Final Defendant Sentenced In Tacoma In Long Running Mortgage Fraud Case

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Final Defendant Sentenced In Tacoma In Long Running Mortgage Fraud Case

The final defendant in a long running investigation of mortgage fraud at Pierce Commercial Bank, going back to the financial crisis of 2008, has been sentenced in U.S. District Court in Tacoma, according to a release from U.S. Attorney Annette L. Hayes for the Western District of Washington.

During the period of the investigation, 15 defendants ranging from vice president to loan officers were sentenced for fraud that resulted in the bank collapse.

 “Those whose crimes deepened the damage from the 2008 financial crisis deserve to be punished

U.S. Attorney Annette L. Hayes for the Western District of Washington

just like any other criminal,”  Hayes said in the release.  “This defendant and 14 other well-paid bank employees from loan officers to bank vice presidents forged documents and made false statements to close loans they knew were not sound.  The result was the collapse of Pierce Commercial Bank and the expenditure of nearly $7 million of taxpayer funds to address the financial mess these defendants left behind.”

The most recent sentence was for Ben Leske, 40, of Puyallup. Between 2005 and 2008 Leske worked as a loan officer for PC Bank Home Loans, a division of Pierce Commercial Bank.  LESKE pleaded guilty in May 2017, to making false statements on loan applications.   U.S. District Judge Benjamin H. Settle sentenced LESKE to 30 days of home detention, 100 hours of community service, two years of supervised release and more than $131,000 in restitution.

 According to records in the case, between 2004 and 2008, the architect of the fraud, Shawn 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, according to the release.

 A review of a sample of conventional and HUD loans showed that members of the conspiracy 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.

Close every loan culture in mortgage fraud case

  “With the sentencing of mortgage banker Ben Leske, 15 bank employees have now faced justice for a conspiracy that directly contributed to Pierce Commercial Bank’s failure and the loss of $6.8 million in TARP bailout funds,” Special Inspector General for the Troubled Asset Relief Program Christy Goldsmith Romero, said in the release.

 “Ringleader Shawn Portmann, who was sentenced to 10 years in federal prison for his crimes, created a culture at PC Bank Home Loans, Pierce Commercial Bank’s mortgage lending office, where all loans applications were expected to approved, regardless of the applier’s ability to repay.  Under this ‘close every loan’ culture, he and his co-conspirators submitted false and fraudulent documents showing borrowers who appeared qualified for mortgages when in fact they were not.

“As a result, PC Bank Home Loans greatly expanded the residential mortgage lending operations of Pierce Commercial Bank prior to the financial crisis from no more than $3.9 million a month to nearly $500 million a year. I thank the U.S. Attorney’s Office for their commitment to fighting fraud related to TARP,” Romero said in the release.

 

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