Former Vice President of Pierce Commercial Bank Pleads Guilty to Fraud
Leader of Mortgage Fraud Scheme Faces 10 to 14 Years in Prison
A former senior vice president and loan officer at Pierce Commercial Bank pleaded guilty late today to a mortgage fraud scheme that resulted in the collapse of the bank, announced U.S. Attorney Jenny A. Durkan. Shawn L. Portmann, 40, pleaded guilty 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.
“Community banks are a critical part of our financial system,” said U.S. Attorney Jenny A. Durkan. “Mr. Portmann lined his pockets with millions of dollars in commissions and bonuses at the expense of the families who now find themselves underwater on their mortgages. His fraudulent conduct led to the demise of Pierce Commercial Bank and significant losses for other financial institutions.”
Under the terms of the plea agreement, both Portmann’s attorney and prosecutors will recommend a sentence between 10 and 14 years in prison when sentenced by U.S. District Judge Benjamin H. Settle on January 28, 2013. Portmann was indicted in August 2011 for a mortgage fraud scheme that resulted in the collapse of Pierce Commercial Bank in November 2010.
According to records in the case, between 2004 and 2008, Portmann and the other defendants conspired to submit 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. Based on a review of a sample of loans, the co-conspirators caused more than 270 loans that contained false and fraudulent documents and information to be funded by Pierce Commercial Bank representing in excess of $45 million in loan proceeds. More than 100 of these loan files have defaulted, causing in excess of $10 million in loss to Pierce Commercial Bank, secondary investors and HUD. The indictment details multiple false statements included in loan documents regarding an applicant’s employment, income, and intention to reside in the property.
Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009. This money was never repaid.
Source: U.S. Federal Bureau of Investigation
- 320 reads
