‘Greedy’ Bank VP Sentenced for Mortgage Fraud That Led to Bank’s Collapse
A former senior vice president and loan officer at Pierce Commercial Bank has been sentenced to 10 years in prison and five years of supervised release for a mortgage fraud scheme that resulted in the collapse of the bank.
Shawn L. Portmann previously 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.
“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.