Case 1:18-mj-00060-HKS Document 1 Filed 05/10/18 Page 1 of 91

AO 106 (Rev. 04/10) Application for a Search Warrant

United States District Court

FILED

for the

Western District of New York

MAY 1 0 2018

In the Matter of the Search of

;VVENG01^
DiSTRiC^

(IMi-Jh ilisciihi' llw propi'riy lo hesi'iin lwd orideulify ihe person hy mime timl <kliiress.)

Contents of and records related to Microsoft Corporation
email address/accounts:

Case No. 18-M- {^O

kevin.morgan@morganmanagement.com, kevin.morgan@morgancommunities.com
todd.morgan@morganmanageiTient.com, and todd.morgan@morgancommunities.com
APPLICATION FOR A SEARCH WARRANT

I, Erik Lars Hensen, a federal law enforcement officer or an attorney for the government, request a search
warrant and state under penalty of perjury that I have reason to believe that on the following person or property odfiuify
the person or describe thepivpeny to be scorched midgive its loccition)'.

Contents

of

and

records

related

to

Microsoft

Corporation

email

address/accounts

kevin.morgan@morganmanagement.com, kevin.morgan@morgancommunities.com,

todd.morgan@morganmanagement.com, and lodd.morgan@morgancommunities.com, as further described in
Attachment A, attached hereto.

located in the Western District of Washington, there is now concealed (idennjy the person or describe the property to he seized):
Evidence pertaining to wire fraud and bank fraud in violation of 18 United States Code, Sections 1343 and 1344,
respectively, as more fully set forth in Attachment B, attached hereto and incorporated herein by reference.
The basis for search under Fed. R. Crim. P. 41(c) is (check one or more):
S evidence of a crime;
s contraband, fruits of crime, or other items illegally possessed;

0 property designed for use, intended for use, or used in committing a crime;
□ a person to be arrested or a person who is unlawfully restrained.
The search is related to a violation of Title 18, United States Code, Sections 1343 and 1344.

The application is based on these facts:
S

continued on the attached sheet.

□ Delayed notice of
days (give exact ending date if more than 30 days:
requested under 18 U.S.C. § 3103a, the basis of which is set forth on the attached sheet.

.) is

A ppUcant 's signature

ERIK LARS HANSEN

SPECIAL AGENT

FHFA-OIG
Printed name and title

Sworn to before me and signed in my presence.
Date:

May 10. 2018
Judge's signature

H. KENNETH SCHROEDER

City and state: Buffalo. New York

UNITED STATES MAGISTRATE JUDGE
Printed name and Title

 Case Document 1 Filed 05/10/18 Page 2 of 91

AFFIDAVIT IN SUPPORT OF SEARCH WARRANT

STATE OF NEW YORK 
COUNTY OF ERIE SS:
CITY OF BUFFALO 
Erik Lars Hansen, being duly sworn, deposes and says:

I. INTRODUCTION AND AGENT BACKGROUND

1. I make this af?davit in support of an application for a search warrant for
information associated with certain accounts that are stored at premises controlled by
Microsoft Corporation (?Microsoft?), an email provider headquartered at One Microsoft
Way, Richmond, WA 98052-6399. The information to be searched is described in the
following paragraphs and in Attachment A. This affidavit is made in support ofan application
for a search warrant under Federal Rule ofCriminal Procedure 41 and 18 U.S.C. 2703(a),
2703(b)(1)(A) and 2703(c)(l)(A) to require Microsoft to disclose to the government cepies of
the information (including the content of communications) further described in Section I of
Attachment associated with the following email accounts:

(?Subject Account 

(?Subject Account 

(?Subject Account 

7

(?Subject Account 

 

1 On or about September 30, 2015, the domain name for Morgan Management LLC employee emails changed from
@morganmanagement.com to @morganeommunties.com. After the domain name change, employees could receive
emails sent to the same user name either at the @morganmanagement.com domain or at the
@morgancommunties.c0m domain, but responses came from the new domain, @morgancommunties.com. For ease
of reference, all email communications to and from the kevinmorgan username at either domain will be referred to as
?Subject Account 1? herein, and all email communications to and from the toddmorgan username at either domain
will be referred to as ?Subject Account 2? herein.

3 Microsoft responded to a preservation letter for these accounts confi rming that the accounts are hosted by Microsoft.

Case Document 1 Filed 05/10/18 Page 3 of 91

Upon receipt of the information described in Section I of Attachment B, govemment?
authorized persons will review that information to locate the items described in Section II of
Attachment B.

2. I am a Special Agent of the Federal Housing Finance Agency, Office of
Inspector General (FHFA-OIG) and have been so employed since February of 2014. I am
currently assigned to the Northeast Region of the FHFA-OIG, which conducts investigations
relating to, among other things, bank and mortgage fraud. I am an ?investigative or law
enforcement officer? of the United States within the meaning of Title 5, United States Code,
Section 

3. Prior to my employment with FHFA-OIG, I worked in the audit division for
FHFA-OIG and the Federal National Mortgage Association (?Fannie Mae?). I received
training from the Federal Law Enforcement Training Center in Georgia.

4. I have investigated or assisted in the investigation of a number of cases
involving fraudulent activity, including, but not limited to, mortgage fraud, bank fraud,
securities fraud, and identity theft. In the course of conducting or participating in these
investigations, I have been involved in the use of the following investigative techniques:
subpoenas, interviews, physical surveillance, consensual monitoring of communications,
search warrants, and arrest warrants.

5. I have knowledge of the following facts from my own investigation and my
discussions with and review of reports of other law enforcement of?cers and witnesses.
Because this affidavit is submitted for the sole purpose of establishing probable cause to
support the issuance of a search warrant, I have not included each and every fact known by
the government concerning this investigation.

6. Based upon information and belief, probable cause exists to believe that Kevin
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Case Document 1 Filed 05/10/18 Page 4 of 91

Morgan and Todd Morgan violated Title 18, United States Code, Sections 1343 (Wire Fraud)
and 1344 (Bank Fraud). There is also probable cause to search the information described in
Attachment A for evidence, instrumentalities, and/ or fruits of these crimes further described

in Attachment B.

H. INVESTIGATION AND FACTUAL BASIS
A. Parties and De?nitions
7. Frank Giacobbe is a mortgage broker who has operated Aurora Capital
Advisors, LLC (Aurora), a commercial real estate firm engaged in the business of brokering
loans for borrowers seeking ?nancing for multi-family properties such as apartment
complexes. Giacobbe employs an individual named Patrick Ogiony.
. 8. Morgan Management, LLC, based in Pittsford, New York, owns and operates
a portfolio of residential and commercial real estate properties. Morgan Communities
provided property management on behalf of Morgan Management, LLC. Kevin Morgan is a
Vice President of Morgan. Management, Todd Morgan is a Project Manager, and Robert
Morgan is the Chief Executive Of?cer.
9. The Federal Home Loan Mortgage Corporation, known as ?Freddie Mac,? is
a govemment-sponsored enterprise formed by the United States Congress. Among other
purposes for which Congress formed Freddie Mac was to purchase mortgages, including for
multi-family properties, to increase the amount of money available in the mortgage lending
market. Freddie Mac works with certain approved ?nancial institutions that issue loans, sell
loans to Freddie Mac, and service loans on behalf of Freddie Mac. These institutions are
known as ?seller servicers,? and include Arbor Commercial Mortgage, LLC (?Arbor?) and

Berkadia Commercial Mortgage, LLC (?Berkadia?). After purchasing loans from the

Case Document 1 Filed 05/10/18 Page 5 of 91

approved ?nancial institutions, Freddie Mac then groups the loans into packages containing
multiple loans. They sell these packages of loans to investors in a process known as

securitization.

10. Deutsche Bank AG is a German global banking and ?nancial services company
that, like Freddie Mac, purchases multi-family property loans from seller-servicer institutions
such as Arbor and Berkadia, and packages those loans into securities sold to investors.

11. Colliers International (?Colliers?) and CBRE Group, Inc. are real
estate services companIES that, among other things, appraise multi-family properties.

12. The Rochester Village Apartments at Park Place (?Rochester Village?) and the
Eden Square Apartments (?Eden Square?) are multi-family residential apartment complexes
in Cranberry Township, The Reserve at Southpointe (?Southpointe?) is a
multi-family residential apartment complex in Canonsburg, 

13. A ?rent roll? is a spreadsheet listing, among other things: (1) all of the tenants
in a multi-family property during a speci?c time frame, (2) the amount of rent paid by each
tenant; and (3) the total rental income for the property during the time frame. The rent roll
often also includes the date the tenant began occupying the apartment listed on the rent roll
and the various components of each tenant?s payments towards apartment rent, pet rent,
storage rent, parking or garage rent and cable charges among others.

14. A ?trailing twelve statement,? commonly referred to as a lists the income
and expenses for a property each month for the preceding twelve months, and may itemize
income from rent, pet fees, cable fees, storage fees, and other sources of income.

15. The ?debt service coverage ratio? for a property is a ratio of a

property?s income to its debt obligations, and is an indicator of whether a property will be

Case Document 1 Filed 05/10/18 Page 6 of 91

able to sustain its debt based on its income. A higher debt service coverage ratio indicates a
greater ratio of income to debts. Lenders in the multi-family property mortgage lending
process generally require a certain minimum DSCR before they will issue a loan. If a property
falls below a speci?ed DSCR after a loan has been issued, loan agreements generally provide
for consequences allowing the lender to have greater oversight over the property?s income.
16. A ?certificate of occupancy? is a document used by a local government
agency or building department certifying a building?s compliance with applicable building

codes and other laws, and indicating it to be in a condition suitable for occupancy.

B. The Mani-Family Mortgage Lending Process

17. The multi-family property mortgage lending process begins with the
construction of a multi-family property, or the purchase of an existing multi?family property.
Construction of a multi-family property is generally funded with a short-term construction
loan intended to ?nance the pr0perty during the period of construction and through a phase
known as the ?lease-up? phase. The ?lease-up? phase is the period after a property has been
constructed and while the property is being rented to a suf?cient percentage of occupancy that
the property is considered ?stabilized? such that it should generate a consistent level of long-
terrn income. Although the point of stabilization varies across different markets and time-
frames, a property is generally stabilized when it has reached an occupancy percentage of
approximately ninety-?ve percent. In addition to the construction loan, property owners may
also obtain additional loans, sometimes known as bridge loans or other smaller loans, to
complete the construction and lease-up phase and get the property stabilized.

18. Once a property has completed the lease-up phase and become stabilized,

multi?family property owners seek permanent financing of the property. Permanent ?nancing

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in multi-family property markets generally involves loans with seven to ten-year terms, with
balloon payments at the ends of the terms. At the expiration of a term, when the balloon
payment is due, property owners often re-?nance loans to make the balloon payment and
satisfy any other outstanding debts. Financial institutions issuing permanent ?nancing for
multi-family properties will generally loan only approximately eighty percent of the value of
the properties. The ?nancial institutions require the borrower to come up with the remaining
twenty percent either through cash or through investors because the ?nancial institution?s risk
diminishes when the borrower has a ?nancial stake in the prOperty?s future value and
performance.

19. Financial institutions that are considering issuing loans on multi-family
properties evaluate a number of factors in determining Whether to make a loan. An appraiser
inspects the property and frequently calculates a value for the property by comparison with
similar property, or, more often, by analyzing the property?s income to project the property?s
value. Elements of income that in?uence an appraiser?s or lender?s valuation of the property
include, among other things, rental income, parking fees, cable television income, and income
for the rental of storage units. A slight change in rental income per unit, projected over time,
can signi?cantly impact the property valuation calculated by the appraiser and lender.

20. During the closing process for a permanent loan, or for the packaging of a loan
into a security, appraisals and inspections may be conducted by a number of entities,
including, among others, the seller-servicer coordinating origination of a permanent loan, the
institution purchasing the loan from the seller?servicer, and investors evaluating loans that

may be included in a securitized package.

Case Document 1 Filed 05/10/18 Page 8 of 91

C. Investigation

21. An investigation has revealed that Frank Giacobbe, Kevin Morgan, Todd
Morgan, Patrick Ogiony and others conspired to provide false information to ?nancial
institutions to overstate properties? incomes and thereby induce ?nancial institutions to issue
loans either 1) for greater values than the institutions would have authorized had they been
provided with truthful information or (2) that they would not have issued at the time of
issuance had they known truth?il information. Among other things, the conspirators provided
false rent rolls, T12 income statements, and other documents to mislead appraisers, lenders
and investors into believing that properties were generating more income than they were, in
fact, generating. For example, rent rolls were falsi?ed by reporting higher rents than were
actually being charged and by reporting higher occupancy in properties (and therefore more
income) than was true.

