Five enter pleas to loan, fraud charges

By Observer staff June 23, 2010 01:52 pm
A Union County man and four other defendants entered guilty pleas in federal court last week to a variety of loan and fraud charges arising out of the collapse of Bend development company Desert Sun Development.

According to a press release from the U.S. Department of Justice, Desert Sun principal and Union County resident Shannon Egeland pleaded guilty to conspiracy to commit bank fraud in the case that caused financial institutions to lose more than $19 million.

The Department of Justice says Egeland is from La Grande, though in county voter registration records, he lists a Union address.

The department said Egeland admitted to “seasoning” several Desert Sun employees’ bank accounts with his own money. By “seasoning,” he temporarily deposited large sums of money into the accounts to inflate their balances.

Egeland also admitted to seasoning his own bank account and signing a fraudulent loan application to falsely qualify for a $1.9 million loan to build a 20,000 square foot home in Powell Butte.

Those pleading guilty to other charges alongside Egeland included Jeremy Kendall, 33, of Redmond, Del Barber, 44, of Bend, Robert Brink, 58, of Junction City, and Teresa Ausbrooks, a 47-year-old Bend escrow officer.

Previously, Michael Wilson, 58, of Murrells Outlet, S.C., pleaded guilty to one count of bank fraud.

Additionally, federal agents seized assets that were purchased with the proceeds of the fraud related to the Desert Sun scheme, according to the department.

“Mortgage fraud helped decimate the housing market and has effectively robbed many Americans of the dream of home ownership,” said United States Attorney Dwight C. Holton. “We can and we will hold these financial criminals accountable.”

Kendall, a Desert Sun employee, pleaded guilty to two counts of conspiracy to commit bank fraud and two counts of bank fraud. As part of his plea, he also admitted to creating and submitting fraudulent documents to various financial institutions.

Barber, a mortgage broker from Bend, pleaded guilty to conspiracy to commit bank fraud. The justice department said he admitted to submitting a false loan application for a Desert Sun employee trying to buy a Desert Sun-built house.

Brink, a building inspector for Umpqua Bank, pleaded guilty to making false statements about Desert Sun construction loans.

The department said he filed false inspection reports for two commercial projects, falsely certifying that construction was under way.

Ausmus, the escrow officer, pleaded guilty to two counts of bank fraud, admitting to making false statements relating to her income and debts on applications to finance construction of two home.

The guilty pleas were accepted in U.S. District Court in Eugene. A status hearing is scheduled for Dec. 13.

Conspiracy to commit bank fraud carries a maximum sentence of five years in prison and a $25,000 fine. Bank fraud and making false statements to a financial institution each carry a maximum of 30 years in prison and a $1 million fine.

The case was investigated by the FBI, IRS and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Scott Bradford was the prosecutor.