Ex-MCA Financial official pleads guilty in $256 million fraud case
Tuesday, August 2nd 2005, 10:14 am
By: News On 6
DETROIT (AP) _ A former MCA Financial Corp. executive reached a deal with federal prosecutors and pleaded guilty to one charge stemming from a scheme that authorities say defrauded investors and lenders of about $256 million.
John P. O'Leary, a former senior vice president for corporate finance at the defunct mortgage lender, . He pleaded guilty Monday to one count of concealing a felony, and prosecutors dropped 12 other fraud and conspiracy charges.
O'Leary will be sentenced Dec. 6. Under the agreement, prosecutors are recommending he receive one year to 18 months in prison. He also faces millions of dollars in restitution and will pay a $20,000 fine to the U.S. Department of Housing and Urban Development.
State regulators seized Southfield-based MCA in January 1999 after the company closed its offices in eight states and laid off all 900 employees.
According to prosecutors, MCA created sham assets and revenues through the purchase of low-income housing in Detroit. MCA then sold the property at marked-up prices to partnerships and limited liability companies controlled by MCA, they said.
O'Leary, 52, of Davisburg, helped conceal the scheme from lenders and auditors by directing MCA employees to prepare databases that fraudulently showed payments had been made, prosecutors said.
Lawyer Mark Kriger said he probably would seek a lower sentence for O'Leary, who was with MCA from 1994 to 1998.
O'Leary is among seven MCA officers charged since the collapse. All have pleaded guilty.
Former chairman and chief executive Patrick Quinlan Sr. was sentenced last month to 10 years in prison. In 2003, former chief financial officer Keith Pietila was sentenced to four years in prison. Both men were ordered to pay about $256 million in restitution.