Jonathan Stempel

NEW YORK, (Reuters) – A Florida man was sentenced to eight years in prison for a scheme that defrauded banks to provide loans of $134 million to his private equity fund. Federal prosecutors from Manhattan stated Friday.

Elliot Smerling 53 of Lake Worth (Florida) pleaded guilty February to both bank frauds and securities fraud.

Prosecutors claimed that Smerling created subscription agreements, bank statements, and audit letters to get loans from Silicon Valley Bank. He also rented office space, hired staff, and used them to make his JES Capital funds look legitimate.

Smerling, however, used the loan proceeds “to be a successful financial representative” with multiple properties and luxurious cars like a Ferrari (NYSE;), while he also lost approximately $40 million in day trading.

Smerling received his sentence from Manhattan U.S. district judge Denise Cote. This was the lowest end of the recommended 97- to 120-month federal guidelines. Smerling agrees to pay $134 million in forfeiture under the plea agreement.

U.S. attorney Damian Williams, Manhattan stated that “Elliot Smerling had previously admitted to funding his private equity fund through submitting fraudulent documents and guarantees to lenders.” “Smerling is now properly sentenced.”

David Kubiliun is a Smerling lawyer. He declined to comment.

Smerling lawyers stated in a court filing that the client, who was married and father of two children, had apologized to banks and government. He also accepted liability for his “greediness and ambition to surpass his morals and values.”

U.S. against Smerling is the case. 21-cr-00317.