Former First Bank Mortgage Pres Pleads Guilty to Scam

Mark Turkcan of Kirkwood, Missouri, pleaded guilty before U.S. District Judge Donald J. Stohr to the misapplication of funds connected with his position at First Bank Mortgage, causing a loss of $35 million. According to Catherine L. Hanaway, U.S. attorney for the Eastern District of Missouri, the losses began as early as 1987 when Turkcan was employed by Sheahan Financial. In 1990, First Bank purchased 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, where he continued to buy and sell mortgage-backed securities as part of his job. However, losses from the unauthorized and unapproved borrowings rose to 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 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. Sentencing is scheduled for Apr. 17, 2009. "It was strictly a solo operation," said Michael Reap, first assistant U.S. attorney, who is prosecuting the case. Mr. Reap added that Turkcan was immediately terminated when bank officials interviewed him about this matter.