22. Correspondence obtained by the FHFA-OIG indicates that Frank Giacobbe,
Kevin Morgan, Todd Morgan and Pat Ogiony regularly used email, including the Subject
Accounts,3 to send false information to appraisers and ?nancial institutions in connection

with loans and appraisals for muti?family and commercial real estate properties.

1. Rochester Village

23. An investigation into the ?nancing of Rochester Village revealed a variety of
fraudulent conduct in connection with attempts to secure loans on the property. Among other
things, the conspirators caused appraisers and lenders to be provided with fraudulent rent

rolls, 12 income statements, and other documents re?ecting the property?s income. Kevin

 

3 For ease of reading, and to avoid repetition, all references hereinafter to emails to and ?'om Kevin Morgan were sent
to and ?'om Subject Account 1, and all references to emails to and from Todd Morgan were sent to and from Subject
Account 2.

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Morgan?s and Todd Morgan?s email communications contain evidence of their fraudulent

conduct.

i. Building 19 Certi?cate of Occupancy

24. The investigation also revealed that, in falsifying the property?s rent rolls, the
conspirators reported that units in one of the buildings at Rochester Village were occupied
and earning rental income before the Cranberry Township Flaming and Development
department issued a certi?cate of occupancy permitting those units to be occupied. This
building was designated building number nineteen for construction purposes, and later
identi?ed as building number one (or 1000) for purposes of operating the property.

25. On September 9, 2014, Kevin Morgan emailed an employee for DGA Builders,
which was involved in the construction of Rochester Village, asking ?[W[hen can I say we
are going to be completed with building 19? Will we have of [certi?cate of occupancy]
for 18 next week?? A DGA employee replied, ?We still are on track for of 0 next week for
18. B19 we are pushing subs and working weekends to complete by November Kevin
Morgan forwarded this email to Frank Giacobbe, who responded to Kevin Morgan, Todd
Morgan and Pat Ogiony.

26. On November 18, 2014, Kevin Morgan emailed Giacobbe attaching a
conditional certi?cates of occupancy for building 19, including one issued on that date. The
email is attached as Exhibit 1, with the attachment to the email included as Exhibit 1A. At
the bottom of the conditional certi?cate of occupancy was a paragraph restricting occupancy
to the parking garage, corridors, stairwells, and four units on the ?rst ?oor of the building.
Giacobbe responded to Kevin Morgan, writing, see white out in our future.? (See Exh. 

The conspirators had already provided the appraiser with rent rolls indicating that many units

Case Document 1 Filed 05/10/18 Page 10 of 91

in the building had been occupied in October.

27. On November 19, 2014, Kevin Morgan forwarded an email to Giacobbe with
questions that an appraiser had asked about the property, including when the property had
?become stabilized,? which in the multi?family property business generally means that the
property was approximately ninety-?ve percent occupied.  2.) Giacobbe the told the
appraiser, falsely, that the ?site became 100% occupied the month of October.? 

28. On December 11, 2014, in anticipation of attempting to close a loan from
Deutsche Bank, Giacobbe emailed Kevin Morgan and Todd Morgan stating that if the lender
found out Rochester Village did not have certi?cates of occupancy for all ?oors despite
Giaocbbe having stated the property was one hundred percent leased, the lender would not
close a loan until certi?cates of occupancy were obtained for the entire site. (Exh. 3.)
Giacobbe stated, ?I?ve tried everything so I suggest we jam it at the end and hope they don?t
notice.? (Exh. 3.)

29. In December 2014, Deutsche Bank became aware of discrepancies in the rent
roll, speci?cally related to the occupancy of building 19 and decided not to provide ?nancing

for Rochester Village. The conspirators subsequently sought ?nancing from Freddie Mac.

ii. Magic Storage Units

30. The investigation also revealed that Giacobbe, Kevin Morgan and Todd
Morgan conspired to in?ate the income for storage units at Rochester Village by reporting
more units than actually existed, and greater income than the units could actually produce at
the actual storage unit rental rate.

31. On October 28, 2014, Giacobbe emailed Kevin Morgan attaching a ?pro

forrna? document listing several categories of income and expenses for Rochester Village,

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including $72,900 in annual income for ?storage space? with storage rentals priced at
$45/ month. The email is attached as Exhibit 4, with the attachment included at Exhibit 4A.
The income on the pro forma would be consistent with 180 storage units. The next day, after
the property manager emailed Todd Morgan indicating that the property had only 45 storage
units, and Todd Morgan forwarded the email, Giacobbe emailed Todd Morgan and Kevin
Morgan and asked ?Ok where did 72k come from on the proforma? (sic). (Exh. 5) Kevin
Morgan replied, ?Magic.? Giacobbe responded to Kevin Morgan and Todd Morgan,
stating ?Guys now is not the time for the 

32. On November 5, 2014, Giacobbe sent an email to a representative of an
investor contemplating whether to buy into a securitized package of loans that would include
a potential Rochester Village loan and falsely stated that Rochester Village had 180 storage

units. Giacobbe copied Kevin Morgan on this email. (Exh. 6.)

Staged Units
33. In addition to the foregoing, the investigation revealed that Giacobbe, Kevin

Morgan and Todd Morgan conspired to stage unoccupied units during inspections to create
the false impression that the units were occupied.

34. On or about January 14, 2015, after the Deutsche Bank ?nancing fell through
and the conspirators sought fmancing from Freddie Mac, Giacobbe, Kevin Morgan and Todd
Morgan attempted to make apartments appear occupied during an inspection by turning on
radios in unoccupied apartments and placing mats and shoes outside the doors of unoccupied
apartments. Giacobbe also arranged, on that date, for an individual to stage an apartment to
make it appear lived in during an inspection and to tell inspectors that her boyfriend was

asleep in the bedroom, which was lacking a bed, to keep the inspectors from looking in the

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bedroom.

35. On January 19, 2015, ?ve days after the staged inspection, Kevin Morgan
emailed the Rochester Village property manager, copying Todd Morgan. (Exh. 7.) Kevin
Morgan informed the property manager that an additional inspection was forthcoming and
asked whether the radios left on in the units during the January 14, 2015 inspection were still
audible from the hallway and whether the mats were still in the hallways. Todd Morgan
replied to Kevin Morgan, identifying three units in which radios had been left on. 

36. On March 24, 2015, in anticipation of a March 31, 2015 inspection, Kevin
Morgan emailed the Rochester Village property manager, copying Todd Morgan, and said,
?On the 315?, can you have the employees and possibly DGA [construction workers] park in
the garage for building 1000?? (Exh. 8.) ?Building 1000? refers to the building identi?ed above
as construction building nineteen for which the conspirators had reported tenants and income
before the Cranberry Township Planning and Development department issued a certi?cate of

occupancy.

iv. Free Cable

37. The investigation also revealed that the conspirators attempted to in?ate the
income at Rochester Village by reporting income charged to tenants for cable television when,
in fact, cable television was included ?ree in the rent at Rochester Village.

38. On March 24, 2015, Ogiony emailed Kevin Morgan and Todd Morgan,
attaching a Rochester Village marketing brochure advertising ?free cable? in bold font and
requesting a copy of the brochure without the reference to ?free cable.? (Exh. 9.) The next
day, Todd Morgan emailed Giacobbe and Ogiony, copying Kevin Morgan, attaching a

fraudulent Rochester Village marketing brochure without reference to free cable. The email

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is attached as Exhibit 10, with the attachment included at Exhibit 10A. A week later, on
March 31, 2015, a co-conspirator certi?ed as true and accurate an operating budget containing

in?ated income information, including $164,160.00 in ?cable income?.

v. False Rent Rolls

39. The investigation also revealed that Giacobbe, Kevin Morgan, Todd Morgan
and Ogiony conspired to provide false Rochester Village rent rolls to ?nancial institutions.

40. On March 24, 2015, Todd Morgan sent an email to Ogiony and to Kevin
Morgan aattaching what is believed to be a true and accurate rent roll for Rochester Village.
Six days later, on March 30, 2015, Ogiony emailed a false and inflated rent roll, dated March
31, 2015, to Kevin Morgan and Todd Morgan. A comparison of the rent rolls reveals the

following:

 

Re nt Roll Dated
3/24/2015 23/31/2015 . Difference

Occupied Units 154 203 49
TotalUnits 228 228 -
Occupancy Rate 68% 89% 21%

Total Charges $237,760 $335,030 97,270
Average Rent 5 1,544 5 1,650 106

 

 

 

41. On March 31, 2015, Kevin Morgan sent an email to Giacobbe with a list of
apartments that the Rochester Village property manager had identi?ed as vacant but that were
identi?ed as leased or occupied on the fraudulent rent roll. Approximately one week later, on
April 6, 2015, a co-conspirator certi?ed as true and accurate a retail rent roll that contained
false and inflated information. An appraiser, Colliers, later apprised the value of the property
at $64 million, based in part on false information provided by the conspirators, On May 12,

2015, Berkadia issued a $45.79 million loan purchased and securitized by Freddie Mac.

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42. The appraiser from Colliers stated had he known rental or other income
information was false, his appraisal could no longer be relied upon and would be invalid.
Likewise, a representative from Freddie Mac stated they relied on the appraisal, rent rolls,
and other income information, among other things, to determine if they were going to lend
and how much. Had Freddie Mac been provided with the actual income or occupancy,
Freddie Mac would not have funded the loan at that time.

43. On May 15, 2017, Todd Morgan emailed Kevin Morgan, Ogiony and
Giacobbe what is believed to be a true T12 income statement. On May 16, 2017, Ogiony
emailed Kevin Morgan and Todd Morgan, copying Giacobbe, and attaching a false and
inflated T12 income statement for servicing of the Freddie Mac loan, to be provided to the
institution servicing the loans in the securitized package in which the Rochester Village loan
was included. A comparison ofthe May 15, 2017 document with the one Ogiony sent on May

16, 2017 reveals the following:

 

 

 

Actual T12 Pat Ogiony T12 Inflated Amount

Rental Income N01 Rental Income" NOI Rental Income N01 
May-16 280,426.80 187,163.63 5 398,809 5 295,616 5 118,382 5 108,452
Jun-16 274,922.07 182,557.92 398,477 5 296,653 5 123,555 5 114,095
Jul-16 265,363.70 157,032.77 5 396,568 285,076 5 131,204 5 128,043
Aug-16 268,861.73 152,422.04 405,374 1  296,489 136,513 144,067
271,507.37 139,278.17 5 397,344 5 283,264 5 125,837 5 143,986
Oct-16 272,202.65 158,440.64 5 397,333 5 287,820 5 125,130 5 129,379
Nov-16 283,951.57 179,165.38 5 399,868 5 288,376 5 115,917 5 109,210
Dec-16 324,121.24 207,792.01 5 398,611 285,581 74,490 5 77,789
Jan-17 284,358.76 172,945.17 398,292 5 289,482 113,934 5 116,537
Feb-17 286,102.02 195,139.21 5 395,957 5 290,334 5 109,855 5 95,194
Mar-17 280,524.09 176,059.42 5 395,763 5 285,761 5 115,239 5 109,701
Totals 5 3,092,342 5 1,907,996 5 4,382,396 $3,184,450 5 1,290,054 1,276,454

 

44. 1 reviewed a Freddie Mac Multifamily Securities Investor website, which posts

loan performance data, to be used by investors. For the first quarter of2017, the revenues

l3

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on Freddie Mac?s Website matched that in the false and in?ated T12 emailed by Pat Ogiony
on May 16, 2017. The DSCR reported was 1.78. However, a calculation of the DSCR from
the true T12 revealed a 1.1 DSCR, which is below the required limit of 1.25. Had the actual
information been provided to the servicer and Freddie Mac, the loan would technically be in

default and would trigger potential contractual remedies.

