Man Who Cooperated with Bank Fraud Investigation Sentenced to Probation

Allison Tussey —  April 21, 2015 — Leave a comment

Mark Avalos, 50, St. Peters, Missouri, was sentenced to five years probation and ordered to pay $497,000 in restitution after pleading guilty to bank fraud charges relating to his work as the controller for The Mortgage Store (TMS) in 2008. In imposing sentence, United States District Judge Henry E. Autrey noted Avalos’s cooperation in the criminal investigation into the collapse of TMS in 2008.

The Mortgage Store (TMS) was a major mortgage brokering business which, by 2008, had offices in four states and hundreds of employees. Jason Rauschelbach and John York were the owners of TMS. Each of them pled guilty to a criminal conspiracy charge. Rauschelbach is presently serving a 24 month sentence and York is awaiting the designation of a prison facility where he will serve the 21 month sentence he received earlier this month.

Court records relating to each of those cases showed that Rauschelbach and York took significant distributions from TMS even as the business was failing and falling delinquent in paying over in excess of $600,000 in federal employment taxes. TMS also funded the purchase of assets such as a ranch in Breckenridge, Colorado, an airplane, a condominium at the Lake of the Ozarks and several boats, all of which were owned by entities controlled by Rauschelbach and York.

Avalos was the controller of TMS. He pled guilty to a bank fraud charge relating to his involvement in a check kite in which the First Bank of the Lake lost approximately $850,000. The record showed that Avalos made only his salary at TMS and did not share in the distributions and asset purchases which benefited Rauschelbach and York.

This case was investigated by the Federal Bureau of Investigation, IRS Criminal Investigation, HUD Office of Inspector General, the Department of Labor Office of Inspector General, the DOL Employee Benefits Security Administration and the Postal Inspection Service. Assistant united States Attorney James E. Crowe, Jr. handled the case for the U.S. Attorney’s office.

Allison Tussey

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