Ex-First Bank Mortgage CEO Turkcan gets 1 year

Thursday, June 11, 2009
St. Louis Business Journal

Ex-First Bank Mortgage CEOTurkcan gets 1 year

Mark Turkcan, former president and chief executive of First Bank Mortgage whopleaded guilty to misapplying funds in a 21-year cover-up of a $5 million loss that snowballed into $35 million, was sentenced Thursday to one year and one day in prison.

Turkcan, 54, of Kirkwood, was also ordered to  pay $24.6 million in restitution.

Prosecutors had pushed for five to six-and-ahalf years of jail time, but defense attorneys Art Margulis and son Bill Margulis fought for less incarceration time.

The losses began as early as 1987 when Turkcan was employed by Sheahan Financial, according to court documents.

The losses that Turkcan incurred at Sheahan were from hedge positions taken on behalf of Sheahan, and were concealed at Sheahan.

In 1990, First Bank bought Clayton Savings and Loan and Sheahan Financial without knowing about the losses concealed on the books of Sheahan Financial, causing First Bank to overpay in the purchase. Turkcan became president of First Bank Mortgage, where he continued to buy and sell mortgage-backed securities as part of his job. Turkan concealed the losses from First Bank by destroying records and posting profits on the books, according to prosecutors.

To cover the losses, Turkcan borrowed against the mortgage-backed securities of First Bank Mortgage and concealed the transactions by creating fictitious trade tickets and Bear Stearns confirmations.

The losses ultimately rose to a about $35 million, which First Bank had to pay Bear Stearns, prosecutors said.