Bank President Lost Millions, Feds Say

ST. LOUIS (CN) - The former president of First Bank Mortgage faces federal fraud charges accusing him of causing a local bank to lose $35 million. Mark Turkcan, 55, began losing money on investments, and concealing it, more than 20 years ago, prosecutors say.

The losses began in 1987, when Turkcan worked for Sheahan Financial, which was purchased by First Bank, prosecutors say. Turkcan allegedly lost money on hedge positions and concealed them. First Bank bought Sheahan Financial in 1990 without knowing about the concealed losses, according to the indictment. Turkcan became President of First Bank Mortgage in 1990 and continued to buy and sell mortgage backed securities as part of his job.

Losses from unauthorized and unapproved borrowings ultimately totaled $35 million, but they were concealed from First Bank by destroying or changing records and posting profits on the books and records of the bank, prosecutors say. To cover the losses, Turkcan allegedly borrowed against the mortgage-backed securities of First Bank Mortgage, creating false trade tickets and Bear Stearns confirmations to conceal the transactions.

Turkcan is charged with eight counts of wire fraud, one count of misapplication of bank money, one count of making false bank entries and one count of filing a false annual report - all felonies.

If convicted, each charge of wire fraud, misapplication of bank money and making false bank entries carries up to 30 years in prison and $1 million in fines. The charge of filing a false annual report carries up to 20 years in prison and $5 million in fines. Restitution is mandatory on all counts.

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