May 16, 2018 07:51 AM
Federal documents obtained by News10NBC outline some of the reasons why the FBI is investigating Rochester’s biggest development company.
On Monday, agents executed a search warrant at Morgan Communities in Pittsford but wouldn't say what it was they were looking for, only that no arrests had been made.
A 90-page application for a search warrant filed in Buffalo late last week details what investigators may be looking for.
According to the documents, the FBI has probable cause to believe that Kevin and Todd Morgan, who are the Vice President and Project Manager respectively at Morgan Communities, may have committed wire and bank fraud.
According to the application, investigators suspect the pair conspired to provide false information to financial institutions, inflating property values and potentially qualifying for loans they shouldn't have.
Federal investigators also say the Morgans regularly used email to send false information to appraisers and banks for multi-family and commercial real estate projects.
The documents detail a situation in December of 2014 when in anticipation of attempting to close a loan for Deutsche Bank on a development called Rochester Village in Pennsylvania.
Kevin and Todd Morgan along with a man named Frank Giacobbe who is a mortgage broker stated that if the lender found out that project did not have certificates of occupancy for all floors despite Giacobbe stating the property was one-hundred percent leased, the lender would not close the loan.
Giacobbe stated, “I’ve tried everything so I suggest we jam it at the end and hope they don’t notice.”
A few days later, Deutsche Bank became aware of discrepancies in the rent roll according to the documents and pulled out of the deal.
So, the conspirators sought financing from Freddie Mac.
In January of 2015, according to the application, Kevin and Todd Morgan, during an inspection by Feddie Mac, turned on radios and placed mats and shoes outside the doors of unoccupied apartments to give the impression the building was fully occupied.
The FBI investigation also revealed, according to the documents, that the conspirators attempted to inflate the income at Rochester Village by reporting income charged to tenants for cable television when in fact, cable TV was included free in the rent.
Updated: May 16, 2018 07:51 AM
Created: May 15, 2018 06:05 PM
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