3 Danbury Residents Indicted In $2M Small Business Loan Fraud

DANBURY, CT — Five Connecticut residents, including three from Danbury, have been indicted by a federal grand jury in connection with a scheme to fraudulently obtain more than $2 million in small business loans through programs in Connecticut and Washington state, officials said.

The 20-count indictment was returned May 14 and includes charges of conspiracy to commit wire fraud, money laundering, and identity theft.

The defendants — Mycall Obas, 42, of Danbury; Mbali Ncube, 35, of Danbury; Pierre Obas, 49, of Danbury; Teresa Vargas, 43, of Hartford; and Stephen Walker, 30, of New Canaan — have each pleaded not guilty and were released on bond pending trial. Mycall Obas, Ncube, Pierre Obas, and Vargas were taken into custody on May 15. Walker was taken into custody May 16.

According to the indictment, the group used stolen or fictitious personal and business identities to apply for loans through the Connecticut Small Business Boost Fund (CT Boost) and the Washington Small Business Flex Fund (Flex), both supported by state economic development agencies. The applications were submitted to Grow America, formerly known as the National Development Council, a nonprofit lender that helped administer the programs.

According to federal prosecutors, the defendants submitted false documents, including fabricated certificates of organization, tax records, balance sheets, and income statements. Vargas, who worked as a contractor for the lender and helped process applications, handled several of the fraudulent submissions and asked to process specific applications submitted by co-conspirators, according to the indictment.

The indictment also states that the group fraudulently secured 12 loans totaling more than $2 million.

Each defendant faces up to 20 years in prison for conspiracy and wire fraud charges and up to 10 years for each illegal monetary transaction charge. Mycall and Pierre Obas also face mandatory two-year terms for aggravated identity theft.

The investigation was led by the FBI with assistance from the IRS Criminal Investigation Division and the Meriden and Danbury police departments. Authorities emphasized that all defendants are presumed innocent unless proven guilty.