Shawn R. Tieskotter of Greenwood Village, Colo., and Craig D. Patterson of Littleton, Colo., were indicted by a federal grand jury in Denver on March 10, 2010, on charges of money laundering, wire and mail fraud. Patterson was arrested by federal agents without incident. He appeared in U.S. District Court in Denver on March 12, 2010, for an initial appearance where he was advised of the charges pending against him. He was arraigned March 17, 2010. Shawn Tieskotter received a summons to appear in U.S. District Court in Denver on March 25, 2010, where he will be advised of the charges pending against him.
According to the indictment, between March 26, 2005, and continuing through June 30, 2005, in Colorado and elsewhere, Tieskotter and Patterson knowingly executed and attempted to execute a scheme to defraud various financial institutions, as well as commercial mortgage lenders. The scheme was executed in connection with residential mortgage loan applications relating to 13 properties in the Denver, Colorado metropolitan area. The neighborhoods included Aurora, Centennial, Littleton, Parker and Castle Rock.
As part of the scheme, Tieskotter and Patterson prepared, submitted and caused to prepare and submit applications for residential mortgage loans and related documents in Tieskotter’s name. The applications included a first mortgage and second mortgage for each of the 13 properties. Each of these applications contained materially false and fraudulent representations that Tieskotter intended to use the property as his primary residence and most of the applications contained materially false and fraudulent representations about the extent of Tieskotter’s liabilities related to the other residential mortgage loans.
It was further part of the scheme for Tieskotter and Patterson to hide from lenders the extent of Tieskotter’s liabilities for the other mortgages, before such liabilities would appear on Tieskotter’s credit reports. At the time of closing, Tieskotter and Patterson caused additional disbursements of monies to PK Design Group LLC, an entity controlled by Patterson, or Dream Design, a trade name for an entity controlled by Tieskotter. Tieskotter and Patterson concealed from the lenders and other parties associated with the transactions their control of these entities.
Upon conviction of the alleged offenses, Tieskotter and Patterson shall forfeit to the United States, all property constituting or derived from proceeds traceable to the commission of the offense, including but not limited to a sum of money equal to $219,566 for money laundering and $4,710,666.86 for wire and mail fraud charges.
“Prosecuting those responsible for mortgage fraud is a priority of the Department of Justice,” said U.S. Attorney David Gaouette. “Those attempting to illegally take advantage of financial institutions will face prosecution.”
“Combating mortgage fraud is a priority because of its impact on the well being of our housing markets and national economy,” said Special Agent in Charge James H. Davis. “Law enforcement and the community at large must maintain their vigilance in identifying those who commit these types of fraud.”
“The use of the Postal system to carry out or further any fraud is a crime which is investigated thoroughly by the United States Postal Inspectors,” said U.S. Postal Inspector in Charge Shawn Tiller. “We were pleased to once again team up with our federal partners in the Denver area to bring these perpetrators to justice.”
“IRS Criminal Investigation will work diligently with our law enforcement counterparts to insure mortgage fraud is vigorously investigated and brought to justice. Mortgage fraud directly threatens the financial health of the communities in which we live, said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.”
Counts one through nine allege wire and mail fraud, which carries a penalty of not more than 20 years imprisonment, and up to a $250,000 fine, per count. Counts 10 through 13 allege money laundering, which carries a penalty of not more than 10 years imprisonment, and a fine of up to $250,000.
This case was investigated by the Internal Revenue Service Criminal Investigation (IRS CI), the Federal Bureau of Investigation (FBI), and the United States Postal Inspection Service (USPIS).
The charges are allegations, and the defendants are presumed innocent unless and until proven guilty.
Mortgage fraud is a major part of President Barack Obama’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
For more information, visit http://denver.fbi.gov.