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Five plead guilty in federal court to $19 million bank fraud case in Oregon

NationalMortgageProfessional.com
Jun 17, 2010

Five defendants, including a mortgage broker, building inspector, and escrow officer, appeared before U.S. District Judge Michael R. Hogan and pled guilty to a variety of mortgage and loan fraud charges arising out of the collapse of Desert Sun Development (DSD), a company previously headquartered in Bend, Ore. From 2004-2008, DSD built commercial buildings and residential housing throughout Central Oregon. According to the indictments, DSD principals and other defendants caused financial institutions to lose more than $19 million. Shannon Egeland of La Grande, Ore. and a DSD principal, pleaded guilty to conspiracy to commit bank fraud. Egeland admitted to “seasoning” several DSD employees’ bank accounts with his own money. By “seasoning” he temporarily deposited a large sum of money, approximately $25,000, into the employees’ bank accounts to temporarily inflate their account balances, which helped them falsely qualify for loans to buy DSD-built homes. He further admitted to “seasoning” his own bank account with DSD and signing a fraudulent loan application to falsely qualify for a $1.9 million loan to build his 20,000 square-foot home in Powell Butte, Ore. Jeremy Kendall of Redmond, Ore. and also a DSD employee, pleaded guilty to two counts of conspiracy to commit bank fraud and two counts of bank fraud. As part of his plea, Kendall admitted to creating and submitting fraudulent documents to various financial institutions to gain financing for various DSD projects. Kendall was involved in at least five DSD projects where DSD obtained financing, submitted draw requests, and received approximately $4.2 million in loan proceeds but completed no substantive construction. He further admitted to “seasoning” bank accounts, including his own, for individuals seeking loans to buy homes built by DSD. Del Barber Jr., a mortgage broker from Bend, Ore. pleaded guilty to conspiracy to commit bank fraud. He admitted to preparing and submitting a false loan application to a lending institution. The fraudulent loan application was for a DSD employee trying to buy a DSD built home. Robert Brink from Junction City, Ore. pleaded guilty to making false statements to Umpqua Bank regarding DSD’s construction loans. Brink was a building inspector for Umpqua Bank and filed false inspection reports for two of DSD’s commercial projects, certifying to the Bank that construction was underway, when in fact no construction had occurred. Bend, Ore. escrow officer, Teresa Ausbrooks entered a guilty plea to two counts of bank fraud. She admitted to making false statements relating to her income and debts in applications to finance the construction of two homes, including one to be built by DSD. Previously, Michael Wilson of Murrells Inlet, S.C., pleaded guilty to one count of bank fraud. Wilson was DSD’s residential construction superintendent. Wilson admitted making false statements about his income and assets in order to buy a DSD built home. Additionally, on June 4 and 7, 2010, federal agents executed seizure warrants for assets allegedly purchased by a DSD principal with the proceeds of the fraud related to the DSD bank fraud scheme. Those assets included a Ferrari, a Dodge Viper, and a Malibu Wakesetter boat. “Mortgage fraud helped decimate the housing market and has effectively robbed many Americans of the dream of home ownership. We can and we will hold these financial criminals accountable,” said United States Attorney Dwight C. Holton. A status hearing is scheduled for Dec. 13, 2010 at 1:30 p.m. before U.S. Magistrate Thomas M. Coffin. Conspiracy to commit bank fraud carries a maximum sentence of five years of imprisonment and a $250,000 fine. Bank fraud and making false statements to a financial institution each carry a maximum sentence of 30 years of imprisonment and a $1 million fine. These cases were investigated by the FBI, the IRS, and the Oregon Division of Finance and Corporate Securities and prosecuted by Assistant U.S. Attorney Scott Bradford. For more information, visit portland.fbi.gov.
Published
Jun 17, 2010
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