Maybe we're from different countries, but in the U.S., you can't be arrested just because you can't repay a bank loan.
You can be sued,
You can have assets repossessed,
Your credit is probably ruined for a decade,
but the bank just takes what it can get from you and writes off the rest as "Bad Debt." They actually set money aside for that at the beginning of the fiscal year. It's called "Allowance for Bad Debt."
You can only be arrested if you actually intended to defraud the bank. (And check cashing places are LYING when they say they'll have you arrested. They'll tell you it's bank fraud because you give them a check at the beginning. They only say that because it's effective.)
The reason is that 100k is peanuts for the investor, not enough for the overhead of tracking the investment. While 10 million looks like something that could bring profit to the investor.
My guess is that the investment fund is of about 100 million or so. If it where a 1 billion fund, Dogbert would have ask for at least 100 million. If the fund where 20 millions or less, then it would have being deemed too much to invest without first investigating.
10% is about the sweet spot. Big enough to be worth the effort, while small enough to not create a crisis if it fails.