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Desert Sun Co-Founder Pleads Guilty to $19 Million Scam

Published On: Feb 22 2012 02:33:16 AM CST   Updated On: Feb 22 2012 05:54:39 AM CST
EUGENE, Ore. -

Tyler Fitzsimons, the co-founder and CEO of now-defunct Desert Sun Development, has pleaded guilty to a variety of federal mortgage and loan fraud charges arising out of the collapse of his company, including conspiracy, bank fraud and money laundering, prosecutors said Wednesday.

Fitzsimons, 33, entered the pleas Tuesday as he appeared before U.S. District Judge Michael Hogan.

From 2004 through 2008, the company built homes and commercial property throughout Central Oregon.

According to the indictments, Desert Sun principals and other defendants caused financial institutions to lose more than $19 million.

Court documents say Fitzsimons and others knowingly submitted fraudulent documents, including false financial statements, to various banks in order to obtain financing to develop and construct many of Desert Sun?s commercial projects.

Once the loans were approved, prosecutors say, Fitzsimons and others submitted additional false documents, including fictitious contracts and invoices, to the banks to obtain loan proceeds for construction costs that were claimed to be associated with the fraudulent documents. Often, no construction had occurred.

Fitzsimons also developed a real estate "flipping" scheme at Desert Sun, the prosecutors say. In court records, Fitzsimons admitted, among other things, to undermining the loan approval process for individuals participating in the scheme by ?seasoning? or falsely inflating their bank accounts through temporary deposits or undisclosed, short-term loans and by submitting other fictitious documents, including letters explaining employment, large or recent deposits, and bonuses, to the banks funding the loans.

Six defendants, Shannon Egeland, Jeremy Kendall, Robert Brink, Teresa Ausbrooks, Michael Wilson, and Del Barber, Jr., who are charged in these and related cases previously pleaded guilty and are pending sentencing. Five others are due to go on trial Sept. 5.

Conspiracy to commit bank fraud carries a maximum sentence of five years in prison and a $250,000 fine. Bank fraud carries a maximum sentence of 30 years in prison and a $1 million fine, and money laundering carries a maximum sentence of five years in prison and a $250,000 fine.

Sentencing for Fitzsimons is set before Judge Hogan on Oct. 9 at 10 a.m.

The cases were investigated by the FBI, IRS-Criminal Investigations, and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Scott E. Bradford handled the prosecution of the cases.

Among the items seized from Fitzsimons: a 2006 Ferrari F430, which sold at government auction last April for $154,000. The bank was paid off and about $64,000 went into a U.S. Treasury "seized deposit fund," pending a final ruling on the car's forfeiture, according to the IRS.


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