Guilty Plea In Mortgage Backed Security Scam

admin —  January 29, 2009 — 2 Comments

Mark Turkcan, 53, Kirkwood, Missouri, appeared before United States District Judge Donald J. Stohr and pled guilty to one felony count of misapplication of bank money by a bank officer. Specifically, Turkcan pled guilty to the misapplication of funds connected with his position at First Bank Mortgage, causing a loss of $35 million.

According to the Indictment, the losses began as early as 1987 when Turkcan was employed by Sheahan Financial, which, along with Clayton Savings and Loan, was purchased by First Bank. The substantial losses that Turkcan incurred at Sheahan were from on hedge positions taken on behalf of Sheahan, and were concealed at Sheahan. In 1990, First Bank purchased Clayton Savings and Loan and Sheahan Financial without knowing about the losses concealed on the books of Sheahan Financial, causing First Bank to overpay in the purchase. After the purchase of Sheahan in 1990, Turkcan became President of First Bank Mortgage. He continued to buy and sell mortgage backed securities as part of his job. However, losses from the unauthorized and unapproved borrowings continued ultimately rising to a level of approximately $35 million. They were covered up and concealed from First Bank by destroying or changing records and posting profits on the books and records of the Bank. To cover the losses, Turkcan borrowed against the mortgage backed securities of First Bank Mortgage. These loans were also concealed from First Bank. To conceal the true nature of these transactions, Turkcan created false and fictitious trade tickets and Bear Stearns confirmations. Ultimately these losses rose to a level of approximately $35 million, which First Bank had to pay Bear Stearns.

Turkcan now faces a maximum penalty of 30 years in prison and/or fines up to $1 million, when he is sentenced on April 17, 2009. Restitution is mandatory.

United States Attorney Catherine L. Hanaway commended the First Bank’s officers and employees for bringing this information to the U.S. Attorney’s Office, and the Federal Bureau of Investigation for their expeditious investigation of this case. First Assistant Michael W. Reap is handling the case for the U.S. Attorney’s Office.

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2 responses to Guilty Plea In Mortgage Backed Security Scam

  1. Everyone had to realize that since so many were taking on so much debt we were tittering on the brink of a disastor. When I purchased my home my broker told me that I was not making a smart move in getting a house that I qualified for. But I questioned how I would make the payment so I went with a cheaper one instead.

  2. We all have to take some responsibility for the current crisis. Those of us that have been in the industry for a long time knew instinctively money was fast and cheap. Great blog and great daily info. Please consider a link to my blog nd allowing me to link to yours..

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