A Californian man who netted $5.9 million in a loan scam pled guilty Monday to federal bank fraud and tax charges. Derek Richard Brewart, 53, a former insurance agent and owner of Hamilton Brewart Insurance Agency of Upland, California, plead guilty before U.S. District Judge, Jesus G. Bernal.
Brewart was securing loans from Universal Bank using his client’s names without their permission. He pled guilty to filing false tax returns and bank fraud after investigations found that from 2008 through 2012, fraudulent loan applications for premium financing loans were secured and used to pay HBIA’s expenses. To cover up the scheme, Brewart routed Universal Bank correspondence about the loan applications to a post office box instead of his clients’ mailing addresses.
“Brewart’s greed led him to rip off his clients and violate his fiduciary responsibility as a licensed agent,” said Insurance Commissioner Dave Jones. “We will continue to use every resource available and work with our law enforcement partners to aggressively pursue criminals.”
False tax returns for 2010 and 2011 were also filed by Brewart. In his guilty plea, Brewart admitted that $785,922 of the income he received wasn’t reported to the Internal Revenue Service (IRS) over those two years.
Judge Bernal is scheduled to sentence Brewart on July 13th, where he will face a maximum sentence of 30 years in federal prison for the bank fraud charges, and 3 years for the tax charges. Both federal and state law enforcement agencies participated in the investigation, including the California Department of Insurance, the Internal Revenue Service – Criminal Investigation, and the Federal Bureau of Investigation. The United States Attorney’s Office represented the case as the prosecution.