Major WNY property owner charged in alleged mortgage fraud scheme
The owner of thousands of apartments across Western New York has been indicted in a major fraud scheme. U.S. Attorney James Kennedy says Morgan Management CEO Robert Morgan of Rochester is charged with conspiracy to commit wire fraud and bank fraud in a half-billion dollar mortgage fraud scheme. Morgan's son Todd, company finance director Michael Tremiti, and Frank Giacobbe, the owner of Aurora Capital Advisers of Buffalo, were also charged.
Robert and Todd Morgan are also charged with conspiracy to defraud insurance companies out of about $3 million.
In a press conference Wednesday, Kennedy said the defendants overstated the income of Morgan Management to financial institutions and obtained loans by providing those institutions with false information.
"The false information that the provided induced these financial institutions to do one of two things: either issues loans that they would not have otherwise issued in the first place or, secondly, to authorize loan amounts greater than the financial institutions would have otherwise authorized had they been provided with truthful information," Kennedy said.
Kennedy says at this point, the financial institutions' total loss is believed to be over $25 million.
The four men pleaded not guilty in federal court in Buffalo and were released on bail. If convicted, they face up to 30 years in prison.