Ogiony enters guilty plea in Morgan fraud scheme
ROCHESTER – A Buffalo mortgage broker pleaded guilty Friday and agreed to cooperate with federal prosecutors in a case involving Morgan Management, a development firm that owns thousands of apartments and properties in Buffalo, other upstate cities and more than a dozen states.
Patrick Ogiony had been a principal at Aurora Capital Advisors LLC when he took part in schemes to make apartment complexes look more profitable than they really were so they could be refinanced for higher amounts. Mortgage brokers are paid based on a percentage of the mortgages they help arrange.
An indictment released in May alleged that four businessmen, Ogiony among them, inflated rent rolls and income statements and conspired to make vacant apartments look occupied by leaving shoes outside the doors, for example. The goal was to trick lenders into believing the complexes had more tenants than they actually did.
Ogiony, 35, pleaded guilty to one count of conspiracy to commit bank fraud. In doing so, he became the second defendant to plead guilty in
the case. Kevin Morgan, who had been a vice president of Morgan Management, pleaded guilty in December to the same charge. Morgan is a nephew of company founder Robert C. Morgan.
Like Kevin Morgan, Ogiony is now assisting prosecutors and agents with the investigation. The terms of his guilty plea require him to provide complete and truthful information about any mortgage fraud, bank fraud or wire fraud he knows about. Both men have been allowed to remain free.
In a deal much like the one Morgan worked out with the U.S. Attorney’s Office, Ogiony faces up to five years in prison and a $250,000 fine, but his prison time could be reduced to less than three years if prosecutors are pleased with his cooperation, according to details that U.S. District Court Judge Elizabeth A. Wolford read into the record.
While Robert Morgan has not been charged, Kevin Morgan said as he pleaded guilty that his illegal acts occurred “at the direction of my uncle.”
As he admitted guilt, Ogiony said he had been “instructed by my employer” at Aurora Capital Advisors to participate in efforts to make the apartment complexes look more profitable.
Ogiony’s employer was Frank Giacobbe, the owner and one of the remaining defendants in the case. Giacobbe has pleaded not guilty. The final remaining defendant is Todd Morgan, the son of Robert Morgan and a former Morgan Management executive.
Ogiony’s lawyer, Joseph LaTona of Buffalo, later refused to comment on whether Ogiony has information on Giacobbe, Robert Morgan or others. An attorney for Robert Morgan, John Speranza of Rochester, attended the hearing Friday. He, too, refused to comment for The Buffalo News.
The News began reporting in 2017 about the unusually high values on some mortgages offered to Morgan properties. The News revealed at the time that a federal investigation was underway.
The indictments announced 10 months ago rocked Morgan Management, which is transitioning into a successor company called Grand Atlas Property Management. Some assets have been sold. The sale of properties in Texas led to a lawsuit in which Herbert Morgan asserts that his brother, Robert, did not provide him with his share of the proceeds. Lawyers for Robert Morgan say in court papers that Herbert Morgan misunderstands the agreement between the two and that Robert Morgan has done nothing improper.
Meanwhile, some Morganowned complexes have gone onto watchlists for properties in danger of default. One lender, Steeprock Capital, is listed in court papers related to Ogiony’s plea as a victim of the fraud conspiracy. Steeprock wants to seize and sell three of the Morgan Management properties it helped finance, the Raintree Island apartment complex in the Town of Tonawanda and two complexes in Syracuse’s suburbs. Two Morgan-related entities have sued to block Steeprock’s action.