A nephew of developer Robert Morgan pleaded guilty Friday in federal court to conspiracy to commit bank fraud.
According to U.S. Attorney James P. Kennedy Jr.’s office, Kevin Morgan, 42, of Pittsford, appeared before U.S. District Judge Elizabeth A. Wolford and pleaded guilty to the charge, which carries a maximum penalty of five years in prison and a fine of $250,000.
Assistant U.S. Attorneys John D. Fabian and Douglas A.C. Penrose, who are handling the case, said in a statement that between March 2011 and June 2017, Kevin Morgan and his co-defendants conspired to defraud financial institutions.
The co-defendants include Todd Morgan, Frank Giacobbe and Patrick Ogiony; charges are pending against them.
Robert Morgan has not been charged.
Kevin Morgan was a vice president at Morgan Management LLC, a real estate management company. Todd Morgan also worked at Morgan Management as a project manager.
Kevin and Todd Morgan worked with Frank Giacobbe, who owned and operated Aurora Capital Advisors LLC, a mortgage brokerage company, and Patrick Ogiony, an Aurora employee, to secure financing for properties managed by Morgan Management or certain principals of Morgan Management.
According to the U.S. Attorney’s office, Kevin Morgan “provided false information to financial institutions and government-sponsored enterprises that overstated incomes of properties managed by Morgan Management or certain principals of Morgan Management.”
This led to the financial institutions issuing loans for larger amounts than they would have if they had truthful information, federal prosecutors said.
The false information provided included property occupancy, false rent rolls and income statements for properties.
“History has shown us the havoc that can be wrought when fraud takes place in the mortgage industry,” Kennedy said in a statement. “This investigation, and today’s plea, protect that industry from fraud and those who invest in securities which are backed by mortgages.”
Sentencing will be scheduled at a later date before Judge Wolford.