Former bank officer to spend year in prison, pay $25 million restitution

Former president of First Bank Mortgage Mark Turkcan was sentenced to one year and one day in prison for the misapplication of $35 million. A federal judge also ordered him to pay restitution of nearly $25 million.

Turkcan, 54, pleaded guilty in January to one felony count of misrepresentation of bank money by a bank officer. Senior U.S. District Judge Donald J. Stohr, of the Eastern District of Missouri, sentenced Turkcan on Thursday.

First Bank Mortgage discovered in May 2008 that it owed Bear Stearns about $35 million under outstanding repurchase agreements that Turkcan engaged in. That was a month after the company fired Turkcan. Bill Margulis, of Margulis Grant & Margulis, said in February that his client was fired because the mortgage division wasn’t performing well due to the downturn in the economy.

A week after Turkcan pleaded guilty, the U.S. Securities and Exchange Commission filed a civil lawsuit against him. The SEC alleges Turkcan defrauded investors by scheming to misstate the net income of First Bank Mortgage and its parent company, First Banks Inc.

“The lawsuit basically contains most of the same allegations that the federal criminal charges contain,” Margulis said at the time. “Our intent is to resolve the SEC lawsuit through some sort of settlement agreement after we resolve the criminal case.”

To read earlier stories about Turkcan’s guilty plea and the SEC lawsuit, click here and here.