Head of former Bend company gets 7½ years in prison

Tyler Fitzsimons of Desert Sun Development also ordered to pay $22 million.

By Elon Glucklich / The Bulletin / @EGlucklich


Published Dec 12, 2013 at 07:11PM / Updated Dec 12, 2013 at 07:41PM

A federal judge has sentenced the former president of a defunct Bend development company to 90 months in prison, and ordered him to pay $22 million in restitution.

Chief U.S. District Judge Ann Aiken sentenced Tyler Fitzsimons and four other former employees of Desert Sun Development this week in federal court in Eugene.

Fitzsimons received the longest sentence: 7½ years. The others and their sentences are: Bend residents Jeffrey Sprague, 46 months in prison; and Shaun Little, five years probation; Washington state resident Jeremy Kendall, 18 months in prison; and Teresa Ausbrooks, of New Mexico, 366 days in prison.

All the defendants have been released and must report to prison once the Federal Bureau of Prisons decides where each defendant will serve time, Assistant U.S. Attorney Scott Bradford said.

Starting in 2004, Fitzsimons and Shannon Egeland, former Desert Sun vice president, falsified bank loan and tax documents on commercial and residential projects across Central Oregon, according to a news release issued Thursday by the U.S. Attorney’s office.

The pair recruited 11 other Desert Sun employees, loan officers and builders tied to the company, obtaining $19 million from financial institutions for a variety of construction projects.

Desert Sun employees used those funds for personal use, purchasing cars, boats and other items, and started a real estate flipping scheme, without following through on many of the construction projects, according to the news release.

Desert Sun filed for bankruptcy in 2007, as Central Oregon’s red-hot real estate market began to collapse.

A federal grand jury indicted Fitzsimons and the other defendants in late 2009. Fitzsimons pleaded guilty to conspiracy, bank fraud and money laundering charges in early 2012. The other defendants were charged with a variety of bank fraud and conspiracy charges.

Egeland has a sentencing hearing set for Jan. 29. Another defendant, John Partin, is scheduled to be sentenced March 12.

Six other defendants have already been sentenced.

“The illegal actions of these defendants exemplify the conduct that wreaked havoc in the mortgage, financial and real estate industries for the past several years,” U.S. Attorney Amanda Marshall said in the news release.

— Reporter: 541-617-7820, eglucklich@bendbulletin.com