2. Southpointe

45. The investigation revealed that, with respect to Southpointe, the conspirators
engaged in fraudulent conduct similar to the fraudulent conduct involving Rochester Village.
Among other things, they once again attempted to disguise that cable was included in the
tenants? rent. They also conspired to provide ?nancial institutions with false and in?ated rent
rolls and income statements. Again, evidence of their conduct can be found in Kevin Morgan
and Todd Morgan?s email communications.

i. Free Cable

46. On April 10, 2015, Ogiony emailed Kevin Morgan and asked him to ?remove
the ?Rent Inlcudes: Cable on the property?s web page and to remove ?Cable Included?
from the website?s ?features and amenities? for the property. (Exh. 11.) After Giacobbe
responded, Kevin Morgan replied, stating, ?Todd wtf. This needs to be changed
everywhere.? Giacobbe replied to Kevin Morgan, and copied Todd Morgan, stating,
?Guys we need to be on our A game to get max dollars.? The next day, on April 11,
2015, Todd Morgan replied to Kevin Morgan, as well as to Giacobbe and Ogiony, stating
?I?ve removed ?cable included? from the Morgan communities website. I?ll try to remove it
from as many ILS as I can. I don?t have the software to change the brochure, but I?ll have
Phil or Alex work on that Monday. Todd Morgan later replied to the same group,

stating: ?Update: I?ve been told items involving cable have been removed for Southpointe on
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the websites.? 
ii. False Rent Roll and Income Statement

47. On May 5, 2017, Kevin Morgan sent an email to Giacobbe, Ogiony, and Todd
Morgan to inform them that Arbor was scheduling an annual inspection, that because it was
a annie/ Freddie deal? the woman arranging the inspection needed to pick the units to be
inspected, and that ?we are at 84% so we need to discuss a game plan.? (Exh. 12.) The email
attached a true rent roll showing 84 percent occupancy.

48. On May 15, 2017, Ogiony emailed Kevin Morgan and Todd Morgan, copying
Giacobbe, attaching a false and in?ated T12 statement and a false and in?ated rent roll dated
March 31, 2017 ?for servicing? of the loan for the ?rst quarter of 2017. (Exh. 13.)

49. On May 18, 2017, Todd Morgan sent an email to Kevin Morgan attaching a
true rent roll for the property. (Exh. 14.) Kevin Morgan forwarded the true rent roll to Ogiony
and Giacobbe, copying Todd Morgan. Ogiony then sent Kevin Morgan, copying Todd
Morgan, an email attaching a false and in?ated rent roll. (Exh. 15.) This rent roll was dated

May 19, 2017 and may have been prepared for the inspection referred to in paragraph 47.

3. Eden Square
50. The investigation revealed that, with respect to Eden Square, the conspirators
continued their fraudulent conduct both with respect to attempts to obtain financing and also
during servicing of an issued loan. Among other things, they engaged in fraudulent conduct
to pass a radon inspection and provided false and in?ated rent rolls. Again, Kevin Morgan?s

and Todd Morgan?s email communications contain evidence of their fraudulent conduct.

i. Radon Inspection Interference
51. On October 24, 2016, Giacobbe emailed Kevin Morgan with instructions to

place a radon detection canister in a vacant unit on the top ?oor of the building ?with the
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window cracked like a half an inch? despite instructions from the radon testing
company to place the canisters only in ground ?oor units. (Exh. 16.) It is my understanding
that radon is the second leading cause of lung cancer.

ii. False Rent Rolls
52. On December 21, 2016, Berkadia issued a $42 million loan, ultimately funded

by Freddie Mac, on this property. The loan was conditioned on 94.9 percent occupancy. An
appraiser, CBRE, had appraised the property at $54 million based, in part on false rent rolls.

53. In the spring of 2017, an Eden Square employee gave an inspector an accurate
rent roll showing the property less than seventy percent occupied, with 164 out of 240 units
occupied. The inspector was conducting an inspection on behalf of a ?nancial institution that
was providing loan servicing on a securitized package containing the Eden Square loan. After
the employee gave the inspector accurate information, Kevin Morgan sent an email on March
15, 2017, to Giacobbe and to Robert Morgan, the Morgan Management CEO, pr0posing how
they might explain the sub-70 percent occupancy after they had closed less than three months
earlier purporting to have greater than 94.9 percent occupancy. (Exh. 17.) Later that day,
Kevin Morgan sent an email to Berkadia attempting to explain the low occupancy with

information the investigation has determined to be false. (Exh. 18.)

4. All Properties

54. Additional evidence developed during the investigation demonstrates that the
fraudulent conduct was not con?ned to Rochester Village, Southpointe and EdenSquare, but
occurred across the Morgan Management/ Morgan Communities real estate portfolio.

55. On April 7, 2016 Kevin Morgan sent an email to Morgan Management
employees, including Todd Morgan, Bob Morgan and the current Chief Financial Officer

stating ?We should never send in ?nancials that show DCR (DSCR) below where we need
16

Case Document 1 Filed 05/10/18 Page 18 of 91

to be based on the loan docs.? Later that same day Kevin Morgan sent a follow up email
stating reiterate though, we should never put ourselves in this position. DSCR should
be reviewed prior to sending in and if we do not meet the requirement, we need to make
adjustments so we do meet it.?

IH. TECHNICAL BACKGROUND

56. In my training and experience I have learned that Microsoft provides a variety
of online services, including email access, to the general public. Subscribers obtain an
account by registering with Microsoft. During the registration process, Microsoft asks
subscribers to provide basic personal information. Therefore, the computers of Microsoft are
likely to contain stored electronic communications (including retrieved and un-retrieved
email for Microsoft subscribers) and information concerning subscribers and their use of
Microsoft services, such as account access information, email transaction information, and
account application information.

57. In general, emails that are sent to a Microsoft subscriber's "mail box" remain
on Microsoft servers until the subscriber deletes the email. If the subscriber does not delete
the message, the message can remain on the server inde?nitely.

58. When the subscriber sends an email, it is initiated at the user's computer,
transferred via the Internet to Microsoft?s servers, and then transmitted to its end destination.
Unless the sender of the email speci?cally deletes the email from the Microsoft servers, the
email can remain on the system inde?nitely.

59. A sent or received email typically includes the content of the message, source
and destination addresses, the date and time at which the email was sent, and the size and
length of the email. If an email user writes a draft message but does not send it, that message

may also be saved by Microsoft but may not include all of these categories of data.
17

Case Document 1 Filed 05/10/18 Page 19 of 91

60. A Microsoft subscriber can also store ?les, including emails, address books,
contact or buddy lists, calendar data, pictures, and other ?les, on servers maintained and/ or
owned by Microsoft.

61. Microsoft users may not store on their own computers copies of the emails
stored in their Internet Microsoft account. This is particularly true when they access their
Microsoft account through the Internet, or if they do not wish to maintain particular emails
or ?les in their residence.

62. In general, email providers like Microsoft ask each of their subscribers to
provide certain personal identifying information when registering for an email account. This
information can include the subscriber's full name, physical address, telephone numbers and
other identi?ers, alternative email addresses, and for paying subscribers, means and source of
payment (including any credit or bank account number).

63. Email providers typically retain certain transactional information about the
creation and use of each account on their systems. This information can include the date on
which the account was created, the length of service, records of log-in (3., session) times and
durations, the types of service utilized, the status of the account (including whether the
account is inactive or closed), the methods used to connect to the account, and other log ?les
that re?ect usage of the account. In addition, email providers often have records of the
Internet Protocol address address") used to register the account and the IP addresses
associated with particular logins to the account. Because every device that connects to the
Internet must use an IP address, IP address information can help to identify which computers
or other devices were used to access the email account.

64. In some cases, email account users will communicate directly with an email

service provider about issues relating to the account, such as technical problems, billing
18

Case Document 1 Filed 05/10/18 Page 20 of 91

inquiries, or complaints from other users. Email providers typically retain records about
such communications, including records of contacts between the user and the provider?s
support services, as well as records of any actions taken by the provider or user as a result of

the communications.

IV. INFORMATION TO BE SEARCHED AND THINGS TO BE SEIZED

65. I anticipate executing this search warrant pursuant to Federal Rule of Criminal
Procedure 41 and Title 18, United States Code, Sections 2703(a), 2703(b)(1)(A) and
2703(c)(1)(A), by using the search warrant to require Microsoft to disclose to the government
copies of the records and other information (including the content of communications)
described in Section I of Attachment B, which is attached hereto and incorporated herein.
Upon receipt of the information described in Section I of Attachment B, government
authorized persons will reView that information to locate the items described in Section II of
Attachment B.

66. This Court has jurisdiction to issue the requested warrant because it is "a court
of competent jurisdiction" for the purposes of Title 18, United States Code, Sections 2711 and
2703(a), and Speci?cally, the Court is "a district court of the United
States . . . that has jurisdiction over the offense being investigated", 18 U.S.C. Section
271 

67. Pursuant to 18 U.S.C. Section 2703(g), the presence of a law enforcement

officer is not required for the service or execution of this warrant.

V. CONCLUSION

68. Based on my training and experience, and the information outlined in the body

of this affidavit, the investigative efforts to date indicate that there is probable cause to believe

19

Case Document 1 Filed 05/10/18 Page 21 of 91

Frank Giacobbe, Kevin Morgan, Todd Morgan and Patrick Ogiony committed acts in
violation of Title 18, United States Code, Sections 1343 (Wire Fraud) and 1344 (Bank Fraud).
In addition, there is also probable cause to search the account described in Attachment A for
evidence of this crime, as described in Attachment B, both of which are incorporated as if
fully set forth herein.

69. It is further respectfully requested that this Court issue an Order sealing, until
further order of this Court, all papers submitted in support of this Application, including the
Application, Af?davit, Attachments, and Search Warrant, and the requisite inventory notice
(with the exception of a copy of the warrant provided to the providers listed in Attachment
A). Sealing is necessary because the items and information to be seized are relevant to an
ongoing investigation and the premature disclosure of the contents of this Af?davit and
related documents may have a negative impact on this continuing investigation and may

jeopardize its effectiveness.

WHEREFORE, in consideration ofthe foregoing, it is respectfully requested that this
Court issue the requested search warrant authorizing the search of the email account

described in Attachment A for the items described in Attachment B.

2&4,

Lars Hansen

Special Agent

Federal Housing Finance Agency,
Inspector General

Sworn to before me this 10?h day

oflV?layf2018[pl/v I. 
SCHROEDER
United States Magistrate Judge

 

20

Case Document 1 Filed 05/10/18 Page 22 of 91

ATTACHMENT A

Property to Be Searched

Information and records associated with the following Microsoft email accounts:
(?Subject Account 
(?Subject Account 
(?Subject Account 

(?Subject Account 

 

These email accounts are stored at premises owned, maintained, controlled, or operated by
Microsoft Corporation, a company headquartered at One Microsoft Way, Richmond, WA

98052-6399.

Case Document 1 Filed 05/10/18 Page 23 of 91

ATTACHMENT 
Items To Be Searched For And Seized
1. Information to be disclosed bv Microsoft Corporation.

To the extent that the information and records described in Attachment A are within
the possession, custody, or control of Microsoft Corporation, including any information and
records that have been deleted but are still available to Microsoft Corporation, or have been
preserved pursuant to a request made under 18 U.S.C. 2703(f), Microsoft Corporation is
required to disclose the following to the government, for the time period September 2014
through the present, for the email account listed in Attachment A:

a. The contents of all emails associated with the account, including stored
or preserved copies ofemails sent to and from the account, draft emails,
the source and destination addresses associated with each email, the
date and time at which each email was sent, and the size and length of
each email;

b. All records or other information regarding the identi?cation of the
account, to include full name, physical address, telephone numbers and
other identifiers, records of session times and durations, the date on
which the account was created, the length of service, the types of service
utilized, the IP address used to register the account, log-in IP addresses
associated with session times and dates, account status, alternative
e?mail addresses provided during registration, methods of connecting,
log files, and means and source of payment (including any credit or bank
account number); u.

c. All records or other information stored at any time by an individual
using the account, including address books, contact and buddy lists,
calendar data, pictures, and files; and

 

ecords pertaining to communications between Microsoft
Corporation a on?"fe?g?afd?g 6 account, including contacts
with tupport services and recor ns taken.

  
 

 

.5
7 57/

 

Case Document 1 Filed 05/10/18 Page 24 of 91

II. Information to be seized by the government

All information that constitutes fruits, evidence and/ or instrumentalities of violations
of Title 18, United States Code, Sections 1343 (Wire Fraud) and 1344 (Bank Fraud),
consisting of:

a. Emails, including any corresponding attachments, between or among
Frank Giacobbe, Pat Ogiony, employees of Aurora Capital Advisors,
Robert Morgan, Kevin Morgan, Todd Morgan, Morgan Management,
Morgan Communities, Berkadia Commercial Mortgage, Arbor or other
commercial lending institutions, Colliers International or other
commercial appraisers, Federal Home Loan Mortgage Corporation, or
emails, including any corresponding attachments, which concern or
relate to rent rolls, apartment complexes, commercial real estate
developments, commercial real estate financing or re-fmancing, or
brokerage fees, and any information or metadata associated with the
emails, including but not limited to, dates, times, senders, and recipients
of the emails, and subject headings of the emails;

b. Any records or other information regarding the identification and usage
of the account;

c. Any records pertaining to communications between Microsoft
Corporation and any person regarding the account;

d. Any log in and connection logs;
e. Any calendars, address books, directories, and contact; and
f. Any additional documents which reveal other information as to who is

uploading accessing or downloading information from the servers
maintained and owned by Microsoft Corporation in relation to the
account.

