Florida Man Sentenced for $10.6M Mortgage Scam

By our Investigative Reporter

A Florida man has been sentenced to 87 months in prison for leading a massive mortgage scam that cost M&T Bank millions of dollars.

Frank Garcia, 54, was convicted of fraud affecting a financial institution and ordered to pay $10,609,903.92 in restitution, with approximately $2,500,000 going to M&T Bank.

Garcia, the former owner of Federal Guaranty Mortgage Company in Florida, recruited “straw buyers” to obtain mortgages from M&T Bank and other financial institutions. He then misrepresented their assets and liabilities, failed to record the liens on the properties in the county clerk’s office, and failed to pay off pre-existing liens on the properties when they were transferred from one owner to another.

Garcia also directed employees of Federal Guaranty Mortgage Company to prepare loan packages for borrowers, sign the documents as the loan officer, and send them to the investor financial institutions, including M&T Bank. The loan proceeds for the fraudulent loans were subsequently wired into the account of a company associated with Federal Guaranty Mortgage Company.

Ignacio Huergo, 44, an employee of Federal Guaranty Mortgage Company, was convicted of concealing massive financial institution fraud and sentenced to two years probation with six months to be served on home confinement. He was also ordered to pay $736,254.25 in restitution to M&T Bank.

The sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation.

U.S. Attorney William J. Hochul, Jr. announced Garcia’s sentence, while Assistant U.S. Attorney Trini E. Ross handled the case.

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