Rochester developer Robert C. Morgan is facing criminal charges and a separate federal lawsuit accusing him of mortgage, insurance and securities fraud.
Now, an attempt by the Securities and Exchange Commission to freeze Morgan's assets has made it difficult for him to retain a defense team, attorney Joel M. Cohen told a federal magistrate on Wednesday.
Morgan, founder and CEO of Morgan Communities, was indicted last week following an investigation by the FBI and U.S. Attorney's Office in Buffalo. He – along with his son, Todd; his finance chief, Michael Tremiti; and a Buffalo mortgage broker, Frank Giacobbe – were accused of falsifying documents and lying to lenders about the income and value of properties in order to obtain larger mortgages than were justified. All four pleaded not guilty.
Cohen, from New York City law firm Gibson Dunn & Crutcher LLP, appeared on Morgan's behalf at his arraignment last week in Buffalo and again a scheduling hearing on Wednesday. He replaced Morgan's previous attorney, Rochester's John F. Speranza.
Both times, however, Cohen – a veteran trial lawyer and former federal prosecutor who chairs the law firm's white-collar defense and investigations group – told the judge that he was only "provisionally representing" Morgan, and hadn't yet been formally hired.
On Wednesday, Cohen explained why: because the SEC has sought an emergency court order freezing Morgan's assets to protect investors. Another federal judge in Buffalo, Elizabeth A. Wolford, is slated to hear oral arguments on the SEC's request for a preliminary injunction on June 5.
"The motion is going to have a profound impact on any counsel coming in," Cohen told U.S. Magistrate Judge H. Kenneth Schroeder on Wednesday. That prompted Schroeder to set a June 10 deadline for Morgan to secure counsel.
Schroeder separately chided Assistant U.S. Attorneys John D. Fabian and Douglas A.C. Penrose for their request for another 60 days to provide documents to the defense attorneys under voluntary disclosure. The judge noted that the original indictment – which had included Todd Morgan and Giacobbe – had been filed a year ago, that two other people had since pleaded guilty and that other hearings had been held since then.
"Now I’m hearing the same story over again, and it concerns me," Schroeder said. "I still question why the government needs 60 days to provide voluntary discovery on a superseding indictment."
Penrose said he was "confident" the government could comply with the deadline, since "the volume of data is much smaller and our process is more efficient." Nevertheless, Schroeder ordered that if the government exceeds 60 days, the extra time will count against the prosecutors later for purposes of complying with "speedy trial" requirements.
"I don't want to piecemeal this, but I also want a club," he said, referring to the potential penalty.
The judge ordered voluntary discovery to be completed by July 31, followed by pre-trial motions by the defendants by Jan. 31, 2020, the government's response by March 2, 2020, and any defense replies by March 16, 2020.