  Document 71- Filed 05/10/18 Page 25 0f91 

Case Document 1 Filed 05/10/18 Page 26 of 91

From: Frank Giacobbe

To: Egvig Mgrgan

CC: Emmi

Subject: Re: RV 19 of 0 Update 20141118
Date: Tuesday, November 18, 2014 2:33:27 PM

 

I see while out in our future.

Sent from my iPhone

 

On Nov 18, 2014,31 2:25 PM, "Kevin Morgan" 
wrote:

Got the final of 0. Note the red paragraph at the bottom.

19 (1000) C?ond. ol?O 20l4l l8.pdt>

 ~..A.?Casei 11158-mje00060-HKS Document 1 Filed 05/10/18 Page 27 bf 91

EXHIBIT. 1A 

Case Document 1 Filed 05/10/18 Page 28 of 91

 

 

.
 2525 Rochester Road, Suite 400 Application 
Cranberry Township, PA 16066?6499
 

Planning and Community Development

 

 

 

p(724) 776-4806 - 11724) 775-4420

 

Certificate of Occupancy

NEW NON-RESIDENTIAL STRUCTURE
In Accordance with 2009 

 

 

 

 

 

 

 

 

 

Butler County Map Parcel Address of Property
130.4F108.16AF 1101 CROSS CREEK DRIVE
Zoning District Development
PARK PLACE
Use Group: Construction Type: VB Square Footage: 45,889
Use Group: S-1 Construction Type: VB Square Footage: 15,035

Description of Construction:

ROCHESTER VILLAGE APARTMENTS BUILDING #19 36 UNIT, 3 STY
RESIDENTIAL DWELLING A PARKING GARAGE BELOW

Automatic Sprinkler Installed: Yes

 

Owner: PARK PLACE PITTSBURGH LLC

 

Address: 1170 PITTSFORD-VICTOR RD Phone:

SUITE 100
PITTSFORD. NY 14534

 

Applicant: DYNAMIC BUILDING CORPORATION

 

Address: 51 PENNWOOD PLACE, SUITE 200 Phone:
WARRENDALE, PA 15086

 

 

Occupant: DYNAMIC BUILDING CORPORATION

 

 

 I 
Cage: gag-71W 

. . I .
 Authorized Signature Date of Final Inspection
ln?pected for compliance with the Uniform Construction Code

Conditional Occupancy? Approval has been granted for the following areas:
Parking garage, 15? 3rd floor corridors, stairwells, and lst, 2n0 and 3rd floor
apartment units with exception of apartment units 304, 305, 311 and 312. A final,
unconditional occupancy will be granted upon completion of open items listed on
field inspection reports and memo transmittal provided to contractor and DGA.

Case Document 1 Filed 05/10/18 Page 29 of 91

 

 

I 
 2525 Rochester Road, Suite 400 Application 
Cranberry Township, PA 16066-6499

 

 

 

 

 

 

 

 

 

 

 

 

 

-TOWNSHI
Planning and Community Development 
p(724) 776?4806 - ?724) 776-4420
Certificate of Occupancy
NEW NON-RESIDENTIAL STRUCTURE
In Accordance with 2009 1.8.0.
Butler County Map Parcel Address of Property
130.4F108.16AF 1101 CROSS CREEK DRIVE
Zoning District Development
PARK PLACE
Use Group: Construction Type: VB Square Footage: 45,889
Use Group: S-?l Construction Type: VB Square Footage: 15,035

Description of Construction:

ROCHESTER VILLAGE APARTMENTS - BUILDING #19 - 36 UNIT. 3 STY
RESIDENTIAL DWELLING A PARKING GARAGE BELOW

Automatic Sprinkler Installed: Yes

 

Owner: PARK PLACE PITTSBURGH LLC

 

Address: 1170 RD Phone:

SUITE 100
PITTSFORD, NY 14534

 

Applicant: DYNAMIC BUILDING CORPORATION

 

Address: 51 PENNWOOD PLACE, SUITE 200 Phone;
WARRENDALE, PA 15085

 

Occupant: DYNAMIC BUILDING CORPORATION

 

 

 

KM 12 $4047

Authorised Signature Date/of F?inal InSpection
I pected for compliance with the Uniform Construction Code
Conditional Occupancy - Approval has been granted for the following
areas: Parking garage, 1St -3rd floor corridors, stairwells and the 1St and
2nd floor apartment units. Occupancy approval has not been granted for

the 3rd floor apartment units.

Case Document 1 Filed 05/10/18 Page 30 of 91

 

 


 2525 Rochester Road, Suite 400 Application 
Cranberry Township, PA 16066-6499

 

 

 

 

Planning and Community Development
p(724) 776-4806 f(724) 776-4420

 

Certificate of Occupancy
NEW NON-RESIDENTIAL STRUCTURE

In Accordance with 2009 

 

 

 

 

 

 

 

 

 

Butler County Map Parcel Address of Property
130.4F108.16AF 1101 CROSS CREEK DRIVE
Zoning District DeveIOpment
PARK PLACE
Use Group: Construction Type: VB Square Footage: 45,889
Use Group: 8-1 Construction Type: VB Square Footage: 15,035

Description of Construction:

ROCHESTER VILLAGE APARTMENTS - BUILDING #19 36 UNIT. 3 STY
RESIDENTIAL DWELLING A PARKING GARAGE BELOW

Automatic Sprinkler installed: Yes

 

Owner: PARK PLACE PITTSBURGH LLC

 

Address: 1170 PITTSFORD-VICTOR RD Phone:

SUITE 100
PITTSFORD. NY 14534

 

Applicant: DYNAMIC BUILDING CORPORATION

 

Address: 51 PENNWOOD PLACE. SUITE 200 Phone:
WARRENDALE, PA 15086

 

Occupant: DYNAMIC BUILDING CORPORATION

 

 

 

5/1 (C MD IZ/ro/Zoief

Authorized Signature Date of Final Inspection
Ins posted for compliance with the Uniform Construction Code

Conditional Occupancy? Approval has been granted for the following
areas: Parking garage, 1St -3rcl floor corridors, stairwells and all of the 1St
floor apartment units. Occupancy approval has not been granted for
the 2nd and 3rd floor units.

Case Document 1 Filed 05/10/18 Page 31 of 91

 



 

2525 Rochester Road, Suite 400 Application 
Cranberry Township, PA 16066-8499
- TOWN HIP -

 

 

 

 

 

 

 

 

 

 

 

 

 

Planning and Community Development 1
6(724) 776-4806 - 4724) 776-4420
Certi?cate of Occupancy
NEW NON-RESIDENTIAL STRUCTURE
In Accordance with 2009 I.B.C.
Butler County Map 8: Parcel Address of Property
130.4F108.16AF 1101 CROSS CREEK DRIVE
Zoning District Development
PARK PLACE
Use Group: R-2 Construction Type: VB Square Footage: 45,889
Use Group: 8-1 Construction Type: VB Square Footage: 15,035

Description of Construction:

ROCHESTER VILLAGE APARTMENTS - BUILDING #19 - 36 UNIT, 3 STY
RESIDENTIAL DWELLING A PARKING GARAGE BELOW

Automatic Sprinkler Installed: Yes

 

Owner: PARK PLACE PITTSBURGH LLC

 

Address: 1170 PITTSFORD-VICTOR RD Phone:

SUITE 100
PITTSFORD. NY 14534

 

Applicant: DYNAMIC BUILDING CORPORATION

 

Address: 51 PENNWOOD PLACE, SUITE 200 Phone:
WARRENDALE, PA 15086

 

Occupant: DYNAMIC BUILDING CORPORATION

 

 

 

11/73/2014

Authorized Signature I Date of Final Inspection
Inspected f0!" compliance with the Uniform Construction Code
Conditional Occupancy? approval has been granted for the following
areas: Parking garage, 1512nd and 3rd floor corridors, stairwells and units
102,103,104 and 105. Occupancy in any other apartment unit without
prior approval is prohibited.

 

I case DOcum?ntl Filed 05/10/18 Page 32 of91 



Case Document 1 Filed 05/10/18 Page 33 of 91

FW: Rochester Village

From: Frank Giacobbe <"lo=mex05lou=exchange administrative group


To: "Bllger. Matt" 

Date: Thu, 20 Nov 2014 11:45:54 -O500

Attachments: Park Place - Rochester Village T12 September 14.pdf (28.73 kB)

 

Matt, received this email yesterday. Below are the answers to your questions.
1. The site became 100% occupied the month of October.
2 The ?rst building was leased in September 2013 and it took approximately 12 months to
become fully leased. Every building was preleased the moth before it came on line.
3. There was a waiting list so its dif?cult to say. When a building received conditional CofO
tenants moved in.
4 September 2013

Regards,

Frank Giacobbe

P?ndpal

Aurora Capital Advisors, LLC
57 Virginia Place

Buffalo, NY 14202

Of?ce: (716)332-4544
Mobile: (716)432-9814

Fax: (716)931-9210

 

From: Kevin Morgan .. z. 2
Sent: Wednesday, November 19, 2014 4:36 PM
To: Frank Giacobbe; Pat Ogiony

Subject: FW: Investor Message

 

From: Am Pontius

Sent: nesday, November 19, 2014 4:34 PM
To: Kevin Morgan; Todd Morgan

Subject: Fwd: Investor Message

Ithought I should send this to you.
AP

Begin forwarded message:

   

   
 

   

Date: November 19, 201 at 
TozAmyPontius unit-Jasmine!?
Subject: Investor Message

  

 

Case Document 1 Filed 05/10/18 Page 34 of 91

Hi Amy,

I just spoke to an investor/ap raiser on the phone. I actually didn't know the answers to any of the
questions. His name is Matt rom Colliers International. He needed answers to the following
quations before the end of the day:

1. What month did our property become stabilized?

2. What was the absorption time (how many months?)

3. What was the avera number of units during absorption time?

4. When was the ?rst uilding opened?

His email is W. His phone number is: 614-437-4686.

Thank you,
Gemma LaBella
Leasing Consultant

Rochester Village A artments
10100 Kettlecneek Dr. Surte 10
Cranberry Township, PA 16066

Ph: 724-553-550 Fax: 724-553-5573

Hun (27110122111; I 1 no

          



 

Case Document 1 Fil?d 05/10/18 Page 35 of91 

Case Document 1 Filed 05/10/18 Page 36 of 91

RE: Rochester village

From: Frank Giacobbe <"lo=mex05lou=exchange administrative group


To: Kevin Morgan 

Cc: Todd Morgan Robert Morgan


Date: Thu. 11 Dec 2014 09:26:24 -0500

 

I'm not sa that. fill going to push without it. But in the event they ?gure it out It might slow us down until
we ave a

Regards.

Frank Giacobbe

Principal

Aurora Capital Advisers, LLC
57 Virginia Place

Buffalo. NY 14202

Of?ce: (716 332-4544
Mobile: (71 )432-9814

Fax: (716)931-9210

?0riginal Message?

From: Kevin Morgan 
Sent: Thursday, December 11, 2014 9:01 AM

To: Frank Giacobbe

Cc: Todd Morgan; Robert Morgan

Subject: Re: Rochester village

We understand. We need full of to close. Should happen next week.
Sent from my iPhone

On Dec 11, 2014. at 9:00 AM. Frank Giacobbe <fg@auroracap.net> wrote:



Todd, let me be clear. if the lender ?nds out we don't have conditional cofo for all the ?oors and have
been saying its 100 percent leased they won?t allow us to close until we have the cofo's for the entire site.
I've tried everything so I suggest we jam it at the end and hope they don't notice. Again ARBOR, like any
other lender has a 3rd party zoning consultant mat makes sure the site is in compliance.



Regards.


Frank Giacobbe

Principal

Aurora Capital Advisors, LLC
57 Virginia Place

Buffalo, NY 14202

Of?ce: (716)332-4544

Mobile: (716)432-9814

Fax: (716)931-9210



??Original Message?

From: Todd Mo an 
Sent: Thursday. ecember 11. 2014 8:20 AM

To: Frank Giacobbe

Subject FW: Rochester village



Frank-Are we still on track to close Rochester Village December 19th after we cleared everything up

Case Document 1 Filed 05/10/18 Page 37 of 91

with the of 0 yesterday?


?Original Message?

