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Developer Robert Morgan hit with fraud charges


Real estate developer Robert Morgan, who has been involved with many recent high-profile development projects in downtown Rochester and in multiple projects in the suburbs, faces dozens of federal charges for his alleged role in what the US Attorney's Office says was a half-billion-dollar mortgage fraud scheme.

Morgan, who was CEO of Morgan Management, is one of four people charged in a 114-count indictment handed up by a federal grand jury; he pleaded not guilty during his arraignment earlier today in US District Court.

Also charged in the indictment are:
  • Frank Giacobbe, who owned and operated Aurora Capital Advisors, a firm that worked with Morgan Management to broker some of the allegedly fraudulent loans;
  • Todd Morgan, a project manager at Morgan Management;
  • Michael Tremiti, who was director of finance for Morgan Management.

The indictment alleges that from 2007 to January 2019, the four defendants provided banks, financial institutions, and insurers with false information about income and expenses for more than two dozen Morgan Management apartment complexes. That information, in turn, allowed the company to secure more financing for various properties than it would have using truthful information, says the indictment.

Among the information the defendants are accused of falsifying: property purchase prices, income, expenses, occupancy, debts, and construction costs.

None of the properties listed in the indictment are in the City of Rochester, though one is in Perinton, one is in Webster, one is in Penfield, and one is in Chili.

Mayor Lovely Warren's chief of staff, Alex Yudelson, said this afternoon that the city has "a few" outstanding loans with Morgan but that he is current on all of them. The city has not been served with any subpoenas, Yudelson said, and city officials have not had any conversations with investigators.

City Communications Director Justin Roj said in a statement this afternoon that the city "is of course concerned regarding the ongoing projects related to Mr. Morgan, and will continue to make sure he meets his obligations to our taxpayers." But, he added, city officials will work with business leaders "to ensure that our City’s tremendous progress continues."

A press release from the US Attorney's Office for the Western District of New York says the alleged mortgage fraud scheme cost financial institutions and "government-sponsored entities" in excess of $25 million. Some of the mortgages in question were backed by Fannie Mae and Freddie Mac, which are both federal lending organizations.

The press release says the charges have a maximum penalty of 30 years in prison and could result in a fine of double the amount of loss caused by the alleged crimes.

The insurance fraud scheme caused $3 million in losses, the US Attorney's Office alleges.

The indictment, which lays out the charges and the alleged scheme in detail, follows.
See related PDF Filed._Superseding_Indictment._18cr108._2019.05.21.pdf