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33 °F Forecast | Road Cams Sunday, February 6, 2005 Today's News | Classifieds | Autos | Homes | Jobs | Tempo | Health | Community | Home Delivery SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics Tempo AP News Weather Classified Archives Site Map SPECIAL SECTIONS Since We Asked Outdoor Journal Menu Guide How To Guide Wellness Connection Readers' Choice Real Estate Showcase Real Estate Guide Joy Magazine Homelife Magazine Wedding Guide Passport to the Rogue Valley EXTRA Newspaper in Education Personals Movie Times TV Times E The People Volunteer Opportunities Moving to Southern Oregon? MARKETPLACE Find a Car Find a Home Find a Job Classifieds Place an ad eSouthernOregon Automotive Communities Entertainment Publications Recreation Calendar CUSTOMER SERVICE Frequent Questions Advertising Information Home Delivery Employment Contact Us Media Kit Network Affiliate Oregon Road Conditions & Cams Email Story to a Friend December 1, 2004 Gotshalk sentence frustrates victims They secured loans for him and were left with debt and no payment By SARAH LEMON Mail Tribune Ashland mortgage broker Chris Thompson knew his friend’s assets weren’t all he claimed. But the $100,000 loan Thompson secured for Leonard Gotshalk was only for 30 days, and he trusted the Ashland businessman. Six years later, Thompson has yet to be repaid. And he’s angry that Gotshalk will spend only 20 days in jail after pleading no contest Tuesday in Jackson County Circuit Court to a charge of first-degree theft. "This deal leaves me and my family holding the bag," Thompson told Circuit Court Judge Ray White. As part of his plea negotiation, Gotshalk, 55, of the 1200 block of Butler Creek Road, agreed to pay $50,000 in restitution to Keith Smith, a Newport Beach, Calif., man who lent Gotshalk $100,000 through Thompson in 1998 to develop real estate. Advertisement Thompson said he placed a lien on his house based on Gotshalk’s financial statement claiming $7.4 million in assets when he owned little and owed creditors about $2 million. Restitution paid to Smith will reduce the lien, Thompson said. Thompson and Smith had planned to invest with Gotshalk in a Clackamas County subdivision. Gotshalk’s light sentence also angered Ashland broker Michael Remington, another victim. Both Remington and Thompson said they would rather have seen Gotshalk stand trial with the possibility of going to prison. Remington said he prevailed over Gotshalk in a civil suit over another matter but has yet to receive a penny in payment. He lost $150,000 in a February 1996 land deal with Gotshalk that turned sour, investigators said. It’s not the first time Gotshalk has knowingly taken out loans with no intention of paying them back, said Ashland police Detective Brent Jensen. The investigator said he interviewed a dozen people in other states who said Gotshalk defrauded them. Gotshalk’s development deals left a trail of lawsuits in California and one fraud conviction, Jensen said. "Not only did he falsify his financial statement, but he forgot to mention all these civil judgments," Jensen said. In Jackson County alone, Gotshalk has been the defendant in more than 30 civil cases, including small claims, money actions and foreclosures. Plaintiffs in those suits — dating to 1994 — asked the court for more than $180,000 in damages. Gotshalk’s history of intentionally defaulting on loans supported charges of racketeering initially filed in the case, Jensen said. Prosecutor Matt Chancellor dismissed four of the serious felonies and an additional charge of first-degree aggravated theft in exchange for Gotshalk’s plea. Securing a large restitution figure up front played a role in the decision to reduce Gotshalk’s charges, Chancellor said. The victims’ debts have grown beyond the original loan, but Oregon law prevents prosecutors from collecting interest, he said. Gotshalk’s attorney, Ron Hoevet, blamed Thompson for eating away at bankruptcy judgments against his client by filing frivolous motions. A federal judge awarded Smith $36,000, but the amount could have been much more, Hoevet said. Thompson isn’t really a victim, the Portland attorney added, because he knew Gotshalk’s financial statement was false but went ahead with the loan. Thompson said his business specializes in clients who may have black marks against their credit score but otherwise have equity. Had he known about Gotshalk’s debt with private parties — which didn’t show up on a credit report — Thompson said he never would have considered granting Gotshalk a loan. "The whole thing was a total fraud," Thompson said. Thompson said he was pleased to see Gotshalk taken into custody Tuesday after White denied his request to report to jail in a week. The judge also ordered Gotshalk to pay a fine of $10,000, an unusually high figure in a criminal case. "I have learned a lesson," Gotshalk said after apologizing for taking up so much of the court’s time. "That has yet to be seen," White replied. Reach reporter Sarah Lemon at 776-4487, or e-mail [email protected] . Mail Tribune Home | Local News | Sports | Business | Obituaries | Life | Opinion AP News | Archives | Site Map | Community | Classified Copyright © 1997-2005 Mail Tribune. All rights reserved. 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