From: Kevin Morgan

Sent: Wednesday. Deoember10. 2014 7:26 AM
To: Robert Morgan

Cc: Frank Glaoobbe1; Todd Morgan

Subject Re: Rochester village



Frank says deo 19th


Sent from my IPhone


On Dec 10, 2014. at 7:22 AM. Robert Morgan wrote:


When can we close



Sent from my IPhone



On Dec 10, 2014, at 6:23 AM, Kevin Morgan wrote:


Frank - we need to know what the new loan amount is for Rochester village now that we have the
adjustment in the real estate taxes. Please get that to us as soon as possible.



Thanks.



Kevin



Sent from my iPhone



Case Ddcument 1 .Filed 05/10/18 Page 38 of 91 4

EXHIBIT 4

Case Document 1 Filed 05/10/18 Page 39 of 91

From: Frank Giacobbe

To: v' 

CC: 

Subject: Rochester Village

Date: Tuesday, October 28, 2014 4:07:00 PM
Attachments: - ?f rm i .xl 

 

Give me a call to discuss.
Regards,

Frank Giacobbe

Principal

Aurora Capital Advisors, LLC


57 Virginia Place

Buffalo, NY 14202

Office: (716)332?4544
Mobile: (716)432?9814

Fax: (716)931?9210

(X AND DISCIA INN XI )lltili: This electronic transn'iission, including
any attachments, contains con?dential informant belonging to the sender and is intended only for receipt by the
individual or entity named. You should not disseminate, distribute or Copy this transmission. it? you believe that you
have received this transmission in error, please or :Iify the sender immediately by return e--mail and delete and erase this
transmission from your system. Further, you are hereby noti?ed that any disclosure, copying, distribution, use or
dissemination of t'he transmission or its contents, or the taking ofany action in reliance on the contents of this

transmission is sl rictly prohibited.

Please note that any views or opinions presented by this transnlission are solely those. of the author and do not
necessarily represent those of Aurora Capital .\d\'isors, informant H1, facts, or figures, ?nancial or otherwise,
which is being presented to a lender or party to a ?nancial transaction has been certi?ed by the Client and is not the
work product of .\urora (:apiral Advisors, its employees or subsidiaries. na Capital Advisors, LLC does not
individually certify or verify any information contained in this or any subsequent ctammut?tication.

Case Document 1 Filed 05/10/18 Page 40 of 91

EXHIBIT 4A

Case 

Park Place Apartments

Document 1 Filed 05/10/18

Page 41 of 91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SF Rent Rent Rate/SF Annual Rent
Per Unit
3 Units
Building 1 2 EUR 2 BA - Unit A 4 1156 5 1,561 6,242.40 5 1.35 5 74,908.80
Building Unit 4 1102 5 1,488 5 5,950.80 5 1.35 5 71,409.60
Buildings 2&3 - 2 EUR - 2 314- Unit A 10 1157 5 1,562 5 15,619.50 5 1.35 5 187,434.00
Buildings 2&3 - ZBDR - 2 814- Unit 10 1103 5 1,489 5 14,890.50 5 1.35 178,636.00
Buildings 4&5 - ZBDR - 2 031- Unit A 10 1157 5 1,552 5 15,619.50 5 1.35 187,434.00
Buildings 4&5 - ZBDR - 2 34- Unit 10 1103 5 1,489 5 14,890.50 5 1.35 5 178,686.00
Buildings 153:19 - ZBDR - 2 371? Unit A 70 1012 5 1,366 5 95,634.00 5 1.35 5 1,147,608.00
Buildings 15&19 - ZBDR - 2 84? Unit 60 1068 5 1,442 5 86,508.00 5 1.35 5 1,038,096.00
Buildings 158:19 - IBDR - 1 BA - Unit 30 773 5 1,121 5 33,625.50 5 1.45 5 403,506.00
Buildings 153i19 - 1808 - 1 BA - Unit 5 692 5 1,003 5 5,017.00 5 1.45 60,204.00
Buildings 153219 - 1808. - 1 BA - Unit 15 793 5 1,150 5 17,247.75 5 1.45 5 206,973.00
Garages - 0 1 85 5 85.00 5 -
Retail 1 12710 21,225.70 5 1.67 254,708.40
Total 228 332,471.15 5 31.935.653.80
Garages are included in rent.

income: Per Unit
Gross Potential Rent 5 3,989,654 12,498

Vacancv [$199,483] 5%

Concessions 50 -

Cable Income 3 109,440 5 40 Unit/Month

internet 5 - Unithonth

Storage Space 5 22,900 5 45 Unit/Month

Vacancyr Cable 81 Laundry {$9,112} 5%
Total Net Rent 53,963,394 17,383

Application Fees - other Income $223,000 1,000 1000 unit
Total Income $4,191,394 18,383
Expenses: Assumptions Per unit/SF 

Payroll $159,600 200 5 200.00 Unit

Marketing Advertising $11,400 50 5000 Unit

Snow Removal $12,100 25 5 25.00 Unit

Utilities 579,800 350 5 350.00 Unit

Maintenance 8. Repairs $91,200 400 5 400.00 Unit

Insurance $38,760 120 5 120.00 Unit

RE Taxes $285,000 1,250 5 1,250.00 Unit

Management Fee $162,656 235 4% 

Cleaning/Supplies $22,800 100 5 100.00 Unit

WaterfSewer 511,400 50 5 50.00 Unit

Cablellnternet $101,232 444 5 32.00 Unitfmonth

Trash 517,100 75 5 7500 Unit

Replacement Reserves $52,000 250 5 250.00 Unit
Total Expenses $1,060,048 4,649
Expense Ratio 25.3%
NOI $3,131,346 13,734
Cap Rate 5.50%
Value 5 48,174,559 211,292
Value per Unit 211,292
Loan Amount 5 33,539.54? 5 169,034
Annual Debt Service 5 2,432,620
USER 1.26
Cash Flow 5 643,626
Annual Debt Service 5 1,926,982
Cash Flow 1,204,364
Assumptions
Rate: 5.00%
Amortizaation 360.00 Months
Cap Rate 6.50%
LTV Rate 80%

 

 j;  Document 1 Filed 05/10/18 Page 42 of91?

EXHIBIT 5

Case Document 1 Filed 05/10/18 Page 43 of 91

Re: Storage Units-Roc Vil

 

From: Frank Giaoobbe <"Io=mex05lou=exchange administrative group


To: Kevin Morgan 

Cc: Todd Morgan Pat Ogiony
<pogiony@auroracap.net>

Date: Wed, 29 Oct 2014 12:40:25 -0400


Guys now is not the time for the 

Sent from my iPhone
On Oct 29. 2014, at 12:27 PM, "Kevin Morgan" wrote:

1
Magic.

 

From: Frank Giacobbe 
Sent: Wednesday, Gate 29, 14 12:27 
To: Todd Morgan

Co: Kevin Mo an; Pat Ogiony
Subject: Re: torage Units-Roe \nl

0k where did 72k come from on the proforma
Sent from my iPhone

On Oct 29, 2014, at 12:25 PM. "Todd Morgan" mo - 2.,

 

See below regarding storage at Rochester Village.

 

From: Jessica Hengler

Sent: Wednesday, October 29, 2014 12:25 PM
To: Todd Morgan

Co: Amy Pontlus

Subject: RE: Storage Units-Rec 

Todd,

We have 45 total storage units. There are 5 buildings with storage, and 3 on each ?oor.

 

 

Case Document 1 Filed 05/10/18 Page 44 of 91

Let me know If you need anything else!

Thank you,

Jessica Hengler Property Manager
Rochester Village Apartments

10100 Kettlecreek Dr. Suite 100
Cranberry Township, PA 16066

97245535570 f. 724?553-5573

Wm
LikueomEeoeMokl

 

From: Todd Morgan

Sent: Wednsd October 29, 2014 12:00 PM
To: Jessica Heng er

Subject: FW: Storage Units-Roe 
Importance: High

Can you help me out on this?

 

From: Todd Megan

Sent: Tuesday, ctober 28, 2014 5:09 PM
To: Amy Pontlus

Cc: Kevin Morgan .

Subject: Sto 6 Units-Rec Vil
Importance: 

Amy-Can you let us know how many total storage units we have at Rochester Village?

 

Case Document 1 Filed 05/10/18 Page 45 of 91

Todd Morgan

Morgan Management, LLC
1080 Puttsford-Vlctor cad. Suite 100
Pittsford, NY 14534

Phong8g585 419-9630

Fax )41 9636

MW

 

 

 

THE INFORMATION CONTAINED IN THIS ELECTRONIC MESSAGE AND ANYATTACHED IS INTENDED
ONLY FOR THE PERSONAL AND CONFIDENTIAL USE OF THE DESIGNATED RECIPIENTS NAMED ABO . THIS MESSAGE
MAY CONTAIN CONFIDBVTIAL OR PROPRIETARY INFORMATION. IF THE READER OF THIS MESSAGE IS NOT THE
INTENDED RECIPIENT, YOU ARE HEREBYNOTIFIED THAT YOU HAVE RECEIVED THIS DOCUMENT IN ERROR, AND THAT
ANY REVIEW, DISSEMINATION, DISTRIBUTION OR COPYING OF THIS MESSAGE IS IF YOU
HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE REPLY TO THE SENDER THANK YOU.

Case KS Document 1 Filed 05/10/18 Page 46 of 91

EXHIBIT 6

Case Document 1 Filed 05/10/18 Page 47 of 91

Re: Rochester Village - Other Income

 

From: Frank Glaoobbe group


To: Maksym Pazuniak 

Co: John Buocl <buocl@steeprockcapltal.com>

Date: Fri, 07 Nov 2014 11:59:52 -0500

 

I think 48million but I will check
Sent from my iPhone
On Nov 7, 2014, at 10:44 AM, 'Maksym Pazuniak? wrote:



Frank -

What is the existing debt on this thing?

Thanks.

Maks

 

From: Frank Giaoobbe 

Sent: Wednesday, Novembero 014 11: 7

To: Maksym Pazuniak

Cc:  -2. as ms. 01' 'John Buoci; Nathan Mitchell; Ronen Abagel

Subject: 3e: Rodtester \?llage - Other Income

 

Guys go with these numbers we are a week or more on those

Sent from my iPhone

On Nov 5. 2014, at 11:33 AM. 'Maksym Pazuniak" 

 

Yes, we can read this one well enough - what is timing on October numbers?

Thanks

 

 

Case Document 1 Filed 05/10/18 Page 48 of 91

 

 

 

From: Frank Giaoobbe 

Sent: Wednesday, November 0 2014 11:23 AM

To: Maksym Pazuniak

Cc: . i II 0 1911 122111;. 1 as i 010 John Matthew Mitchell; Ronen Abergel

W)
ubject: Rochater Village - Other Income

   

I did can you guys read It now.

Sent from my lPhone

On Nov 5, 2014. at 11:07 AM. ?Maksym Pazuniak? <2azuniak?sleenm?lsnani1aLQQm> wrote:

Thanks Frank Can you rescan and forward We can't read it.

 

From: Frank Giaoobbe 
Sent: Wednesday, November 0 2014 10:03

To: Maksym Pazuniak
Cc- 2. -., John Buoci; Matthew Mitchell; Ronen Abergel

ubject: 32: Rod1ester Village - Other Income

 

. There are 180 possible storage units available at 45 dollars a unit. We expect fully stabilized it
will be approximately 75% occupied. Currently the property's storage units are 50% occupied. No
schedule is available for the storage units.
. Morgan makes charges 60 per unit for basic cable. Anything above that goes directly to the
cable company. Morgan Management gave free cable and storage for the ?rst months to

encourage tenants to move in now that all the units have ?nal CofO?s that has been eliminated
and they are charging the going rates.

The Rent is paid for another entity as RENT and the expenses are paid by the property.

Attached
Regards.

Frank Giaccbbe

Principal

Aurora Capital Advisers, LLC
57 Wrginia Place

Buffalo. NY 14202

Of?ce: (716)332-4544

 

 

From: Maksym Pazunlak rr 

 

Case Document 1 Filed 05/10/18 Page 49 of 91

Mobile: (716)432-9814
Fax: (716)931-9210

 
 
 

. 
Sent: Monday, November 03, 2014 5:12 PM
To: Frank Glacobbe

Cc. - .1.
Subject:
Hey guys.

Just to follow up on our call earlier today. we thought It would be helpful to send over our speci?c
questions on the Other Income so you know what we're lookin for. As discussed. we?re trying to
get comfortable underwriting as much O?ter Income as possib which as you know can be
dif?cult for an asset.

Regarding the $72,900 budgeted for Storage, what is the In place Income? Can you send a
sghbei?gle? with the available storage units and pricing? When do you expect this income to
9

Regarding the $164,160 budgeted for Cable. can you provide some detail on this revenue?
What Is the In place income? It looks like you expect to purchase the Cable In bulk for $101,232
and then re~sell It for $164,160. is this accurate?

