United States Attorney Jenny A. Durkan
Western District of Washington
FOUR INDICTED FOR CONSPIRACY THAT RESULTED IN FAILURE OF TACOMA BANK
Leader of Conspiracy Arrested and Charged with 30 Counts Including Mail Fraud and Money Laundering
Four former bank employees have been indicted by the grand jury in connection with fraudulent mortgage loans originated at the now defunct Pierce Commercial Bank. The lead defendant in the case, SHAWN L. PORTMANN, 39, was arrested this morning and will make his initial appearance in U.S. District Court in Tacoma at 3:00 today. PORTMANN, a former Senior Vice President and loan officer at the Bank, is charged in a 30 count indictment with conspiracy, false statements on loan applications, false statements to HUD, mail fraud, wire fraud, bank embezzlement, and transactional money laundering. Three other defendants are charged in the indictment: SONJA L. LIGHTFOOT, 52, the former Senior Vice President of Residential Lending at Pierce Commercial Bank; JEANETTE R. SALSI, 54, a former underwriter at Pierce Commercial Bank; and ADAM S. VOELKER, 38, a former loan processor at Pierce Commercial Bank from January 2005 until July 2006. Pierce Commercial Bank was closed by regulators in November 2010, in part because of mortgage lending losses.
“This conspiracy didn’t just damage Pierce Commercial Bank. This activity helped pump up the housing bubble that artificially drove up valuations, and now leaves innocent families underwater on their mortgages,” said U.S. Attorney Jenny A. Durkan. “Mr. Portmann and his co-conspirators are being held accountable for their criminal conduct that was fueled by greed. I commend the painstaking work by FBI, IRS-CI, HUD-OIG and U.S. Postal Inspection Service in bringing this case.”
According to the indictment, 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 about the value of the properties being purchased. 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/FHA. The indictment details multiple false statements included in loan documents regarding an applicant’s employment, income, and intention to reside in the property.
The indictment alleges that PORTMANN committed mail fraud affecting a financial institution when sending various documents through the mail to support the scheme. PORTMANN and LIGHTFOOT are charged with counts of wire fraud stemming from the sale of these mortgages on the secondary market to financial institutions such as Wells Fargo, Countrywide, IndyMac and J.P. Morgan Chase.
PORTMANN is charged with bank embezzlement for billing Pierce Commercial Bank for advertising that never occurred. PORTMANN set up two companies, The Principles, LLC and WM1, LLC. Using these companies PORTMANN billed Pierce Commercial Bank more than $150,000 for advertising that was never provided. PORTMANN used some of these funds to purchase a $68,000 BMW. That purchase is the basis for the transactional money laundering count.
“This investigation targets an unscrupulous goliath in the mortgage industry—someone who brokered thousands of loans with little regard for the ability of the borrowers to make good on the payments,” said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. “Fraudulent business practices on thousands of loans that Mr. Portmann and his co-conspirators pushed through unquestionably contributed to the larger housing market decline and the failure of Pierce Commercial Bank.”
“Mortgage fraud has burdened our economy and caused an urgent reliance on the government, and ultimately the taxpayer, to bolster devastated communities,” said Wayne North, Special Agent in Charge of HUD’s Office of Inspector General. “HUD OIG is deeply committed to working with our law enforcement partners in the continuing efforts to bring to justice those that seek to enrich themselves at the expense of our economic well-being.”
“Mortgage fraud is a modern day plague throughout the country that has burdened lenders with bad loans and neighborhoods with abandoned and deteriorating properties,” said Marcus Williams, the IRS Special Agent in Charge of the Pacific Northwest. “Washington residents can rest assured knowing that federal law enforcement takes mortgage fraud seriously since it played a major role in almost crippling our nation’s banking system just a few years ago.”
Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009. This money was never repaid.
False statements in loan applications, mail fraud affecting a financial institution, and bank embezzlement are punishable by up to 30 years in prison and a $1,000,000 fine. Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. Conspiracy is punishable by up to five years in prison and a $250,000 fine. False statements to HUD are punishable by up to two years in prison and a $250,000 fine. Transactional money laundering is punishable by up to 10 years in prison and a $250,000 fine.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI) and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys Brian Werner and Arlen Storm.
This indictment is brought in connection with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.