WATERTOWN — The principal developer of the Autumn Ridge townhouse complex in the town of Watertown was indicted Wednesday on federal charges alleging bank and wire fraud, money laundering and conspiracy.
Robert C. Morgan, 62, founder and CEO of Morgan Management, was indicted in U.S. District Court, Buffalo, along with his son Todd Morgan, real estate broker Frank Giacobbe and Frank Tremiti, a former director of finance at Morgan Management. Two other people, Mr. Morgan’s nephew Kevin Morgan and Morgan Management’s former Chief Operating Officer Scott Creswell, have previously pleaded guilty to federal charges in connection with the company’s activities.
There are no allegations of wrongdoing in connection with the Watertown project contained in the indictments handed up Wednesday. However, prosecutors are seeking the forfeiture of $237 million from Morgan Management in connection with multiple other projects, primarily in Western New York. Liens have been imposed to secure those properties, although the indictment makes no mention of any liens being placed on Autumn Ridge, a 394-unit townhouse project on County Route 202.
The 57-page indictment alleges that the company defrauded financial institutions by providing false and inflated financial information to secure mortgages for projects.
In a separate action brought Wednesday, the U.S. Securities and Exchange Commission alleges that Mr. Morgan and two of his companies “operated in a Ponzi scheme-like manner” by using investor funds to make interest and principal redemption payments back to prior investors and to cover up other mortgage fraud-related conduct. The SEC’s complaint claims that investors are owed $63 million, although the company has insufficient assets to repay the investments. The SEC has moved to freeze all of Mr. Morgan’s assets while its action is pending.
Morgan Management had planned to construct an additional 359-unit townhouse project across the road from Autumn Ridge on County Route 202, but the project never materialized after enough rental housing was built in the region for returning Fort Drum soldiers. A company owned by Mr. Morgan also owns 217 Arsenal St., site of a former tire store that was at one time a city fire station. Another Morgan company owns a retail plaza at County Route 202 and Route 3.