Urbandale Businessman Charged with Loan Fraud and False Bankruptcy Claims

Federal prosecutors have charged an Urbandale businessman with multiple counts of fraud after allegedly orchestrating a complex scheme involving fraudulent loan applications and false bankruptcy claims, authorities announced Wednesday.

Michael Slater, 52, faces six counts of bank fraud, three counts of making false statements in bankruptcy proceedings, and one count of bankruptcy fraud following a lengthy investigation by the FBI and the Office of the U.S. Trustee.

According to the indictment, Slater, who operated several small business ventures in central Iowa, allegedly submitted fraudulent loan applications to multiple financial institutions between 2019 and 2022. Prosecutors claim he falsified financial statements, inflated revenue figures, and misrepresented the financial health of his businesses to secure over $1.8 million in loans.

“The defendant deliberately manipulated financial records to create the illusion of profitable businesses,” said U.S. Attorney Jessica Reynolds at a press conference. “Financial institutions rely on accurate information when making lending decisions, and this type of deception undermines the integrity of our banking system.”

Court documents reveal that Slater allegedly used the fraudulently obtained funds for personal expenses, including luxury vehicle purchases, home renovations, and vacations, rather than the business purposes stated in the loan applications.

The case took another turn when Slater filed for Chapter 7 bankruptcy protection in April 2022. During bankruptcy proceedings, prosecutors allege he made false statements under oath about his assets, income, and previous financial transactions. The indictment states he concealed ownership of property in neighboring Dallas County and failed to disclose cash transfers to family members made shortly before filing bankruptcy.

“Bankruptcy protection exists to give honest individuals a fresh start,” said Regional Trustee Coordinator Martin Walsh. “When someone deliberately conceals assets or provides false information during bankruptcy proceedings, they’re not only breaking the law but taking advantage of a system designed to help those in genuine financial distress.”

This case highlights a growing concern about loan fraud in Iowa’s business community. According to the Iowa Banking Association, financial institutions across the state have reported a 32% increase in suspected fraudulent loan applications over the past three years, costing banks an estimated $27 million annually.

Small business loan fraud has become particularly problematic nationwide following the expansion of lending programs during the COVID-19 pandemic. The Small Business Administration’s Inspector General estimated that approximately $80 billion in potentially fraudulent loans were issued through pandemic relief programs, creating heightened scrutiny across all business lending.

For the Des Moines metropolitan area, where Slater’s businesses operated, the case represents one of the largest alleged individual loan fraud schemes in recent years. Local economic development officials worry such cases could make financial institutions more hesitant to approve legitimate loans to small businesses in the region.

“Every fraudulent loan makes it harder for honest entrepreneurs to access capital,” said Greater Des Moines Partnership CEO Jay Byers, who was not directly involved in the case but commented on its potential impact. “Our business community depends on trust between lenders and borrowers, and cases like this damage that relationship.”

If convicted, Slater faces up to 30 years in prison for each bank fraud count and up to five years for each bankruptcy-related charge. The indictment also seeks forfeiture of any property derived from the alleged fraudulent activities.

Slater’s attorney, Marcus Thompson, issued a brief statement maintaining his client’s innocence. “Mr. Slater denies all allegations and looks forward to presenting his side of the story in court,” Thompson said. “We ask the public to remember that an indictment is merely an accusation, and everyone is presumed innocent until proven guilty.”

Slater was released on a $100,000 bond following his initial court appearance on Tuesday. A trial date has been set for March 15, 2024, in the U.S. District Court for the Southern District of Iowa.

The case is being prosecuted by Assistant U.S. Attorney Jennifer Chang, who specializes in financial crimes.