Local man indicted on fraud charges

A Union County resident is among 13 people indicted following federal investigation into alleged crimes of a formerly prominent Bend development company.

Last Friday in Eugene, a federal grand jury returned five indictments carrying a variety of charges against people involved with Bend-based Desert Sun Development. The charges include mortgage and bank fraud, conspiracy to commit bank fraud, making false statements on loan applications, money laundering and more.

Shannon Egeland, 35, was identified in the first indictment as one of three principals of now-defunct Desert Sun Development, which was involved in a variety of major development projects in Central Oregon. He was the company’s vice president and secretary.

though in county voter registration records, he lists a Union address.

Others named in the indictment include Desert Sun Development President Tyler Fitzsimons, 31, of Prineville, Office Manager Jeremy Kendall, 33, of Redmond, and John Partin, the owner of Advanced Steel in Bend.

The indictment charges the four men with conspiracy, bank fraud, making false loan applications to banks and money laundering.

The U.S. Department of Justice alleges that the defendants sought construction financing for five commercial buildings in Bend and Redmond that were never built.

Banks loaned more than $25 million, and lost more than $9 million. The DOJ said that total losses to financial institutions came to over $19 million.

The department charges that Desert Sun Development made claims that construction was under way, when it was not. Partin is charged with issuing false invoices for steel building kits for buildings that did not exist.

The indictment also seeks forfeiture of a Ferrari, two Viper automobiles and other assets.

In a separate indictment, Robert Brink, 58, of Junction City is charged with making false statements to Umpqua Bank regarding Desert Sun Development’s construction loans.

The indictment alleges that he filed inspection reports certifying that construction was under way, when it was not. Brink was the bank’s construction loan officer.

In a third indictment, Egeland, Fitzsimons and Kendall are among nine people charged with offenses in connection with Desert Sun Development’s residential real estate investment program.

The DOJ charges that the defendants inflated applicants’ income and temporarily “parked” company funds in applicants’ bank accounts to obtain false proof that borrowers had independent funds available to them.

A Desert Sun employee, two mortgage brokers, a bank loan officer, a loan processor and a building materials supplier from Central Oregon are charged in the indictment along with Desert Sun executives.

In the fourth and fifth indictments, Teresa Ausbrooks, 47, of Bend and Michael Wilson, 58, of Murrells Inlet, S.C., are charged with bank fraud in connection with Desert Sun Development activities.

In its press release, the DOJ stressed that an indictment is only an allegation of a crime, and that defendants should be presumed innocent until proven guilty.

The case was investigated by the FBI, IRS Criminal Investigation and the Oregon Division of Finance and Corporate Securities.

“The economic hit that a community like Bend takes in a case like this one is very real,” said Arthur Balizan, special agent in charge of the FBI in Oregon. “When a development company collapses under the pressure of fraud, as is alleged in this case, we are left with millions of dollars in losses, empty lots and abandoned buildings. Everybody loses.”

Kenneth Hines, the IRS agent in charge of the Pacific Northwest, said the impact of the types of crimes alleged in the indictment can’t be overstated.

“Similar conduct surely played a role in shaking the confidence in our financial system last year,” Hines said. “Identifying and exposing those who enrich themselves through criminal means is a duty we wholeheartedly accept as federal law enforcement officers.”

Egeland is not listed in local telephone directories, nor did his name appear in a search of Union County property records.