Shawn R. Tieskotter, 37, Greenwood Village, Colorado, and Craig D. Patterson, 30, Littleton, Colorado, each pled guilty before U.S. District Court Judge Robert E. Blackburn to one count of mail fraud related to a mortgage fraud scheme. Tieskotter and Patterson were indicted by a federal grand jury in Denver on March 10, 2010. On May 20, 2010, a superseding indictment was filed. Both defendants pled guilty on July 7, 2010, and are scheduled to be sentenced on November 12, 2010.
According to the stipulated facts contained in the plea agreements and indictments and as previously reported on Mortgage Fraud Blog, between March 26, 2005, and continuing through June 30, 2005, in Colorado and elsewhere, Shawn Tieskotter and Craig Patterson knowingly executed and attempted to execute a scheme to defraud various financial institutions as well as commercial mortgage lenders. The scheme was executed in connection with residential mortgage loan applications relating to 13 properties in the Denver, Colorado metropolitan area. The neighborhoods included Aurora, Centennial, Littleton, Parker and Castle Rock, in Denver, Colorado.
As part of the scheme, Tieskotter and Patterson prepared and submitted applications for two loans, a first mortgage and a second mortgage. Each of these applications contained materially false and fraudulent representations that Tieskotter intended to use the property as his primary residence. Most of the applications also contained materially false and fraudulent representations about the extent of Tieskotter’s liabilities related to other residential mortgage loans, in that they failed to include a complete list of the properties Tieskotter owned or was in the process of purchasing and falsely indicated that one of Tieskotter’s other properties was leased. All of the false information was material to the lenders because it affected their ability to assess Tieskotter’s ability to re-pay the loans for which he was applying and it affected his eligibility for various loan products.
Tieskotter and Patterson also hid from lenders the extent of Tieskotter’s liabilities for other mortgages by preparing, submitting and causing to be prepared and submitted applications for multiple loans, secured by multiple properties, before such liabilities would appear on Tieskotter’s credit reports. This practice further affected the lenders’ ability to assess Tieskotter’s ability to re-pay the loans for which he was applying.
Tieskotter and Patterson also pulled money from the transactions at the time of closing by causing the disbursement at closing of additional monies to PK Design Group, LLC, an entity controlled by Patterson, or Dream Design, a trade name for an entity controlled by Tieskotter. Tieskotter and Patterson concealed from the lenders and other parties associated with the transactions their control of these entities. Tieskotter and Patterson also misrepresented that these monies would be used entirely for repairs or improvements to the properties, which led the lenders to falsely believe that the value of their collateral would increase as a result of these payments.
“Mortgage fraud remains a top priority of the Department of Justice. Those who perpetrate this fraud face prosecution and incarceration,” said U.S. Attorney David Gaouette.
“Mortgage fraud remains a significant crime problem for the Denver Metropolitan Area,” said FBI Special Agent in Charge James Davis. “Combating mortgage fraud will continue to be a priority for the FBI for the foreseeable future.”
United States Postal Inspector in Charge Antonio Gomez stated, “In an on-going effort to combat mortgage fraud, federal agents from multiple agencies have joined together to assure offenders are caught and prosecuted. United States Postal Inspectors in the Denver office will continue to work aggressively in this effort to pursue anyone who uses the mail in a fraudulent manner for criminal gain. We appreciate the United States Attorneys’ efforts in prosecuting these offenders and are pleased with the outcome in this investigation.”
“IRS Criminal Investigation stands ready to partner with law enforcement agencies to pursue individuals who commit Mortgage Fraud,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
Mail fraud carries a penalty of not more than 20 years imprisonment, and up to a $250,000 fine, per count.
This case was investigated by the Internal Revenue Service Criminal Investigation (IRS CI), the Federal Bureau of Investigation (FBI), and the United States Postal Inspection Service (USPIS).
The case is being prosecuted by Assistant U.S. Attorney Matthew Kirsch.