Frank Garcia, 51, Florida, pleaded guilty before U.S. District Court Judge Richard J. Arcara to fraud affecting a financial institution. The charge carries a maximum penalty of 30 years in prison, a fine of $1,000,000, or both.
The defendant is the former owner of Federal Guaranty Mortgage Company in the state of Florida. Garcia recruited straw buyers to obtain mortgages from M&T Bank and other financial institutions then misrepresented their assets and liabilities, failed to record the liens on the properties in the county clerk’s office, and failed to pay off pre-existing liens on the properties when they were transferred from one owner to another.
Furthermore, the defendant directed employees of Federal Guaranty Mortgage Company to prepare loan packages for borrowers. The employees were then directed to sign the documents acting as the loan officer. The loan documents were then sent to the investor financial institutions, including M&T Bank. The loan proceeds for the fraudulent loans were subsequently wired into the account of a company associated with Federal Guaranty Mortgage Company. As a result of the defendant’s actions, M&T Bank suffered a loss of $4,407,515.48 and the total loss to all financial institutions affected by the fraudulent scheme was approximately $24,000,000.
The United States Attorney’s Office for the Western District of New York announced the guilty plea.
Assistant U.S. Attorney Trini E. Ross is handling the case.
The plea is the culmination of an investigation on the part of special agents of the Agency Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.
Sentencing is scheduled for August 15, 2013, at 1:00 p.m. before Judge Arcara.