13 Charged in $19M Central Oregon Bank Fraud

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.

"When a development company collapses under the pressure of fraud, as is alleged in this case, we are left with millions of dollars in losses, empty lots and abandoned buildings," Balizan said. "Everyone loses."

The grand jury charged Fitzsimons, 31, of Prineville, with multiple counts of bank fraud, conspiracy to commit bank fraud, money laundering and making false statements to banks.

Also charged in the indictment naming Fitzsimons were two former employees of the company, Jeremy Kendall and Shannon Egeland, and Bend businessman John Partin.

No defense attorneys were listed among the court documents filed with the indictments. Efforts to contact the various defendants were not immediately successful, except for Partin.

He said he did not learn about being named in an indictment until a friend called.

"I thought he was just being funny," Partin said. "I'm dumbfounded. I've got nothing to hide. All I did was sell a guy some steel."

Partin claims that Fitzsimons skipped out of a job on him and still owes him money. But he said gave all his records to federal agents who requested them and has cooperated fully with the investigation.