Sprague was sentenced to 46 months in prison and was ordered to pay $3.6 million in restitution.

Sprague, a former loan officer at West Coast Bank, falsified loan applications for individuals involved in DSD’s flipping scheme by fraudulently inflating their monthly income and falsely claiming that these homes were going to be the employees’ primary residence.

Sprague also knew the loan files contained forged or scanned signatures and other material misrepresentations and omissions. West Coast Bank approved and funded the loans based on the loan applications that Sprague falsified and on the other documents that Sprague submitted to the bank that he knew were false.

Little was sentenced to five years of probation with eight months in a halfway house for assisting participants in DSD’s flipping scheme obtain bad loans. He was also ordered to pay $191,171 in restitution.

Little, a former mortgage broker, knew DSD was seasoning participants’ bank accounts and submitted a false loan application and supporting documentation to obtain a loan for a participant of DSD’s flipping scheme.

Teresa Ausbrooks, 51, of Farmington, New Mexico, was sentenced to one year and one day in prison and was ordered to pay $184,839.66. Ausbrooks, a former escrow officer, participated in DSD’s flipping scheme and executed a similar, separate scheme. She lied on home loan applications about her income and omitted liabilities, including a side agreement with Fitzsimons.

Several other defendants involved in the DSD investigation have already been sentenced.

Del Barber, Jr., 44, of Spokane, Washington, and a former mortgage broker, was sentenced to 15 months in prison for creating and submitting fraudulent loan applications for participants of DSD’s flipping scheme. He was also ordered to pay $119,654 in restitution.

Robert Brink, 62, of Junction City, Oregon, a former bank building inspector for Umpqua Bank, was sentenced to 12 months and one day in prison and was ordered to pay $181,276 in restitution for submitting false inspection reports to Umpqua bank for two of DSD’s commercial projects.

Brink claimed construction had occurred, when, in reality no construction had occurred and Umpqua Bank had funded more than $700,000 in draw requests.

Michael Wilson, 61, of Merrells Inlet, South Carolina, a former DSD employee, was sentenced to five years of supervised release and community service for participating in DSD’s flipping scheme. He was also ordered to pay $303,114.95 in restitution.

Garret Towne, 34, of Eugene, a former DSD employee, and Barbara Hotchkiss, 44, of Redmond, a former loan processor at West Coast Bank, were sentenced to probation and community service in Deschutes County Court for their roles in the DSD residential flipping scheme. They were ordered to pay $202,415 and $303,069 in restitution, respectively.

Kevin Mandlin, 50, of Bend, was sentenced to one year of probation for submitting a false document to a bank on behalf of DSD for Egeland’s home in Powell Butte.

John Partin, a building material supplier in Bend, is scheduled to be sentenced for his role in the fraud on March 12, 2014.

“This bold fraud scheme was born out of the housing bubble long ago, but its effects will be felt by the construction and banking businesses in Central Oregon for many years to come,” said Kevin Rickett, Acting Special Agent in Charge of the FBI in Oregon.

“It’s a scam that involved losses in the tens of millions of dollars as the defendants pursued lavish lifestyles. Major mortgage fraud cases such as this one are and will continue to be a high priority for the FBI.”

"Mortgage fraud weakens the economic integrity of our communities and our nation, and more significantly, hurts a broad range of people,” said Teri L. Alexander, Acting Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest.

“Criminals who try to line their own pockets through fraudulent schemes should see the prison sentences handed down in this case as proof that the harm mortgage fraud inflicts on our communities will not go unpunished. I am pleased that the IRS was part of the law-enforcement team that worked to dismantle this criminal enterprise and help bring fraudsters to justice.”

These cases were investigated by the FBI, the IRS, and the Oregon Division of Finance and Corporate Securities and are being prosecuted by Assistant U.S. Attorney Scott E. Bradford.