulting on each of his four loans. Had Mawhinney not defaulted on monthly payments, the banks might not have started any kind of investigation. It was this problem that triggered the current charges.

“After the defaults, the banks began to investigate. They subsequently filed lawsuits against Mawhinney,” said Mrozek.

The subsequent IRS and FBI investigation lasted for about 18 months. During this period, investigators looked at things like his assets, credit card debt, and other financial documentation. A large part of the investigation focused on Mawhinney’s applications with these specific lenders.

The investigation found that Mawhinney lied to bank officers when he claimed that he needed the personal loans to buy musical equipment. Once he had the money in hand, he actually used it to pay for traveling, personal entertainment and a luxury tour bus.

If Mawhinney is convicted, he could face up to 30 years in a federal prison for making false statements on a loan application. This is based on the loan amounts, frequency, and the severity of the fraud.

However, he was not alone in the criminal operations. Matt and Jason Salazar, two sibling recording studio co-owners also provided false documents to several banks in a conspiracy with Mawhinney.

“The Salazars are pleading to conspiring to engage in loan fraud,” said Mrozek.

Mawhinney falsely claimed that he was the owner of the Salazars’ studio when meeting with a Comerica loan officer.

Mawhinney’s arraignment is set for Feb. 11.

Who Is At Risk of Charges Like This?

All members of the loan process can be charged with fraud for different actions. For example, banks and other lenders are expected to follow certain guidelines in a variety of loan offerings. They have to disclose the terms and any loan origination fee or other charges when issuing personal loan offers. Loan officers are also required to follow certain protocol when going through an in-person, phone, or online application process.

While there are many different opportunities for lenders and loan officers to commit fraud, the likelihood of different parties doing it is about the same. The best thing to do when submitting a loan application is to be honest about your credit score, credit card debt, assets, income, and more. 

While most people would not make such extreme changes to their asset statements, even small changes can lead to the same kind of charges. The best option is honest applications with an experienced and reputable loan officer. They’re verifying your information to make sure you can afford any application fees, monthly payments, and more.