David Saks: DIRTY EX BANK VICE PREZ NETS 10 YEARS FOR HORRIFIC MORTGAGE FRAUD

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

DIRTY EX BANK VICE PREZ NETS 10 YEARS FOR HORRIFIC MORTGAGE FRAUD

Former Bank Vice President Sentenced to 10 Years in Prison for Mortgage Fraud Scheme
Loan Fraud Scheme Cripples Community Bank with More Than $10 Million in Losses

U.S. Attorney’s Office January 28, 2013
  • Western District of Washington (206) 553-7970
 

A former senior vice president and loan officer at Pierce Commercial Bank was sentenced today in U.S. District Court in Tacoma to 10 years in prison and five years of supervised release for a mortgage fraud scheme that resulted in the collapse of the bank, announced U.S. Attorney Jenny A. Durkan.

Shawn L. Portmann pleaded guilty September 18, 2012, to conspiracy to make false statements in loan applications and to make false statements to the Department of Housing and Urban Development (HUD) and one count of making a false statement in loan applications. At sentencing, U.S. District Judge Benjamin H. Settle called it a fraud on multiple layers that “escaped detection because it involved people at every level participating in the fraud.”

“Shawn Portmann’s greed destroyed dreams, ruined careers, and defrauded millions from taxpayers,” said U.S. Attorney Jenny A. Durkan. “He now will face the consequences of the damage he did to so many. The depth of his fraud helped bring down a bank and haunted innocent homeowners whose communities were degraded with vacant, foreclosed homes and a precipitous decline in property values.”

According to the facts in the plea agreement, between 2004 and 2008, Portmann and other members of the conspiracy submitted false documents within various loan documents and applications. They falsified information about the borrowers’ qualifications as well as their intention to reside in the homes being financed.

A review of a sample of conventional and HUD loans showed that Portmann and his co-conspirators closed over 300 loans with false and fraudulent documents and information.

More than half of this sample of loans have defaulted or otherwise caused loss, causing an estimated loss of more than $10 million to Pierce Commercial Bank, secondary investors, and HUD/FHA. Court records detail multiple false statements included in loan documents regarding an applicant’s employment, income, and intention to reside in the property. Pierce Commercial Bank was closed by regulators in November 2010. Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009. This money was never repaid.

“Portmann’s greed resulted in the loss of the entire $6.8 million in TARP funds invested in Pierce Commercial Bank, directly contributed to the bank’s failure, and caused additional, significant financial losses for other TARP banks,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Most important, the consequences of Portmann’s mortgage fraud scheme will have a lasting impact on the community, which relies on local banks such as Pierce Commercial to serve as the mainstay for lending to its businesses and citizens. I want to praise the work of U.S. Attorney Jenny Durkan and our other law enforcement partners for their commitment to fighting fraud related to TARP.”

“Although this sentencing does not erase the financial and emotional harm caused by Mr. Portmann to numerous victims—spanning homeowners harmed by the artificially inflated housing market to innocent bank employees who lost their jobs—I hope that they receive a measure of relief knowing that this unscrupulous predator is facing justice for his actions,” said Laura M. Laughlin, Special Agent in Charge of the FBI Seattle Field Office. “The FBI and its partners remain committed to investigating criminal activity underlying the broader financial crisis. This case sends a message to all those who exploit others for personal gain: fraud in the mortgage industry is unacceptable and will not be tolerated.”

“Mortgage fraud has done a lot of damage to our communities and to our individual concept of the American Dream,” said Kenneth J. Hines, the Special Agent in Charge of IRS-Criminal Investigation in the Pacific Northwest. “This sentencing is a reminder of the serious consequences of mortgage fraud and of the relentless pursuit that the IRS and our law-enforcement partners are making to hold accountable people whose greed got the better of them.”

“The sentence handed down today is proof positive to anyone who uses the U.S. mail to commit mortgage fraud: If you are a purveyor of fraudulent mortgage schemes and you use the U.S. mail, you will be caught and you will serve time in federal prison,” said Bradley Kleinknecht, Inspector in Charge U.S. Postal Inspection Service.

Seven other defendants in this case have already been sentenced to prison terms for their roles in the fraud.

This case was brought as part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The case was investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI), the Washington State Department of Financial Institutions, and the United States Postal Inspection Service. The case was prosecuted by Assistant United States Attorneys Brian Werner and Arlen Storm.

source: FBI




David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • January 29 2013 09:24AM

Comments

David -- many in this area have been waiting to see how much time he was going to have to serve.  Now the only thing left is, how much restitution he will have to make, and to whom.

Posted by Steven Cook (No Longer Processing Mortgages.) almost 7 years ago

It couldn't get much worse than what that scoundrel orchestrated, Steven.

If there's anything left to conciliate, I hope a responsible trustee is entrusted with assisting any victim's recovery.

Posted by David Saks ((retired)) almost 7 years ago

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