By KWMU
St. Louis, MO – The former president of First Bank Mortgage will spend a year and a day in prison and must pay nearly $25 million in restitution in a bank fraud case that has its roots in the October 1989 "Black Friday" stock market collapse.
54-year-old Mark Turkcan of Kirkwood pleaded guilty in January to a felony count of misapplying funds as a bank officer. While working for Sheahan Financial in 1989, Turkcan falsified documents to cover up $5 million he lost in the October 29 market collapse. To avoid detection, he borrowed money against mortgage-backed securities issued by Bear Stearns, and told the company the borrowed money was income.
First Bank purchased Sheahan Financial in 1990 without being aware of the fraud. Federal prosecutors say Bears Stearns was also not aware of the scheme. It eventually cost First Bank $35 million.