13 charged in $19M Central Oregon bank fraud

http://www.minyanville.com/articles/ap-content/index/ap/baf43540b9d64bf0b8164618fcf3388a

Associated Press Nov 20, 2009 7:16 pm

PORTLAND, Ore. (AP) - The collapse of a Bend real estate development company has resulted in charges against 13 people in what prosecutors say is the largest Oregon fraud case to emerge from the national real estate boom and bust.

A federal grand jury in Eugene returned five separate indictments on Thursday that charged the principals in Desert Sun Development and others with mortgage and loan fraud that cost financial institutions more than $19 million in losses.

Developer Tyler Fitzsimons, several employees, two bankers and two mortgage brokers were among those indicted.

Arthur Balizan, FBI special agent in charge for Oregon, said the fraud took a heavy economic toll in Bend and Central Oregon, where the real estate market soared with one of the highest growth rates in the nation before the recession hit.

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The indictment also seeks forfeiture of a Ferrari, two Viper automobiles, and other assets related to the fraud and money laundering allegations.

All 13 defendants were scheduled for arraignment Dec. 16 in U.S. District Court in Eugene.

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Over $25 millions in bank loans obtained under false pretenses to fund construction of non-existent developments. Bank officer at Umpqua Bank colluded with the fraud.