Ex-Texas businessman guilty of disaster loan fraud

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Associated Press

Posted on March 17, 2014 at 8:02 PM

BEAUMONT, Texas (AP) — The former owner of a business in southeast Texas has pleaded guilty to disaster loan fraud after Hurricanes Humberto and Ike.

U.S. Attorney John M. Bales said in a news release Monday that 58-year-old Kenneth W. Matthews of Fort Pierce, Fla., former owner of MegaBowl in Port Arthur, pleaded guilty March 12 to conspiracy to defraud the Small Business Administration.

He faces up to five years in prison. A sentencing date hasn't been set.

According to information presented in court, Matthews conspired with his general contractor and subcontractor to submit falsely inflated invoices and checks for repair work done after the hurricanes, getting loans of $750,000 after Humberto and $760,000 after Ike.

Matthews agreed to pay criminal restitution of $500,000 and remains civilly liable for all loan proceeds.

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