LOC carroting scheme arrests | Falling US Dollar impact | SME lending

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Eight Individuals Charged with Multi-Million Dollar Fraudulent Lending Scheme Targeting Small Business Owners

From the DOJ Press Release: "NEWARK, N.J. – Eight individuals have been charged in connection with a large-scale lending scheme that targeted the owners of small businesses from across the United States, U.S. Attorney Alina Habba announced.

The complaint charges the defendants with multiple counts of conspiracy to commit wire fraud. Joseph Rosenthal, 33, of Holmdel, New Jersey; Nicholas Smith, 31, of Bradley Beach, New Jersey; James Missry, 40, of New York City, New York; Paul Cotogno, 31, of Long Branch, New Jersey; Blaise Cotogno, 32, of Tinton Falls, New Jersey; and Adam Akel, 30, of Long Branch, New Jersey, appeared before U.S. Magistrate Judge James B. Clark, III in Newark federal court and were released on bail. Matthew Robertson, 31, of Miami, Florida, who was arrested in the Southern District of Florida, appeared before U.S. Magistrate Judge Enjoliqué A. Lett and was released on bail. Nicholas Winter, 38, of Asbury Park, New Jersey is currently in custody on unrelated state charges.

According to documents filed in this case and statements made in court:

Since June 2020, the defendants enriched themselves by defrauding small business owners interested in obtaining financing for their businesses. Through misrepresentations and falsehoods, the defendants promised their victims that in exchange for money provided upfront, the defendants would ultimately extend a loan or line of credit to the victims. In reality, once a victim provided the upfront payment to the defendants, the defendants did not extend financing to the victim. Instead, the defendants kept the victims’ money and broke off communication. As a result of the scheme, the defendants defrauded thousands of victims out of millions of dollars."

What the falling US dollar has historically meant for stocks: By the numbers

A weak US dollar isn't a good thing for stocks, if history is any guide.

The US dollar touched a three-year low on Monday as President Trump ramped up his attacks on Federal Reserve Chair Jerome Powell.

The US Dollar Index (DX-Y.NYB) has declined 9% year to date.

Corporate Lending and Spending in ‘Wait and See’ Mode but Credit Quality Strong

American Express indicated last week that, in the words of CFO Christophe Le Caillec, “SME spending at wholesale merchants saw a modest acceleration in growth over the quarter, possibly reflecting higher purchases in advance of potential price increases. International card services spend was up 14%. This strong growth was seen across geographies with each of our top five markets growing by double digits.”

Legislative Notes

With Congress in recess for the holidays, the following are some business lending developments from various states:

Texas Senate Bill 2677 is being debated still before the State House. There has been some positive signs of the bill changing from its current form but too early to say.
Louisiana has introduced a Total Cost of Capital bill.
Maryland is done for the year legislatively without any new commercial financing laws.
South Carolina has a Total Cost of Capital bill in a subcommittee.