Regarding the $242,224.35 In Retail Income, we believe we understand this in general. but
have a few questions:

a. The Retail Rent Roll includes Income from the Resident Lounge and Fitness
Center- I assume this is paid from the Property, Is the related expense included
in the Operating Budget?

b. Can you shoot over the leases as well?

Regarding ?te $228,000 In llcation Fees and Other Income. Is this Budgeted Line item the
same as the ?Fees, Charges orfeitures? line In the Trailing-12 Operating Statement? Do you
expect the ~$20kl month Income that the Property has booked since May to continue?

Please send over the October when it is complete. The more detail you can provide on the
various Other Income line items. the easier it will be for us to understand and underwrite It.

Thanks.

 

 

Case Document 1 Filed 05/10/18 Page 50 of 91

Make

 

Maksym Pazuniak
SteapRock Capital. LLC
212.218.5055

aznlk ste 

54 Thompson Street
4th Floor
New York, NY 10012

Case Documentl Filed'05/10/18 Page 51 o_f91 7

EXHIBIT 7

Case Document 1 Filed 05/10/18 Page 52 of 91

Re: Inspection

 

From: Frank Giaoobbe <'lo=mex05lou=exchange administrative group


To: Jessica Hengler 

Cc: Todd Morgan Kevin Morgan


Date: Mon. 19 Jan 2015 16:56:49 -0500

 

We just need to see 1 of each unit type. Last time was 5 percent.

Sent from my iPhone
On Jan 19, 2015, at 4:43 PM, "Jessica Hengler" wrote:

i

Quick question. Is it okay to use the same apartments as last time?

Jessica Hengler Property Manager
Rochester Village Apartmen ts
10100 Kettlecreek Dr. Suite 100

Cranberry Township, PA 16066

p.724?553?5570 f. 724553?5573

MW
LikeumEammel 

 

 

From: Frank Giaoobbe 
Sent: Monday, January 19, 201 4:17 PM

To: Todd Mo an; Kevin Morgan; Jessica Hengler
Subject: RE: nspec?on

Guys. liust got word that the inspection is going to be pushed to Friday due to the weather. So can we do

Case Document 1 Filed 05/10/18 Page 53 of 91

the inspection the same way on Friday of this week.

Regards.

Frank Giaoobbe

Principal

Aurora Capital Advisors, LLC
57 Virginia Place

Buffalo. NY 14202

Of?ce: (716)332-4544
Mobile: (716)432-9814

Fax: (716)931-9210

?FroszoddMorgan 11:. an
Sent: Monday. January 19, 2015 11:36 AM

To: Kevin Morgan; Jessica Hengier

Cc: Frank Giaoobbe

Subject: RE: inspection

   

in regards to the radios. they are in the following units:

Floor 1: Unit 112
Floor 2: Unit 211 (please Just confirm that is the case but it is ether in that unit or in the unit right next to it)
Floor 3: Unit 301

Thanks.

Todd

From: Kevin Morgan

Sent: Monday. January 19. 2015 11:29 AM
To: Jessica Hengler

Cc: Frank Glaoobbe1: Todd Morgan
Subject: inspection

Case Document 1 Filed 05/10/18 Page 54 of 91

Jessica.

We have an ins eotlon on Wednesday at 10am. [won't be there but Frank will be and he'll arrive at
around 9am. hen he gets there. can you close the of?ce like you did the last time? We'll need Dean
again to walk them around.

We need to show 1 of each unit type. all Let's do 1 unit In the building the of?ce Is In. Then the
rest we can do In the bigger buildings since that is where the other unit types are. Let?s make sure to
show 1 of the occupied units In building 2000. .

Also. do you know If building 19 is still the way we left It? We left some radios In the 3 of the units that
were turned on, can you make sure they are still audible from the hallway? Todd can give you the unit
numbers. Are the mats still sitting In the hallways? We want to make sure It still looks the same.

Let me know.
Thanks,
Kevin J. Morgan

Morgan Management, LLC
1080 Pittsford-Victor Rd.
Pittsford, NY 14534

Phone: (585) 419-9630
Fax (585)419-9636

MW




THE INFORMA TION CONTAINED IN 77-IIS ELECTRONIC MESSA GE AND ANY

A ITA CHED IS INTENDED ONL YFOR THE PERSONAL AND
CONFIDENTML USE OF THE TED RECIPIENTS NAMED ABOVE. THIS
MESSAGE M4 CONTAIN CONFIDEN77AL OR PROPRIETARY INFORM TION. IF
77-IE READER OF THIS MESSAGE IS NOT THE IN TENDED RECIPIENT YOU ARE
HEREBYNOTIFIED IHA YOU HA VE RECEIVED THIS DOCUMEN TIN ERROR.
AND THA TAN REVIEW, DISSEMINA TION, DIS TRIBUTION OR COPYING OF
THIS MESSAGE IS 8 TRIC TL YPROHIBI TED. IF YOU HA VE RECEIVED THIS

 TION IN ERROR, PLEASE REPI. TO THE SENDER IMMEDIA TEL Y.

Case Document 1 Filed 05/10/18 Page 55 of 91

EXI-HBIT 8

Case Document 1 Filed 05/10/18 Page 56 of 91

Re: Inspection


From: Kevin Morgan 

To: Frank Glaoobbe <fg@auroracap.net>

Cc: Pat Oglony Todd Morgan


Date: Tue. 31 Mar 2015 07:31:29 -0400

Sggm? like frank is on top of it so I?ll wait to hear how the inspection goes, that is if anyone cares to tell me
a .

Sent from my iPhone
On Mar 31, 2015, at 7:27 AM. Frank Giaoobbe wrote:

9:30 and DGA has the keys to most of the units in building 1 because they still aren't ?nished.

 

From: Kevin Mo an i 
Sent: Tuesday, arch 31, 2015 7:04 A
To: Pat Ogiony

Cc: Frank Giacobbe; Todd Morgan
Subject: Re: Inspection

What time is the engineering inspection today?

We need to ?gure this out so we don't look like a bunch of assholes.

Sent from my iPhone

On Mar 31, 2015, at 6:54 AM, Pat Ogiony wrote:

I'll double check and let you guys know.
Sent from my iPhone

On Mar 31. 2015, at 5:33 AM, Kevin Morgan 

 

Pat,

l'm apparently not that involved in this re? so can you scroll down to the units for the engineering
walk that my manager decided to pick on her own that she says are vacant? I know this is

 

 

 

Case Document 1 Filed 05/10/18 Page 57 of 91

 probably a stupid question but do they show as vacant or occupied on your rent roll? it's a minor
1 fiat??  l?gured someone better ask the question since she doesn?t know what the rent roll
00 9.

Thanks.
Kevin

Sent from my lPhone

Begin forwarded message:

From: Frank Giaoobbe <th

Date: March 30. 2015 at 11:15:54 PM EDT

To:KevinMorg 11 aligning. 
Subject: RE: Inspection

 
   
   
 

D)
3
A

it's not fair for you to judge. Get involved ifyou want to but things change and I need to
?gure it out. You want to know what's up it Isn?t that simple.

From: Kevin Morgan 2  1.11 - u. 
Sent: Monday, March 30. 2015 9:53 PM
To: Frank Glacobbe

Subject: Fwd: inspection

   

Frank - what Is the deal here?

Sent from my lPhone

Begin forwarded message:

  
 
 

From: AmyPontius< l! 1111;] a: 11:1 In
Date: March 30, 2015 at 9:48:00 PM EDT
To:KevlnMorg 1311 

0k. had come in at end of day and wanted to get keys to the vacant
ready units In 1000.

I will make sure she knows. ls Frank aware he will not be doing the engineering
inspection?

 

 

 

 

 

 

Case Document 1 Filed 05/10/18 Page 58 of 91

Thanks.
AP

 

From: Kevin Morgan

Sent: Monda March 30, 2015 9:30 PM
To: Amy Pon ?us

Subject: Re: Inspection

Amy - there will be no engineering inspection. Please make sure those units do not get
shown. Can you con?rm Maribe?t knows this?

Thanks,

Kevin

Sent from my lPhone

 

On Mar 30. 2015. at 9:09 PM, Amy Pontius 11
wrote:

7 Just in case you need for tomorrow.
AP

Begin forwarded messageDate: March 30, 2015 at 6:45:09 PM EDT



  Just an FYI. listed below are all of the apartments that are Included In the walk
for tomorrow. March 31St 

Occupied Apartments

Building 10 - #10304
1 Building 9 - #9101

 

 

 

 

Case Document 1 Filed 05/10/18 Page 59 of 91

Building 8 - #8201

 Building 7 - #7102

1 Building 6 - #6204 (resident requested entry after 10:00 am please)
 Building 5 - #5212

Building 4 - #4105

7 Building 3 - #3306

Building 2 - #2107 and #2306

Building 1 -#1307

i  Additional Building 1 Apartments (Appraisal)

 #1309 - Occupied

 #1311 - Occupied

 #1202 Vacant - Moving date changed to 411/15
 #1107 - Furnished Vacant

 Engineering Walk (all vacant)

#1105
#1107
I #1202
1 #1207
 #1210
 #1303
 #1305
 #1306
 #1312
#2205
i #2212

Case Document 1 Filed 05/10/18 Page 60 of 91

5 Thank you!

imarabetn magma

i  Morgan Management

 Property Manager

  Rochester Village at Park Place
  10100 Kettlecreek Drive Suite 100

 Cranberry Township, PA 16066

3 2th 724-553-5570 Fax: 724-553-5573

 
 

 

5 From: Amy Pontius

 ?5 Sent: Tuesd March 24, 2015 10:41 PM
  To: Maribeth isiday

11:10

 

 

 

 

  Subject: Re: Inspection

  Thank you Melissa should be able to call the 
  Thanks.
i  AP

  On Mar 24, 2015, at 5:27 PM, "Maribeth Kisiday'
 -qz. . ,01- >wrote:

    

ljust need to con?lm the walk list with Dean in the morning and I will send

 

 

 

 

Case Document 1 Filed 05/10/18 Page 61 of 91

you the list immediately after I speak with him.

Thank you!

Maribe?cln Kis?wlag

Morgan Management

Property Manager

Rochester Village at Park Place
10100 Kettlecreek Drive Suite 100
Cranberry Township, PA 16066

Ph: 724-553-5570 Fax 724-553-5573
mmhestemillagamm


 

From: Amy Pontius

Sent: Tusda March 24, 2015 4:03 PM
To: Maribeth 'siday

Subject: FW: Inspection



Can you please provide me with the list as soon as possible for the
oocupled?s we will walk with Dean on March 31?.

Thanks.
AP

 

From: Kevin Mo an
Sent: Tuesday, arch 24, 2015 3:19 PM

 

 

 

 

 

 

Case Document 1 Filed 05/10/18 Page 62 of 91

 

To: Am
Cc: Morgan
Subject: Inspection

Pontius

Amy.

I've lost track of what round we?re on but we have one more Inspection on
March Inspection will take lace at 9am so ifthe of?ce can be

closed then that would be helpfu . Frank Giaoobbe will be there. Don't

worry about people shopping you like last time. that shouldn't happen.
Frank will need Dean to take him around.

All occupied units. 1 unit in building 1000, 2 in building 2000 and 1 unit
in each of the other buildings. Once you?ve chosen the units, can you
please send me 019 list?

On the 31 3t. can you have the employees and possibly DGA park in the
garage for building 1000?

Thanks,
Kevin J. Morgan

Morgan Management, LLC
1080 Pittsford-Victor Rd.
Pittsford. NY 14534

Phone: (585) 419-9630
Fax (585)419-9636






THE TION CONTAINED IN THIS ELECTRONIC
MESSA GE AND AN YA 77A CHED IS

IN IENDED ONL YFOR THE PERSONAL AND
CONFIDENTML USE OF THE DESIGNA TED RECIPIENTS
NAMED ABOVE. THIS MESSAGE MA CONTAIN
CONFIDENTIAL OR PROPRIETARY INFORMA TION. IF
THE READER OF THIS MESSAGE IS NOT THE
INTENDED RE CIPIEN 7: YOU ARE HEREBYNO TIFIED

 

 

 

 

 

Case Document 1 Filed 05/10/18 Page RECEIVED 77-IIS DOCUMENT IN
ERROR, AND THA TAN REVIEW, DISSEMINA TION,
DIS TRIBU TION OR COPYING OF THIS MESSAGE IS

5' TRICTL YPROHIBI TED. IF YOU HA VE RECEIVED THIS
COMMUNICA TION IN ERROR, PLEASE REPL TO THE

SENDER IMMEDIA TEL Y. THANK YOU.

