Last time we checked in with former loan king Shawn Portmann, he was being slammed with a 30-count, federal indictment that accused him of bank embezzlement, money laundering, making false statements on loan applications and more. The subject of a 2011 SW cover story, this onetime "loan wolf," as we called him, pleaded not guilty in August of 2011.
Yesterday, Portmann changed his plea.
In the bubble years, Portmann headed the home-lending division of Tacoma-based Pierce Commercial Bank, which closed in 2010, thanks in large part to Portmann's conduct.. Churning out an astounding number of loans, he earned $1.7 million a year, drove fancy cars and maintained an imperious manner. "I own the bank," he would frequently say.
Illustration by the Little Friends of Printmaking
Accepting a plea bargain before U.S. District Court Judge Benjamin Settle yesterday, the 40-year old, dressed in a tan suit, presented a considerably more humble persona. Responding to the judge's questions about his frame of mind, he revealed that he has been going to a therapist for depression and anxiety. Asked what medication he was on, he said, "I can't say for certain," but added that he thought he was taking Prozac.
At other times, though, Portmann was very precise. He asked the judge to repeat his questions at time, paused to consider whether he was agreeing to the facts described in the plea agreement and corrected a minor point relating to when he hired an assistant.
In the end, he pleaded guilty to just two counts: submitting false statements in loan applications, and conspiracy to do so. He thereby essentially admitted to making a bunch of stuff up on loan applications, and backing up his lies with phony documents. He gave unemployed borrowers fake jobs, created imaginary rental histories, and submitted copies of cashiers' checks purporting to show that borrowers' debts were paid when in fact the checks were never delivered.
He was, in other words, a case study in the reasons behind the mortgage crash. The plea agreement cites only one Portmann mortgage that resulted in default, but a previous statement claimed there were at least 100 such ruinous loans.
Portmann and prosecutors have agreed to jointly recommend a prison sentence of between 10 and 14 years, rather than the 50 plus years he could have faced had he been found guilty at a trial. Settle scheduled his sentencing for January 28, and allowed Portmann to remain out on bail in the mean time.
An unusual aspect of this plea agreement, though, is that it is dependent on plea agreements of three other former Pierce Commercial officials: vice-president Sonja Lightfoot, who sold Portmann's loans to secondary lenders; Portmann's primary underwriter Jeanette Salsi; and loan processor Adam Voelker. Should any of the three back out of their agreements, Portmann is back to looking at 30 counts.
Find Portmann's plea agreement on the following page.