NEW INFO: U.S. Attorney James Kennedy held a news conference Wednesday to release more information regarding the fraud investigation.
The defendants are accused of deceiving mortgage appraisers about the value of Morgan-owned apartment complexes in Western and Central New York, and Pennsylvania.
FBI Special Agent in Charge Gary Loeffert likens the deception that overvalued the properties to the deception that led to the financial crisis in 2008.
Kennedy says the investigation is far from over, and he isn't ruling out charges against others -- including, possibly, Robert Morgan himself.
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ORIGINAL STORY: Four men, including two employees of developer Bob Morgan, have been indicted by a federal grand jury. Kevin Morgan, Robert Morgan's nephew, and Todd Morgan, Robert Morgan's son, as well as Frank Giaccobe and Patrick Ogiony are facing a number of charges including conspiracy to commit wire fraud and bank fraud. They are expected to be arraigned Wednesday. Federal prosecutors allege the men attempted to defraud a number of financial institutions. Investigators said they tried to obtain inflated loans for residential complexes. The four are accused of conspiring to lend false rent rolls to lenders, making it appear their properties had a greater number of occupied units than they actually did, at higher rental rates. They are also accused of providing fraudulently altered leases and giving false information about other income they received from the complexes. Prosecutors said they also conspired to keep inspectors from discovering vacant units by turning on radios inside apartments or placing shoes and mats outside doors to make it appear they were occupied. In at least one case, according to prosecutors, someone was hired to act as if they were a tenant in a vacant apartment. In all, federal prosecutors say more than $167 million in loans were issued for seven different properties. Prosecutors stress that not all the defendants are tied to all seven properties. The properties include addresses in Buffalo, Syracuse, Avon and Pittsburgh. If found guilty of the charges they are facing, the defendants could face a maximum penalty of 30 years in prison and a possible $1 million fine.