Bend mortgage broker sentenced to nearly 5 years

A Bend mortgage broker who took advantage of the anything-goes real estate bubble to get millions of dollars through shady loan applications was sentenced Tuesday to almost five years in prison.

Peter Wilkinson, 44, earlier pleaded guilty to bank fraud and conspiracy to commit loan application fraud, wire fraud and bank fraud. He was sentenced to a 57-month prison term during an appearance in U.S. District Court in Eugene.

Six other people who allegedly took part in the scheme also have pleaded guilty to similar charges or soon will. The government is seeking prison terms for all six and restitution totaling more than $15.5 million, with almost $10 million of that from Wilkinson alone.

U.S. District Judge Ann Aiken took the restitution amount for Wilkinson under advisement and will issue a decision later. Wilkinson was given 90 days to report to federal prison authorities to begin serving his sentence.

The case provided a window into the abuses that helped inflate the national real estate market and sent the national economy into its worst recession in generations when the bubble burst.

It involved more than 50 loans on 34 Deschutes County properties, loans that a prosecutor said used false income statements, inflated bank accounts, straw borrowers, hidden liabilities and other tricks to secure financing that borrowers could not repay.

Assistant U.S. Attorney Scott Bradley said Wilkinson, as the mortgage broker with Deschutes Mortgage Group who submitted the fraudulent loan applications, was the heart of the scheme; he encouraged borrowers to lie about their income, loaned them money to make them appear wealthier than they were and knowingly used made-up numbers to help them get loans.

Bradley called Wilkinson a “master manipulator” who, over the course of three years, enriched himself without regard to the consequences.

“He was rolling in the money,” Bradley said. “He was motivated by greed.”

Wilkinson made an impassioned plea for leniency, saying he was deeply sorry for the role he played in the financial meltdown and accepting responsibility for his acts.

But he denied that he was acting out of greed and said he has lost everything but his family as a result of the charges and the government’s five-year investigation and prosecution.

“I am beyond sorry for the conduct I’ve committed,” he said.

Wilkinson’s wife also made a tearful appeal for a shorter sentence, saying her husband is a man of good character who simply got caught up in the heated market through his strong desire to help others. She said he let his exuberance for helping people achieve their financial dreams bypass his judgment.

But Aiken told Wilkinson he knew better. She said he was the one who should have known not to submit loan applications he knew were bogus and who helped others take advantage of a mortgage system where checks and balances were almost absent.

“There’s no doubt that in the scheme of things, you are the person at the top of the heap,” she said.

Aiken acknowledged that lenders also were at fault, but she accepted the prosecution’s argument that cheating to take advantage of lax lending standards was akin to stealing from a neighbor just because the door was left unlocked. The fact that Wilkinson was a small fish in the financial meltdown didn’t absolve him of his acts, she said.

“I think all of us wish there were bigger fish in the courtroom today to accept responsibility,” Aiken said. “They’re not here.

“Maybe someday they will be.”