13 charged in Central Oregon mortgage and loan bank fraud over nonexistent developments

EUGENE, Ore. -- A federal grand jury in Eugene has indicted 13 people on mortgage and loan fraud charges arising from the collapse of a Central Oregon development company.

Acting U.S. Attorney Kent Robinson said Friday the actions of the defendants caused financial institutions to lose $19 million.

According to one of five indictments returned Thursday, principals in Desert Sun Development sought construction financing for commercial buildings in Bend and Redmond that were never built.

As part of the scheme, the defendants said construction was under way when it was not. In another indictment, it's alleged a construction loan officer falsely filed inspection reports with Umpqua Bank certifying that construction was under way.

The 13 defendants are scheduled to be arraigned Dec. 16.