Lake Oswego’s David Ovist, 45, was sentenced Monday for his role in a $2.5 million mortgage fraud scheme that involved four other investors who were also sentenced recently.

U.S. District Court Judge Anna J. Brown sentenced David Ovist to 57 months in prison and three years of supervised release.

Ovist was a licensed mortgage loan broker and the owner of Oregon Mortgage Services Inc., located in Beaverton. He was also a real estate investor.

According to United States Attorney S. Amanda Marshall, on Feb. 8, “Ovist was convicted of bank fraud and wire fraud following a 10-day jury trial for preparing residential loan applications for 12 different properties that falsified the borrower’s financial qualifications. The applications were then submitted by Ovist to seven different banks and mortgage lenders.

Ovist and the other investors manipulated the underwriting process in order to qualify borrowers for home loans they would not otherwise be qualified for so the investors could buy houses as an investment.

“To convince lenders to approve the loans, Ovist or the other investors falsified information about borrowers who had been recruited to obtain loans in their names because they had good credit, even though they could not otherwise qualify for the loans.

They falsely inflated the monthly income stated on the home loan applications, omitted liabilities including other mortgages, falsely claimed that the borrower intended to live in the property as a primary residence rather than purchase it as an investment property, used straw buyers to obtain loans for some of the properties, forged rental agreements to make it appear as if a borrower received rental income when she did not, and falsified employment verifications about the existence, nature and length of a borrower’s employment.”

Judge Brown recently sentenced four other investors for their roles in the scheme. Don Kazlauskas, 46, of Portland, was sentenced to six months in prison, followed by six months of home detention and three years of supervised release. Jacob Shoop, 30, of Portland, was sentenced to six months of home detention and three years of supervised release.

Shoop’s father, Ricki Shoop, 58, of Portland was sentenced to two months of home detention and three years of supervised release; and his mother, Sherrie Inouye, 58, of Portland, was sentenced to three years of supervised release.

The court scheduled a restitution hearing for Oct. 10 to determine how much restitution each of the defendants owes to the victims.

“Mortgage fraud undermines our financial institutions and continues to be a burden on the economy,” Marshall said. “Brokers who abuse their authority and lie in order to help greedy investors cheat our financial institutions will go to prison.”

At the sentencing of Ovist, Brown stated, “The criminal conduct here is so epetitious and so serious that it requires a prison sentence.”

The court rejected the notion that a white-collar defendant with no criminal record should be sentenced to probation saying, “Somehow the notion is that prison isn’t going to happen. But it does.”

“We will relentlessly pursue those who engage in mortgage fraud and others who seek to undermine the integrity of our economy,” said Greg Fowler, special agent in charge of the FBI in Oregon — his agency investigated the case.

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