Bend
46° F
Mostly Cloudy
Mostly Cloudy
Advertisement

Five Plead Guilty in Massive Bend Bank Fraud Case

By News sources
Published On: Dec 12 2013 08:10:21 PM CST
Updated On: Jun 15 2010 05:07:03 AM CDT
EUGENE, Ore. -

Five defendants, including a mortgage broker, building inspector and escrow officer, appeared Tuesday before U.S. District Judge Michael R. Hogan and pleaded guilty to a variety of mortgage and loan fraud charges arising out of the collapse of Bend-based Desert Sun Development.

From 2004 through 2008, Desert Sun Development (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, 35, of La Grande and a DSD principal, pleaded guilty to conspiracy to commit bank fraud and 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, prosecutors said.

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.

Jeremy Kendall, 33, of Redmond 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 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., 44, a mortgage broker from Bend, 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, 58, from Junction City, 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 under way, when in fact no construction had occurred.

Bend escrow officer, Teresa Ausbrooks, 47, 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.

Last January, Michael Wilson, 58, of Murrells Inlet, South Carolina, pleaded guilty to one count of bank fraud. Wilson, DSD's residential construction superintendent, admitted making false statements about his income and assets in order to buy a DSD-built home.

Additionally, on June 4 and 7, 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 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.

Comments

The views expressed are not those of this company or its affiliated companies. Please note by clicking on "Post" you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms.

blog comments powered by Disqus
Advertisement