Fraud infecting commercial-loan agreements

Zeke had been in business for more than 10 years leasing golf carts to country clubs and other groups who enjoyed the sport in the Midwest. On the surface, his financial statements looked solid — thanks to a crooked CPA. But, in reality, Zeke was losing money each year, and he was resorting to commercial-loan fraud to keep afloat.

Here’s an example of how Zeke gamed the system until he was caught. Zeke’s customer, a country club called Lucky Star, wants to replace its old fleet of 60 golf carts with new ones, which they rent to golfers each day. Zeke agrees to lease the carts for $360,000 over five years plus an option in Lucky Star’s favor to purchase the carts for $150,000 when the lease expired.