Department of Financial Institutions

 

Contacts:

Deborah Bortner, Director Of Securities

Ph: 360-902-8797, dbortner@dfi.wa.gov

Scott Kinney, Communications Director

Ph 360-902-0517, skinney@dfi.wa.gov

For immediate Release:

Spokane mortgage & Appraisal fraud case concludes

OLYMPIA, WA - Spokane based Century Mortgage, Inc. (Century) and its two primary owners, Ronald Burger and Dale Sage Gibbons, have agreed to a 25-year license revocation and ban from the mortgage industry in settlements with the Washington State Department of Financial Institutions (DFI). The owners also agreed to pay restitution to five victims, and reimburse DFI for the cost of the investigation. Another owner and seven loan officers agreed to settlements that included bans from the industry for up to 20 years in addition to fines.

“Century Mortgage created a scheme to sell low value homes in the Spokane area for dramatically inflated prices,” stated Chuck Cross, Acting Division Director and Enforcement Chief. “Not only were consumers harmed in these transactions, but lenders were duped into making large loans on the properties through the use of fraudulent appraisals and phantom second mortgages.”

Following a two-year investigation, DFI filed charges against the defendants in August 2002 for mortgage and appraisal fraud, with an administrative hearing set for early this month. Settlements with the defendants avoided a lengthy trial, however a separate case with criminal charges is still pending. The Department has worked closely with the FBI and will continue to assist them with investigative and analytical support.

“The process of applying for a home loan can be complicated,” stated Helen Howell, Director of DFI. “When bad actors add to the confusion by creating schemes to take advantage of the public, state regulators must stop them from polluting the marketplace, and driving down the value of homes in the community,” said Howell. “This enforcement action should send a message to the mortgage industry that fraud and consumer abuse will not be tolerated in Washington State.”

Settlement agreements with the individual defendants included the following:

Banned from working in the mortgage industry for 25 years

Costs: $17,685.00

Restitution to victims: $14,589.66

Banned from working in the mortgage industry for 25 years

Costs: $17,685.00

Restitution to victims: $14,589.66

Banned from working in the mortgage industry for 20 years

Banned from working in the mortgage industry for 20 years

Banned from working in the mortgage industry for 10 years

Fine: $1,000

Banned from working in the mortgage industry for 15 years

Banned from working in the mortgage industry for 15 years

Suspended ban from working in the mortgage industry for 8 years

Fine: $7,500

Suspended ban from working in the mortgage industry for 8 years

Fine: $5,000

Suspended ban from working in the mortgage industry for 8 years

Fine: $5,000

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