Three Idaho Residents Sentenced For Bank Fraud

Three defendants have been sentenced for their involvement in a straw borrower fraud scheme to obtain residential construction loans, defrauding Zions Bank of $20 million. Christopher A. Upchurch, a building contractor from Meridian, Idaho, was sentenced to 33 months in prison, followed by five years of supervised release and ordered to pay $633,634 in restitution to Zions Bank. Barbara L. Cobos, a Zions Bank loan officer from Mountain Home, Idaho, who received $125,000 in kickbacks from Upchurch in order to assure funding of fraudulent loan applications, was sentenced to 18 months in prison, followed by five years of supervised release and ordered to pay $125,000 in restitution. Nicholas R. Gossi of Boise, Idaho, who worked first for a bank and later as a mortgage broker, pleaded guilty to submitting a false loan application to a mortgage lender and was sentenced to six months in prison, followed by six months of home detention and five years of supervised release and to pay restitution to National City Bank in an amount to be determined later. The scheme began in October 2004 and lasted until November 2005. Once straw buyers were located, their information was used as the borrowers' on residential construction loan applications. In many cases, the loan applications overstated the "borrower's" income and credit and falsely said that they were planning to build "owner-occupied" homes. Upchurch and others also forged the borrowers' names on loan documents. The applications were not reviewed or approved by supervisory officials at Zions Bank. Once the fraudulent loans were approved, Upchurch had the straw borrowers sign blank draw requests so he could draw on the loans at any time. He then filled out the draw requests for specific construction purposes, but diverted many of the loan proceeds for his own benefit. The bank did not return a call for comment.