 

Case Document 1 Filed 05/10/18 Page 64 of91 

ELHI?li'l'i

Case Document 1 Filed 05/10/18 Page 65 of 91

RE: Rochester Village Marketing Brochure

 

From: Todd Morgan 

To: Pat Oglony Kevin Morgan


Cc: Frank Giaoobbe <fg@auroracap.net>

Date: Tue. 24 Mar 2015 17:17:36 -0400

I will request send to you.

From: Pat Ogiony [mailtozpogiony@auroracap.net]
Sent: Tuesday, March 24, 2015 5:16 PM

To: Kevin Morgan; Todd Morgan

Co: Frank Giacobbe1

Subject: Rochester Village Marketing Brochure

uys,

Attached is the Marketing Brochure I have on ?le for Rochester Village. Can you send me an
updated one that doesn?t have the Feature of Free Cable! Let me know.

Thanks.

Patrick Oglony

Aurora Capital Advisors. LLC
57 Virginia Place

Buffalo, NY 14202

Of?ce: (716)332-4544 Ext 202
Mobile: (716)491-2326

Fax: (716)931-9210



AND DISCIJOSURE OF INFORMATION NOTICE: This electronic transmission, including
an attachments, contains con?dential information belonging to the sender and is intended only for receipt by the

 or entity named. You should not disseminate, disnibute or copy this transmission. Ifyou believe that you
have received this transmission in error, please notify the sender immediately by return e-mail and delete and erase this
transmission from your system. Further, you are hereby noti?ed that any disclosure, copyiigedistribution, use or
dissemination of the transmission or its contents, or the  of any action in reliance on contents of this
transmission is prohibited.

Please note that any views or 'ons sented by this transmission are solely those of the author and do not
necessarily represent those of ora 'tal Advisors, LLC. Any information, facts, or ?gures, ?nancial or otherwise,
which is  presented to a lender or party to a ?nancial transaction has been certi?ed by the Client and is not the
work oduct of Aurora Capital Advisors, LLC, its loyees or subsidiaries. Aurora Capital Advisors, LLC does not
 certify or verify any information containe in this or any subsequent communication.

Case Document 1 Filed 05/10/18 Page 66 of 91

EXHIBIT 10

Case Document 1 Filed 05/10/18 Page 67 of 91

Revised Rochester Village Brochure


From: Todd Morgan 

To: Frank Glaoobbe Pat Oglony <poglony@auroracap.net>
Cc: Kevin Morgan 

Date: Wed. 25 Mar 2015 08:08:57 -0400

Attachments: (2.76 ATT00001.txt (36 bytes)

Disregrd the last one I just sent. Here is the correct one:

Case Document 1 Filed 05/10/18 Page 68 of?91 .

EXHIBIT 

Case Document 1 Filed 05/10/18 Page 69 of 91

ROCH ESTER VILLAGE

APARTMENTS

 

 

Ideally located within commuting distance to
Pittsburgh, Village
Apartments at Park Place has a great deal to
residents. Settled in
Township, we are surrounded by western

downtown Rochester

offer its Cranberry
rolling natural landscape, yet we
still possess many of the conveniences of
city-living. There are several parks closeby
featuring walking trails, playground areas, dog
parks, a skatcpark, a waterpark, and an outdoor
amphitheater which hosts many concerts each
summer. Make yourself at home at Rochester

Village Apartments!

10100 Ke?lecreek Drive Suite 100
Cranberry Township, PA 16066

Phone: 724-553-5570
Fax: 724-553-5573



OFFICE HOURS
Monday-Friday
Saturday
Sunday

9:00am-6:00pm
iO:OOam-5:00pm
12:00pm-5:OOpm

LEASING TERMS

FEATURES

Park?Like Setting
24?Hour Fitness
Center

Gourmet Kitchens with
Islands*

Granite Countertops
Resident Lounge

Grill Stations

Garage Parking Included . Friendly 

Stainless Steel

Appliances


Balconies Sc I atios . Nhnutcs to Graham

Park, 1?79, 8cTurnpike

Free Internet!

Elevators in Each
Building
9 Foot Ceilings

in refer! 1min)

SCHOOL DISTRICT

Seneca Valley
School District

Standard 12?month leases

Short term leases may be
available (fees may apply)

FLOOR PLANS

The Auburn
The Aurora
The Geneva
The Naples
The Ithaca
The Seneca

One Bedroom
One Bedroom
One Bedroom
Two Bedroom
Two Bedroom

Two Bedroom

Visit Us Online!


(20?:ch 9'2? til/{c 1 (Ky-01v wan if? 
/Il\

 

 

 

Case Document 1 Filed 05/10/18 Page 70 of 91

EXHIBIT 1 1

Case Document 1 Filed 05/10/18 Page 71 of 91

RE: Southpointe

From: Todd Morgan 

To: Pat Oglony Frank Glaoobbe Kevin
Morgan 

Date: Wed. 15 Apr 2015 08:40:39 -0400

Attachments: Reserve at Southpolnt T-12 thru Mar 2015.pdf (72.4 kB)


Attached let me know if you need anything further.

From: Pat Ogiony [mailtozpogiony@auroracap.net]
Sent: Monday, April 13, 2015 10:06 AM

To: Todd Morgan; Frank Giacobbel; Kevin Morgan
Subject: RE: Southpointe

0k great - I will double check. Can you please fonlvard me the current T-12 for Southpointe through
March as well.

Thanks.

Patrick Oglony

Aurora Capital Advisers. LLC
57 Virginia Place

Buffalo. NY 14202

Office: (716)332-4544 Ext 202
Mobile: (716)491-2326

Fax: (716)931-9210

 

From: Todd Morgan 11-. :t .:
Sent: Monday, April 13, 2015 10:04 AM
To: Frank Giacobbe; Kevin Morgan

Co: Pat Ogiony

Subject: RE: Southpointe

Update: I?ve been told items involving cable have been removed for Sou?ipointe on the websites.

I checked didn't see anything but if you find anything else. please let me know lwill handle ASAP.
From: Todd Morgan

Sent: Saturday, April 11, 2015 2:24 PM

To: Frank Giacobbel; Kevin Morgan

Co: Pat Oglony

Subject: Re: Southpointe

Below from our marketing dept:

I've removed "rehle int-II tried" from the uni?es wehcife l'll tn: tn remove it
from don't have the software to change the brochure, but I'll have
Phil or Alex work on that Monday.

 

Case Document 1 Filed 05/10/18 Page 72 of 91

From: Frank Glacobbe 
Sent: Friday, April 10. 2015 7:17 PM

To: Kevln Morgan

Co: Pat Oglony; Todd Morgan

Subject: Re: Scuthpolnte

Guys we need to be on our A Game to get max dollars.
Sent from my iPhone

On Apr 10, 2015, at 7:07 PM, Kevin Morgan 
wrote:

Todd wtf. This needs to be changed everywhere.
Sent from my iPhone
On Apr 10, 2015, at 7:01 PM, Frank Giacobbe wrote:

BOOM
Sent from my iPhone
On Apr 10, 2015, at 6:31 PM, Pat Ogiony <29919n1?amamt> wrote:

 

Please remove ?le ?Rent Includes: Cable at the bottom of the page.

Also if you click the link for features and amenities ?Cable Included?.
Lastly, if you click on the property brochure remove ?Cable lncluded.?
Any questions let me know.

Thanks,

Patn'ck Ogiony

Aurora Capital Advisers. LLC

57 Virginia Place

Buffalo. NY 14202



Of?ce: (716)332-4544 Ext 202

Mobile: (716)491-2326
Fax: (716)931-9210

 

 

 

Case Document 1 Filed 05/10/18 Page 73 of 91

EXHIBIT 12

Case Document 1 Filed 05/10/18 Page 74 of 91

Fwd: Emailing - RentRoll05-05-2017 (2).pdf

From: Kevin Morgan 

To: Todd Morgan Pat Oglony
Frank Giaoobbe <fg@auroracap.net>

Date: Fri. 05 May 2017 14:11:09 -0400

Guys - lwas 'ust informed that arbors annual inspection for reserve at southpointe is next Friday. The
woman said eoause this is a Fannie/Freddie deal she needs to pick units to inspect which I've never seen
before. Anywayneed to discuss a game plan.

Begin fomarded message:

I
i From: Todd Morgan <t . 

mo
Date: May 5. 2017 at 12:50:42 PM CDT
1 T0: Kevin Morgan 
Subject: Emailing - RentRoll05-05-2017 (2).pdf

Case Document 1 Filed 05/10/18 Page 75 of 91

EXHIBIT 13

Case Document 1 Filed 05/10/18 Page 76 of 91

Servicing



From: Pat Oglony <pogiony@auroraoap.net>

To: Kevin Morgan Todd Morgan


Cc: Frank Glaoobbe <fg@auroracap.net>

Date: Mon, 15 May 2017 16:07:36 -0400

Attachments: Reserve at Southpointe I T-12 3.31.17.pdf (29.91 kB): Reserve at Southpointe Rent Roll
3.31.17.pdf (169.87 kB); River's Polnte ll - Rent Roll 3.31 .17.pdf (145.62 kB): River?s
Polnte ll YTD lS 03-2017.pdf (14.36 kB): 7100 South Shore March 2017 T-12.pdf (33.1
kB); 7100 South Shore Rent Roll 3.31.17.pdf (113.49 kB)


Guys,
These three deals should be good to go for Servicing:

- Southpointe
- Rivers Polnte ll
- 7100 South Shore

I will have another bunch for you tomorrow including Rochester Village and am hoping to ?nish
everything up Weds or Thurs of this week.

Thanks,

Patrick Ogiony

Aurora Capital Advisers, LLC
57 Virginia Place

Buffalo. NY 14202

Of?ce: (716)332-4544 Ext 202
Mobile: (716)491-2326

Fax: (716)931-9210



CONFIDENTIALIITY AND DISCLOSURE OF INFORMATION NOTICE: This electronic transmission, including
any attachments, contains con?dential infomtaiion belonging to the sender and is intended on] for receipt by the
individual or entity named. You should not disseminate, distribute or copy this transmission. you believe that you
have received this transmission in error, please notify the sender immediately by return e?mail and delete and erase this
transmission from your system Further, you are hereby noti?ed that any disclosure, co distribution, use or
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Case Document 1 Filed 05/10/18 Page 77 of'91

EXHIBIT 14

Case Document 1 Filed 05/10/18 Page 78 of 91

FW: RentRoll05?1 8-201 7.xlsx

 

From: Kevin Morgan 

To: Pat Oglony Frank Glaoobbe <fg@auroracap.net>
Cc: Todd Morgan 

Date: Thu. 18 May 2017 08:30:22 -0400

As discussed.

From: Todd Morgan

Sent: Thursday, May 18, 2017 8:27 AM

To: Kevin Morgan 
Subject: RentRoll05-18-2017.xlsx

FE.

   Case Documentl Filed 05/10/18 Page 7-9 of91

EXHIBIT 15

Case Document 1 Filed 05/10/18 Page 80 of 91

Southpointe 5119/17 Rent Roll

From: Pat Ogiony <pogiony@auroracap.net>

To: Kevln Morgan Frank Giacobbe
<fg@auroracap.net>

Cc: Todd Morgan 

Date: Thu. 18 May 2017 11:08:59 -0400

Attachments: Reserve at Southpointe Rent Roll 5.19.17.pdf (175.98 kB)


Kevin,
See attached.

Thanks,

Pat

?15.53 genera: 
Sent: Thursday, May 18, 2017 8:33 AM

To: Pat Ogiony Frank Giacobbe <fg@auroracap.net>

Cc: Todd Morgan 
Subject: RE: RentRoll05-18-2017.xlsx

Pat when you get in, call me on this.

mm; m. *Mar?gan

Sent: Thursday, May 18, 2017 8:30 AM

To: 'Pat Ogiony' <Wb; Frank Giacobbel 
. 

Cc: Todd Morgan <t .m ti
Subject: FW: RentRoll05-18-2017.xlsx

As discussed.

 

Sent: Thursday, May 18, 2017 8:27 AM
To: Kevin Morgan .. . z.
Subject: RentRoll05-18-2017.xlsx

 

Ca?e Document'l Filed 05/10/18 Page 81 of 91

EXHIBIT 16 

Case Document 1 Filed 05/10/18 Page 82 of 91

RE: Eden Square - Site Inspection Scheduling

From: Frank Giacobbe administrative group


To: Kevin Morgan 

Date: Mon, 24 Oct 2016 15:06:05 -0400

Smart! I like that I didn?t know if velocity had to place them. Just pick one vacant unit on the top
?oor and do it with the window cracked like a half an inch.

