Elkton doctor’s co-defendant pleads guilty in fraud case
WILMINGTON, DEL. — Two months after being indicted in a federal loan fraud case, the codefendant of an Elkton doctor pleaded guilty Monday.
Tae H. Kim, 47, of Wayne, Pa., entered a guilty plea to conspiracy to commit bank fraud and attempted bank fraud filed in the District of Delaware and the District of Maryland, respectively, according to court records. Sentencing is set for Jan. 11. Both of the fraud charges carry maximum sentences of 30 years in prison, a fine of $1 million, a term of supervised release of five years, a $100 special assessment and mandatory restitution.
“Tae Kim abused his position as a loan officer by defrauding three financial institutions and the Small Business Administration (SBA) for the benefit of a key client. He further leveraged his position to profit personally from an extensive business relationship with that client, all of which he concealed from his employers,” Acting U.S. Attorney for the District of Delaware David Weiss said in statement Monday. “I applaud the diligence of federal law enforcement in Delaware and Maryland in uncovering the breadth and scope of Kim’s criminal conduct. Our office remains committed to ensuring the integrity of the federal banking system.”
Kim admitted to aiding Dr. Zahid Aslam, of Elkton, in acquiring two loans he was not qualified for and attempting to obtain a third, which was denied by the SBA.
Aslam, 44, who owns the Alpha Medical Center in Elkton and also has practices in Delaware, New Jersey and Pennsylvania, was charged by a federal grand jury on June 15 with one count of conspiracy to commit bank fraud and two counts of making false statements on loan applications. All three charges come with a maximum prison sentence of 30 years and a fine of up to $1 million. He was arrested in June and has pleaded not guilty in his continuing case.
Kim admitted to fraudulently filling out a “request for verification of deposit” form in June 2011 submitted to his employer, Citibank, by Cecil Bank in Elkton for a $5 million loan applied for by Aslam. While Aslam’s Citibank account had only been open for one day with a balance of about $1.45 million, Kim asserted that it had been open for more than a year with an average balance of $1.6 million.
“The verification of deposit form was important because Cecil Bank had determined that the business needed to show proof of equity or cash on hand of at least $1.38 million to qualify for a SBA Guarantee,” Weiss’ office reported. “Although Cecil Bank approved the $5 million loan, the loan was never funded because the SBA determined that the loan did not qualify for the guarantee.”
Kim also admitted to conspiring with Aslam to obtain loans from Citibank and WSFS Bank under false pretenses. In particular, he admitted that he and Aslam agreed to submit loan requests in the names of third parties, when they knew that the loan proceeds would be controlled by Aslam.
The doctor had one of his business partners, identified only as Person A, submit a $1.72 million loan application through Citibank in January 2012 to fund construction costs for the Cecil Surgery Center, which is part of Alpha Medical Center, according to the indictment. Kim was the Citibank relationship manager who handled the loan and the SBA guarantee that was required as a precondition of Citibank’s approval.
Person A applied for the loan and represented themselves as the owner of the surgery center because both Kim and Aslam knew Aslam would not qualify for the loan due to his credit history and amount of outstanding loans. Person A was given an ownership interest in the center in exchange for applying for the loan, according to the indictment.
Similarly, in August 2013, Aslam had a family member of one of his business partners, identified only as Person B, apply for loan with WSFS for $2.183 million for Tri-State MRI & Imaging, also a part of the Alpha Medical Center. Person B was asked to submit the loan because Kim, who was now working at WSFS, and Aslam again knew that Aslam wouldn’t qualify for the loan, according to the indictment.
In submitting the loan requests, Kim failed to disclose his extensive financial relationship with Aslam. That relationship included Aslam providing Kim with ownership shares in two medical businesses, a check for $60,000, a 2009 BMW and biweekly payments from August 2013 to January 2017 totaling more than $600,000, among other items, according to the indictment.
As part of his guilty plea, Kim agreed to forfeit the BMW and $60,000 in cash.