Developer sentenced to 10 years in fraud case

Written by The Associated Press January 30, 2014 04:04 pm

EUGENE — A Union County resident must report to authorities by May 1 to start serving a 10-year prison sentence in connection with a wide-ranging mortgage fraud scheme that occurred during Central Oregon’s real estate boom and bust.

Shannon Egeland, 39, was vice president of the now-defunct Bend development company Desert Sun Development, which orchestrated tens of millions of dollars in mortgage fraud between 2004 and 2008. Company president Tyler Fitzsimons was previously sentenced to more than seven years in prison.

Egeland received a tougher penalty Wednesday because he committed crimes while awaiting sentencing after pleading guilty to bank fraud and conspiracy to commit bank fraud. He also was ordered to pay more than $13 million in restitution.

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

U.S. District Judge Ann Aiken heard an emotional plea by Egeland for a shorter prison sentence but sided with the prosecutor’s recommendation, The Register-Guard reported. She agreed with Assistant U.S. Attorney Scott Bradford’s assessment that Egeland’s motivation for his crimes was greed.

“The two of you did so much damage in that community, and you dragged people through so much,” she said.

Bradford said he was at a loss to explain Egeland’s conduct. One of the first people to cooperate when investigators began probing Desert Sun’s collapse, Egeland began resisting and trying to minimize his role after he realized he would have to plead guilty and go to prison, the prosecutor said.

Then, after entering that plea in June 2010, Egeland got into more trouble. In late 2010, he was convicted in Grant County of selling drugs within 1,000 feet of a school and then perjured himself when testifying at his trial, resulting in another conviction.

Last June, he was convicted of theft for stealing $9 worth of goods from a Fred Meyer store, Bradford said. That put him in violation of his plea agreement in the Desert Sun case, which required he break no laws while awaiting sentencing.

“Oh, what could have been for Shannon Egeland in this case,” Bradford said. “These are decisions he made, and these are things he decided to do.”

The Desert Sun fraud primarily involved two schemes, one centered on commercial development projects and the other a home construction-flipping scheme. Egeland and Fitzsimons used the ill-gotten money to support luxurious lifestyles, prosecutors said.