Developer Robert Morgan's nephew, Kevin Morgan, has pleaded guilty to federal fraud charges in federal court today. Morgan pleaded guilty to conspiracy to commit bank fraud, which carries a maximum penalty of five years in prison and a fine of $250,000. His defense attorney, Patrick Brown, says Morgan admitted that a crime took place.
Federal prosecutors say Kevin Morgan and others worked at his uncle's direction to inflate the apparent value of housing projects they owned in New York and Pennsylvania. Mortgages based on the overstated property values were then sold as securities by Fannie Mae and Freddie Mac.
The alleged fraud spanned several years.