Two Florida Men Sentenced for Roles in Mortgage Fraud Scheme

Two Florida men have been sentenced for their roles in a mortgage fraud scheme that resulted in about $24 million of losses for several financial institutions, including M&T Bank in Buffalo, N.Y.

Frank Garcia, 54, on Monday was sentenced by a federal judge in New York State to 87 months in prison, and was ordered to pay $10.6 million in restitution, including $2.5 million to the $97 billion-asset M&T Bank.

On Friday, Ignacio Huergo, 44, of Miami was sentenced to two years of probation and was ordered to pay $736,000 in restitution to M&T Bank. Huergo's probation sentence will include six months of home confinement.

Garcia was the owner of Federal Mortgage Guaranty Co., a company used to recruit "straw buyers" to obtain mortgages from M&T Bank and other institutions. Garcia misrepresented buyers' assets and liabilities, failed to record the liens on the properties and failed to pay off pre-existing liens on the properties. He also forged loan documents.

Huergo, who worked as a bookkeeper and tax preparer for Federal Mortgage Guaranty, became aware of the mortgage fraud being conducted at the company and knew that its owner had manipulated financial statements. Huergo was convicted for failing to notify authorities of the fraud.