Morgan Communities project manager to be arraigned Thursday, VP next week
BUFFALO — The project manager and vice president of Morgan Communities, Rochester's biggest developer, are to be arraigned in federal court in connection with an alleged mortgage fraud scheme.
Todd Morgan, 29, of Rochester, the project manager, will be arraigned in federal court in Buffalo on Thursday, while vice president Kevin Morgan, 42, of Pittsford will be arraigned next week.
They're both accused of cooking the books and, in some cases, going to extreme measures to say how much money certain properties were bringing in, in order to secure loans for which they otherwise wouldn't have qualified for.
Federal prosecutors say with the help of two Buffalo-area mortgage brokers, Frank Giacobbe and Patrick Ogiony, they were able to lie to banks to secure $175 million in funding for a half-dozen developments in New York and in Pennsylvania.
"They would do things ... making vacant units look as though they were occupied by doing things like placing mats and shoes outside of the apartment, turning on radios ... turning on televisions in the apartment to make it appear as though they were actually occupied," said U.S. Attorney James Kennedy Jr.
A federal grand jury Tuesday returned a 62-count indictment against the two Morgans, Giacobbe and Ogiony.
The FBI has been investigating for years, but it was just last week that they raided Morgan Communities in Pittsford, on May 14.
Robert Morgan, the president of Morgan Communities and the uncle and father to the two indicted Morgans, has not been charged but the investigation is still ongoing.
When asked if he believes Robert Morgan knew what was happening in his company, Kennedy said, "I can't answer that question."
In a statement Wednesday afternoon, Bob Morgan said Kevin and Todd Morgan have been suspended without pay. The statement continues: "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."
Rochester's biggest developer, Morgan is involved in the Parcel 5 development plans in the city of Rochester. He is currently putting up the apartments near Dinosaur BBQ, and is behind Tower 280 at Midtown Plaza, just to name a few.
Morgan is connected with a number of projects in Canandaigua as well, including the major lakefront mixed-use development project Pinnacle North, the first phase of which is complete with a mix of occupied apartments and retail, and the second phase of which is underway. Also in Canandaigua, Morgan is involved with CenterPointe Apartments and Townhomes at 5570 Centerpointe Blvd; and The Links at CenterPointe Townhomes at 2227 Brickyard Road.
Asked for his advice to people who are in the middle of a deal with Morgan Communities, Kennedy said, "My advice to them would be to do their due diligence."