The son and nephew of Rochester area developer Robert Morgan have been among those indicted in what the U.S. Attorney’s office calls a ‘multi-million dollar mortgage fraud scheme.’
U.S. Attorney James Kennedy says that a federal grand jury has returned a 62 count indictment charging 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.
Todd is Robert Morgan’s son, and Kevin is his nephew.
Giacobbe owned Aurora Capital Advisors and Ogiony worked for him as Managing Director.
Kevin Morgan was a Vice President at Morgan Management and Todd Morgan was a project manager there.
Federal authorities alleged that between March 2011 and June 2017, the defendants conspired to defraud financial institutions. They are accused of using a variety of ways to induce mortgage lenders to issue loans for apartment complexes for greater amounts than the lenders would have issued loans for, had they known the truth.
Among the allegations from the government are that the defendants provided false information about how much income was generated by these properties and conspired to prevent inspectors touring the properties from discovering vacant units by doing things like turning on radios inside vacant apartments and placing mats and shoes outside apartment doors.
U.S. Attorney for Western NY James Kennedy, said that, “The defendants are charged with fraudulently obtaining over $167.5 million worth of loans relating to seven residential apartment complexes located here in New York and in Pennsylvania. Most of those loans were in turn sold to Fannie Mae or Freddie Mac, entities which were created by Congress to perform and an important role in our country’s housing finance system. As a result of the fraudulent conduct alleged in this indictment, defendants’ conduct not only unjustly enriched them but threatened to undercut the very foundations upon which our mortgage banking and investment systems are based.”
The indictment alleges fraud at seven different properties including Avon Commons in Avon, NY; Morgan Ellicott Apartments and Amherst Garden, which are both in Vuffalo; Rugby Square in Syracuse; and Rochester Village, Southpointe, and Eden Square, which are all in the Pittsburgh area.
Robert Morgan was not named in this indictment. Recently FBI agents searched his company’s offices in Pittsford, and afterward, he issued a statement saying that Morgan Communities continues to cooperate with a federal inquiry and continues to be current on all of its loan obligations.
Robert Morgan is a major developer in a number of Rochester area projects and residential communities.
There was no immediate response available from the defendants.
Here is a statement issued Tuesday night by City of Rochester Communications Director James Smith:
“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 judgement, we will nonetheless continue to exercise all necessary due diligence to protect our community’s taxpayers, just as we have in the past.”
Here is the full indictment: