Federal authorities on the mortgage fraud probe in Western NY: 'We are looking at everything'

May 23, 2018

U.S. Attorney James Kennedy Jr.
Credit Spectrum News

Federal authorities are speaking out about the 62-count indictment announced on Tuesday against four men in connection with that the U.S. Attorney’s office says was a multi-million-dollar mortgage fraud scheme.

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

Two of them, Todd Morgan and Kevin Morgan, are related to Rochester-area developer Robert Morgan, and they work for his company, Morgan Communities.

Todd is Robert Morgan’s son, and is a project manager at Morgan Communities,  and Kevin is Morgan’s nephew. He’s a vice president with the company.

Todd Morgan will be arraigned on Thursday, and Kevin Morgan next Tuesday, May 29.

During a news conference Wednesday in Buffalo, U.S. Attorney for Western New York James Kennedy Jr. was asked whether he expects other people to eventually be charged in this case.

“At this point, as I indicated earlier, our investigation is ongoing and we do intend to bring any individuals for whom we are able to establish sufficient evidence to return an indictment; we intend to fully prosecute all those individuals, so, the investigation is ongoing. (Reporter: “Does that mean Robert Morgan’s in play?”) "Everybody’s in play that may have been involved in fraudulent conduct.”

Robert Morgan was not named in this indictment. Recently, FBI agents searched his company’s offices in Pittsford.

Kennedy also told reporters that, “We are looking at everything, and these were properties that we identified and it’s where we started. We’re only really at the beginning of this investigation; in many regards, there’s much to be examined still.”

The indictment alleges fraud at seven apartment complexes that involved total loans issued of $167 million.

Kennedy said that, “Obviously this goes beyond just the $167 million involved. At this point, in these loans, our investigation is ongoing and we’ll continue to work until we are able to uncover and reveal all the fraud in this investigation, so our investigation continues.”

Gary Loeffert, the FBI Special Agent-in-Charge in Buffalo, made reference to the global financial crisis a decade ago, and he said a goal of this investigation is to keep a similar crisis from happening again.

Loeffert said that the indictment is aimed at protecting the tens of thousands of investors who own mortgage-backed securities. He said officials are focused on stopping people from undermining the residential and commercial financing industry.

Morgan Communities CEO Robert Morgan released this statement on Wednesday afternoon:

In light of recent events, Kevin Morgan and Todd Morgan have been suspended without pay from Morgan Communities, effective immediately. Morgan Communities continues to cooperate with a federal investigation related to federally backed loans placed to several developers through a specific mortgage broker.  We have been and continue to be current on all loan obligations.