Former Banc-Serv exec sentenced to more than five years in prison

A federal judge on Thursday sentenced former financial executive Kerri Agee, 46, of Noblesville to five years and eight months in prison for her role in a 13-year fraud scheme at the financial services firm she once owned.

The sentence, imposed by Chief Judge Tanya Walton Pratt, fell short of the eight-year sentence prosecutors had requested.

Agee is the founder of Banc-Serv, a now-defunct Westfield company which provided back-office services to banks that participate in the U.S. Small Business Administration’s federal lending program. The firm was acquired by New York-based Newtek Business Services Corp. in 2016, and by the end of 2018 Newtek had declared its investment in Banc-Serv to be a total loss.

In August, Agee was found guilty on four counts of wire fraud and one count of conspiracy. Four former Banc-Serv employees were also found guilty on one or more similar charges. Prosecutors said the five had, between 2004 and 2017, submitted false information on loan applications in order to secure SBA guarantees for loans that should not have qualified for them.

Agee chose not to speak at her sentencing hearing in U.S. District Court in Indianapolis, but her attorney, Jonathan Bont, spoke on his client’s behalf.

Bont said impulsivity and poor judgement likely played a role in Agee’s actions, as did pride and the cultural pressure to succeed in her career. “That sense of helping people out and being good at your job is very, very intoxicating.”

Bont also said that Agee, a mother of three, had prioritized her family over her career, which led her to take shortcuts at Banc-Serv.

“She cut corners at work,” Bont said. “She’s human, like the rest of us. She made some mistakes.”

In imposing a lighter sentence than prosecutors had wanted, Pratt said she took into account Agee’s community ties, her apparent remorse and the fact that she is unlikely to reoffend.

At the same time, the judge said, the sentence reflects the seriousness of the crime, and the fact that Agee was “the organizer and leader of the criminal activity.”

In addition to prison time, Pratt also sentenced Agee to three years of post-incarceration supervised release, impoosed a $10,000 fine and ordered $2.29 million in restitution payable jointly and severally by Agee and her four co-defendants.

One of those co-defendants, former Banc-Serv Chief Operating Officer Kelly Isley, was sentenced this week to four years and nine months in prison. The other codefendants, Chad Griffin, Matthew Smith and Nicole Smith-Kelso, all have sentencing hearings scheduled for next week.

Bont asked that Agee be assigned to serve out her sentence at the Federal Correctional Institution in Pekin, Illinois, or the next nearest available facility.

That decision will be made by the U.S. Bureau of Prisons, likely within the next four to six weeks, Pratt said. Agee will be allowed to self-report to prison at that time.

Bont told IBJ that he and his client haven’t yet decided whether to appeal. They have 14 days in which to decide.