Ex-North Dakota bank prez and LO sentenced to prison for bank fraud

Brady Torgerson, former president of First Security Bank-West, was sentenced to two years in prison for two counts of bank fraud he conducted between 2019 and 2021 when working for the North Dakota-based bank and Union Bank as a loan officer. Three others were also sentenced in connection to the fraud.

When Torgerson was president of First Security Bank-West, he funded loans without obtaining necessary financial information, security interest documents or promissory notes, the U.S. Attorney’s Office for the North Dakota District said Thursday.

The 35-year old former executive also engaged in deceptive banking transactions by entering false information into the bank’s computer system, increasing loans so that they exceeded the original loan amounts and extending loan maturity dates to conceal his activities.

Most notably, while employed at the Union Bank as a mortgage loan originator, Torgerson created fraudulent loans of more than $450,000, according to U.S. Attorney Mac Schneider. About half of that amount was created under three separate individuals who neither knew about these loans nor received the funds described in these obligations. 

Torgerson pleaded guilty to two separate counts of bank fraud in August 2022 and was arrested in November for the offenses.  

“Bank fraud is a serious crime that harms the honest financial institutions we have in North Dakota,” Schneider said. “It is also a reminder that there is a high price to pay for white-collar crime.”

Brent Torgerson and Kelly Huffman were sentenced to time served (one day in custody), one-year of supervised release and a $5,000 fine on charges of misapplication of bank funds. Tyler Hofland received a sentence of time served (one day of processing), one-year of supervised release and $98,163 in restitution on a charge of aiding and abetting bank fraud. 

This case was investigated by the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG), the Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG) and the Federal Reserve Board-Office of Inspector General and prosecuted by Assistant U.S. Attorney Jonathan O’Konek.

Previous rulings when other mortgage lender executives were sentenced to prison for committing bank fraud include the case of Edward Bohm – former president of sales and co-owner of mortgage lender Vanguard Funding. Bohm was sentenced to two years in prison for pocketing more than $8.9 million from warehouse lenders. 

Bohm and two other former executives — Edward Sypher, Jr., Vanguard’s former senior vice president, and Matthew Voss, the firm’s former chief operating officer — used the funds to pay personal expenses and compensation and to pay off loans they previously obtained through false loan applications. 

Sypher and Voss were sentenced to 18 and 24 months in prison respectively in 2019 and were each ordered to pay $3.5 million in restitution following their conviction on conspiracy to commit wire and bank fraud charges.