California Man Sentenced Over Six Years in Prison for SBA Loan Fraud

A California man, Frank Hamilton, 55, of Simi Valley, has been sentenced to 66 months in prison, followed by two years of supervised release, and ordered to pay $6,093,024.90 in restitution for his role in a multi-million dollar loan fraud conspiracy targeting the Small Business Administration (SBA) and other lenders, the Department of Justice announced on Wednesday, March 13, 2026.

Details of the Fraud

Hamilton previously pleaded guilty to one count of wire fraud conspiracy affecting a financial institution. The scheme involved filing fraudulent applications for SBA 7(a) loans – loans funded by banks and other lenders with partial guarantees from the SBA – before the pandemic. As the pandemic unfolded, the conspirators shifted their focus to Economic Injury Disaster Loans (EIDLs), directly funded by the SBA, and Paycheck Protection Program (PPP) loans, fully guaranteed by the SBA.

Hamilton assisted his co-conspirators by advising them on submitting false loan applications and creating fabricated documents, including fake tax returns. He also helped them acquire “shelf companies” – pre-existing businesses created and sold for the purpose of appearing established – and set up bank accounts, websites, and email addresses for these entities. In some instances, Hamilton even participated in phone interviews with lenders on behalf of his co-conspirators.

To further conceal the fraud, Hamilton strategically used the names of conspirators and their shell companies in loan applications and supporting documentation, creating a false impression of legitimacy. He also applied for fraudulent loans using his own minimally-functioning companies and three shelf companies he owned.

Financial Impact and Scheme Operation

The conspirators collectively applied for approximately $9 million in loans, with roughly $7,088,010 being funded. A significant portion of the loan proceeds was directed to Hamilton, who invested the funds and distributed them back to his co-conspirators in installments, covering loan payments and providing a small amount for personal use.

Even as some conspirators initially made loan payments, many defaulted. Hamilton retained the majority of the funds, failing to make any payments on his own loans, resulting in over $7 million in losses to the SBA.

Investigation and Prosecution

The case was investigated by the Small Business Administration Office of Inspector General, the FBI, the Internal Revenue Service Criminal Investigation, Homeland Security Investigations, and Immigration and Customs Enforcement. Assistant United States Attorney Judy Smith and Department of Justice Trial Attorney Varun Trivedi prosecuted the case.

Recent EDPA Focus on White-Collar Crime

This sentencing comes as the U.S. Attorney’s Office for the Eastern District of Pennsylvania (EDPA) has increased its focus on white-collar crime. U.S. Attorney David Metcalf announced the implementation of a White-Collar Justice Program in September 2025, emphasizing investigations and prosecutions related to healthcare fraud, securities fraud, public corruption, and other financial crimes. Metcalf has also highlighted the Voluntary Self-Disclosure (VSD) Program, offering incentives for companies to report illegal activity.

In a related case, a former president of an Allentown title company was sentenced to 54 months in prison in November 2025 for defrauding the SBA, also prosecuted by U.S. Attorney David Metcalf.