Former President of First Bank Mortgage Indicted
on Multiple Fraud Charges Causing a Loss of $35 Million
ST. LOUIS – Mark Turkcan, of Kirkwood,
Mo., was charged in an 11 count indictment alleging
fraudulent activities connected with his position at
First Bank Mortgage, causing a loss of $35 million
to a St. Louis bank, U.S. Attorney Catherine L. Hanaway
of the Eastern District of Missouri and John Gillies,
Special Agent in Charge for the FBI in St. Louis announced
today.
According to the indictment, the losses began as early
as 1987 when Turkcan, 55, 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 abut the losses
concealed on the books of Sheahan, 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 and ultimately
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 false and fictitious trade tickets
and Bear Stearns confirmations.
The indictment alleges that ultimately these losses
rose to a level of approximately $35 million, which
First Bank had to pay Bear Stearns.
Turkcan was indicted by a federal grand jury on eight
felony counts of wire fraud, one felony count of misapplication
of bank money, one felony count of making false bank
entries (counts 9 and 10); and one felony count of
causing the filing a false annual report (count 11).
If Turkcan is convicted, each wire fraud count carries
a maximum penalty of 30 years in prison and/or fines
up to $1 million; counts 9 and 10 each carry a maximum
of 30 years in prison and/or fines up to $1 million;
and count 11 carries a maximum of 20 years and/or fines
up to $5 million. Restitution is mandatory on all counts.
“The indictment alleges that Mark Turkcan, as
President of First Bank Mortgage, a division or wholly
owned subsidiary of First Bank, misapplied monies of
the Bank, which caused them to pay loans, interest,
commissions and other fees of more than $35 million
to Bear Stearns, due to concealment of unauthorized
and unapproved borrowings made on behalf of First Bank
Mortgage,” said U.S. Attorney Hanaway.
U.S. Attorney Hanaway commended the First Bank’s
officers and employees for bringing this information
to the U.S. Attorney’s Office, and the FBI for
their expeditious investigation of this case.
The case is being handled by First Assistant Michael
W. Reap of the U.S. Attorney’s Office for the
Eastern District of Missouri.
The charges set forth in an indictment are merely
accusations, and a defendant is presumed innocent until
and unless proven guilty.
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