One of Rochester New York's top developers, Robert "Bob" Morgan, is being accused of yet another mortgage fraud scheme together with three others working for him.
After nearly five months since a federal judge dismissed the first mortgage fraud charges against Morgan and three co-defendants, namely Todd Morgan, Frank Giacobbe, and Michael Tremiti, the four of them are once again facing crimes and allegations of sweeping mortgage fund.
All accused were related to Bob Morgan, starting with his son, Todd, who acts as the project manager in his father's commercial and real estate enterprises. The indictment stated that mortgage broker Frank Giacobbe allegedly defrauded banks while working for Morgan's company, and the same goes for Morgan's former company finance director Michael Tremiti.
All four of them faced arraignment on Thursday before a federal magistrate via virtual hearing.
Mortgage Fraud Scheme
The unsealed indictment contains criminal allegations similar to the one dismissed by U.S. District Judge Elizabeth Wolford last year. The former charge included 114 criminal counts, while the latest involves 104.
According to the prosecutor, the men accused allegedly conspired to obtain funds from financial institutions and government-sponsored enterprises fraudulently. The wide-range fraud scheme is said to have taken place between 2007 to 2009 and the accused amassed more than $12 million.
Arbor Commercial Mortgage, LLC, Berkadia Commercial Mortgage, LLC, UBS, and Deutsche Bank were the financial institution involved. Simultaneously, the government-sponsored enterprises also include Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).
Based on the legal documents, Morgan and his business development partners provided false information to lenders to carry out mortgage loan applications. They also submitted inflated and false rent rolls. The four allegedly provide non-existent tenants and inflated rents to increase income for building and get loans they would not qualify for.
The prosecutor claims that the financial institutions and government-sponsored enterprises loss over $12 million in twelve years.
Bob Morgan and his fellow accused pleaded not guilty in the arraignment before U.S. Magistrate Kenneth Schroeder Jr.
In a statement, Morgan's lawyers said that the famous developer would continue to defend himself against the baseless accusations.
"As he has since May 2019, Mr. Morgan will continue to vigorously defend himself and remains confident that the truth will once again prevail in court against the government's meritless allegations and improper tactics in its investigation and prosecution," lawyers Joel M. Cohen and Lee Dunst said in a statement released to the press.
First Mortgage Fraud Accusation
U.S. District Judge Elizabeth Wolford's ruling last year stated that the federal prosecutor delayed submitting evidence to lawyers in the case, therefore denying Morgan the right to a speedy trial.
However, Wolford opened the possibility for a new indictment, resulting in a recent case from U.S. attorneys.
"Upon executing search warrants in this case, my office, together with our law enforcement partners, acted quickly to take action in an effort to try to limit the amount of damage occasioned by the defendants' alleged widespread fraud," United States Attorney James P. Kennedy Jr. said in a statement.
"While that effort succeeded in that objective, the unfortunate truth is that the swiftness with which we moved may have also contributed to the reasons for which the original indictment, in this case, was dismissed by the Court. In the end, however, this new indictment now ensures that the defendants will be held to answer for the serious crimes alleged therein," he added.
