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4 men indicted in multi-million dollar mortgage fraud scheme

May 23, 2018 12:11 PM

A federal grand jury returned a 62-count indictment against four men involved in a multi-million dollar mortgage scheme.

The indictment charged Frank Giacobbe, 43, of East Amherst, Patrick Ogiony, 34, of Buffalo, Kevin Morgan, 42, of Pittsford, and Todd Morgan, 29, of Rochester, with conspiracy to commit wire fraud and bank fraud, and substantive wire fraud and bank fraud.

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Federal investigators are set to hold a press conference at 11:15 a.m. Wednesday in Buffalo to talk about how they believe these businessmen deceived lenders for years to pull in nearly $170 million worth of loans.

Some of the defendants will be arraigned in federal court Wednesday afternoon.

According to the indictment, between March 2011 and June 2017, the men conspired to defraud financial institutions such as Arbor Commercial Mortgage and Berkadia Commercial Mortgage, and government-sponsored enterprises, including Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal National Mortgage Association (Fannie Mae). 

Federal investigators said this case covers seven properties in Syracuse, Buffalo, Pittsburgh, and Avon.

The four men are accused of committing the following crimes:

  • Conspiring to provide lending institutions with false rent rolls suggesting that properties had more occupied units, at higher rental rates, and generated more income than they did.
  • Conspiring to provide false information about other income received at the complexes. 
  • Conspiring to provide lenders with fraudulently altered leases 
  • Conspiring to prevent inspectors touring the properties from discovering vacant units by, among other things, turning on radios inside vacant units, placing mats and shoes outside apartment doors, and, on at least one occasion, hiring someone to stage an apartment as lived in and pretend to be a tenant of an inspected unit.

If convicted, there is a maximum penalty of 30 years in prison with a $1 million fine. 

The Director of Communications and Special Events James Smith issued the following statement on behalf of the City of Rochester: 

“The City of Rochester is paying careful attention to any ramifications today’s indictments may have related to ongoing projects and investments in our city.  Morgan companies are an important corporate citizen and they provide jobs and livelihoods to many of our neighbors.  We believe everyone deserves the right, afforded them by the US Constitution, of presumed innocence until proven guilty and this case certainly is no different.  And while we do not prematurely rush to judgment, we will nonetheless continue to exercise all necessary due diligence to protect our community’s taxpayers, just as we have in the past.” 

WHECTV

Copyright 2018 - WHEC-TV, LLC A Hubbard Broadcasting Company

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