Rega rd 5,

Frank Giacobbe

Principal

Aurora Capital Advisors, LLC

57 Virginia Place

Buffalo, NY 14202

Of?ce: (716)332-4544

Mobile: (716)432-9814

Fax: (716)931-9210

From: Kevin Morgan 
Sent: Monday, October 24, 2016 3:04 PM

To: Frank Giacobbe <fg@auroracap.net>

Cc: Pat Ogiony Todd Morgan 
Subject: Re: Eden Square - Site Inspection Scheduling

My concemis thatthe a praiserwillbethere withthe engineering?rmandwill see themplace
canisters in the units. I I will have have my maintenance people place them on Wednesday
instead of waiting till Thursday.

On Oct 24, 2016, at 3:01 PM, Frank Giacobbe wrote:

Some are more strict then others. This is Nicks group. I doubt there is radon in a new build.

Sent ??om my iPhone
On Oct 24, 2016, at 2:21 PM, Kevin Morgan 

 

Site. She said the engineer wants to place them while there.
On Oct 24, 2016, at 2: 12 PM, Pat Ogiony Wane? wrote:

Kevin,

Did you let Anna know to send them to the site or you need me to? Let me know.

Thanks,
Pat

 

 

 

 

 

 

 

Case Document 1 Filed 05/10/18 Page 83 of 91

 
 

eiamgk?e?vih Morgan 11 it 
Sent: Monday, October 24, 2015 2:07 PM
To: Todd Morgan 2.1mm: .1 

Co: Pat Ogiony Frank Giacobbe 
Subject: Re: Eden Square - Site Inspection Scheduling

They are sendingthemto the site.

dd Morgan
wrote:

 

Yep I will choose the units.

Kevin-Do we want the canisters to be sent to our of?ce?

Fromzl Kevin Morgan
Sent: Monday, October 24, 2016 2:04 PM

  

C0: Todd Morgan 1.11 0 [81. 1 (Q - . i Frank Giacobbel
t>
Subject: Re: Eden Square - Site Inspection Scheduling

Todd - can you pick the units and let Shelby and Shannon know? Let's use the
2 vacants that pat mentioned below, 8 occupied ground ?oor units and 2 upper
?oor occupied units. This is for the Thursday inspection.

Thanks,
Kevin
On Oct 24, 2016, at 1:50 PM, Pat Ogiolly wrote:

Kevin/T odd,

See below - we will need to place 8 radon canisters. One in each building in a
ground level unit. I would suggest we do all occupied units for these. In total
 we need to see 12 units. Pick 8 ground level units plus an additional 4 more
 varying units. if you want to include 2 vacant units, I have units 4-212 and 5-
 202 Vacant on my Rent Roll.

 Let me know where you want the radon canisters mailed to? i would think
 right to the property, but let me know who they should be made attention to.

 Any questions please let me know.

 Thanks,
 Pat

       

     

From: Anna Krauze uz. . . - .
 Sent: Monday, October 24, 2016 11:51 AM
 To: Pat Ogiony <pogignW; Shini Paul
 

 Subject: Re: Eden Square - Site Inspection Scheduling

 

 

 

 

 

 

Case Document 1 Filed 05/10/18 Page 84 of 91

Good Morning Pat,

Thank you for con?rming the inspection for this Thursday, the 27th, at
10:30 am. Shini will con?rm the time, depending on her travel

. We will do radon testing in each ofthe 8 buildings and only
in ground ?oor residential units. Please let me know the person and exact
address where we should mail out the canisters.

Best,
3 Anna Krauze

1 Velocity Consulting, Inc.

i 55 West 39th Street, Suite 14M
3 New York, NY 10018

T: 212-629-0690

F: 212-629-0692

On Fri, Oct 21, 2016 at 5:45 PM, Anna Krauze
wrote:
Good A?emoon Kevin,

Velocity has been retained to conduct an engineering inspection on the
above mentioned property in Cranberry Township, PA We were hoping
to set up the inspection for Thursday, the 27th of October, at 10:30 am.

We will need access to all common areas, boiler/mechanical rooms,
roofs - if they are accessible, and 5% of the total number of units. In
addition, we will need to conduct radon testing, May you please let me
know how many residential buildings there are at this property?

Please let me know if you can con?rm the inspection for Thursday, the
27

Thank you,
Anna Krauze

Velocity Consulting, Inc.

55 West 39th Street, Suite MN
New York, NY 10018

T: 212-629-0690

F: 212-629-0692

 

Case Document 1 Filed 05/10/18 Page]85 of91

EXHIBIT l7

Case Document 1 Filed 05/10/18 Page 86 of 91

Re: email to nick



From: Frank Giaoobbe <"Io=mex05lou=exchange administrative group


To: Robert Morgan 

Cc: Kevin Morgan 
Date: Wed. 15 Mar 2017 13:00:57 -0400


I agree with Bob bit everything else seems tight.
Sent from my iPhone

On Mar 15, 2017. at 12:58 PM, Robert Morgan wrote:

i

We should say that if you need any help on this to enhance the credit of the project because of these
issues that the ownwer is willing to put up a letter Of Credit for 12-24 months because we feel con?dent
we will ?ll project with proper people.

From: Kevin Morgan

Sent: Wednesday, March 15, 2017 12:52 PM

To: Frank Giacobbe1 Robert Morgan 1 
Subject: email to nick

 

Nick.

Regarding our current occupancy, l'll give ou an update on what?s unfolded over the last few months.
Prior to the end of the year. we had an rtunate incident take place where a vet that recently returned
from the Middle East committed suicide in building 6000. He committed suicide by shooting himself and in
doing so, the bullet traveled into the wall hittin a sprinkler line which ended up causing water damage in
many of ?re units in that building. This caus us to lose many residents in that building for a couple
reasons. The ?rst reason was stigma of what happened. rumors about someone being murdered were
circulating as well as people just not wanting to live in a building where something like this happened. The
second reason was time to get this building back in service and even thou we were putting residents up
in hotels. they didn't want wait for the insurance claim to run its course an for us to make the repairs.

Not that that wasn't enough, we've also turned over our entire office staff. The staff that we had to et rid
of caused major customer service issues which also made us lose occupancy. They were leaving 
of?ce unattended for days by clocking each other in and leaving, therefore not answering resident work
requests, not sending renewal notices in a timely manner and by not bein in the of?ce. we were not able
to lease to ?ll the vacancy we were building up. We are also seeing certa pockets in Pittsburgh
softening due to new product that has come online and Cranberry is one of those pockets. We still
absolutely believe this is one of the nicest new properties in Cranberry and feel that with our new staff and
leasing season being less than a month away. we will ?ll the vacancy very quickly.

As far as the second question goes, there are a couple reasons for this as well. When we build a new

Case Document 1 Filed 05/10/18 Page 87 of 91

project, we are always preleaelng at least 6 months in advance of when our contractor tells us they will
tum over the building. As most projects go. we build in a cushion because of potential construction delays
which we unfortunately had while building Eden Square. We planned leases to happen on move In dates
but we because we had delays. we allowed the residents to move their belongings into the units and put
them up in hotels until the units/buildings were ready. The other reason for this could be that we received
a verbal that it was ok to occupy but the inspector didn't actually give us the certi?cate of occupancy until
a week or two after the verbal.

One other thing to note is that the construction building numbers are different than the address numbers
that we were assigned by Cranbeny Township that appear on the rent roll. it's very confusing. For
Instance. ?construction' building 6 is actually building 5000 which appears as 5 on the rent roll.
?Construction? building 5 is actually building 6000 which appears as building 6 on the rent roll. The same
?ip flow of construction building number to address happens with building 1 and 2. The rest of the
buildings also have different construction building numbers vs. the addresses. Again, it's confusing how
they assigned the addresses.

if you need Bob and myself to jump on a call. we are happy to do so.

Thanks.

Kevin Morgan

 

1080 Pittsford Victor Road - Pittsford. NY 14534

0    

 

Case Document 1 Filed 05/10/18 Page 88 of 91

.. EXHIBIT 18

Case Document 1 Filed 05/10/18 Page 89 of 91

Umberger, Lori A.

From: Niemi, Gavin M.

Sent: Monday, March 27, 2017 4:38 PM
To: Umberger, Lori A.

Subject: FW: Eden Square

Gavin Nicmi

Risk Distribution 8: Credit
Freddie Mac Multifamily
8100 Jones Branch Drive
Mcl_,ean. VA 22102

o: 703-714?27l1

m: 571?218?7300

From: Hamill. Thomas -1'~'tlioinas homilth i?reddielnac.com>
Date: Wednesday. Mar 15. 2017'. 4:49 PM

To: Deming. Caitlin IE. <~lcaillin deminetii freddiemaccom??
Cc: Nicmi. Gavin M. <Luavin nicmit?ii.freddiemaccom?
Subject: FW: Eden Square

 

Ihaven?t read the whole thing yet. See below.

Tum Hamill

Senior Regional Director Underwriting and redir
200 Park Avenue

Nerv York, NY I0166

212-418?8925 (Of?ce)

9] 7- 748-38 77 (Cell)

emu

From: Michael Tremiti 
Sent: Wednesday, March 15, 2017 4:41 PM

To: Hamill, Thomas 

Subject: FW: Eden Square

See below. Thanks

Michael J. Tremiti Vice President of Finance


p: 585.419.9630 -

1080 Pittsford Victor Road Pittsford, NY 14534

 

From: Kevin Morgan
Sent: Wednesday, March 15, 2017 3:55 PM

Case Document 1 Filed 05/10/18 Page 90 of 91

To: Michael Tremiti 
Cc: Robert Morgan 
Subject: FW: Eden Square

Mike I sent this to Nick but wanted to also forward this to you since Tom contacted you directly.
Thanks,

Kevin

From: Kevin Morgan

Sent: Wednesday, March 15, 2017 3:19 PM

To: 'Nick Cassino? <Nick.Cassino@berkadia.com>

Cc: Robert Morgan 
Subject: Eden Square

 

Nick,

Regarding our current occupancy, I?ll give you an update on what?s unfolded over the last few months. Prior to the end
of the year, we had an unfortunate incident take place where a veteran that recently returned from the Middle East
committed suicide in building 6000. He committed suicide by shooting himself and in doing so, the bullet traveled into
the wall hitting a sprinkler line which ended up causing water damage in many of the units in that building. This caused
us to lose residents in that building for a couple reasons. The first reason was the stigma of what happened, rumors
about someone being murdered were circulating as well as peoplejust not wanting to live in a building where something
like this happened. The second reason was time to get this building back in service and even though we were putting
residents up in hotels, they didn't want wait for the insurance claim to run its course and for us to make the

repairs. This incident slipped through the cracks in our Risk Management department as it is a very unusual situation
and they did not notify me when it happened. I found out about the incident in January when our contractor contacted
me to discuss starting the repairs.

Not that that wasn?t enough, we?ve also turned over our entire office staff. The staff that we had to get rid of caused
major customer service issues which also made us lose occupancy. They were leaving the office unattended for days by
clocking each other in and leaving, therefore not answering resident work requests, not sending renewal notices in a
timely manner and by not being in the office, we were not able to lease to fill the vacancy we were building up. We are
also seeing certain pockets in Pittsburgh softening due to new product that has come online and Cranberry is one of
those pockets. We still absolutely believe this is one of the nicest new properties in Cranberry and feel that with our
new staff and leasing season being less than a month away, we will fill the vacancy very quickly.

As far as the second move in dates vs. of 0 dates, there are a couple reasons for this as well. When we build a new
project, we are always preleasing at least 6 months in advance of when our contractor tells us they will turn over the
building. As most projects go, we build in a cushion because of potential construction delays which we unfortunately
had while building Eden Square. The move in dates on the rent roll are the planned move in dates. We planned leases
to happen on move in dates but because we had delays in getting buildings turned over to us, we allowed the residents
to move their belongings into the units and we put them up in hotels until the units/buildings were ready. The other
reason for this is that we were given a verbal that it was ok to occupy but the inspector didn?t actually hand us the
certificate of occupancy until a week or two after the verbal. As long as the life safety was in place and we had people
that needed to move in by a certain date, they allowed us to do so.

Another thing to note is that the construction building numbers are different than the address numbers that we were
assigned by Cranberry Township that appear on the rent roll. It?s very confusing. For instance, ?construction? building 6
is actually building 5000 which appears as 5 on the rent roll. ?Construction? building 5 is actually building 6000 which
appears as building 6 on the rent roll. The same flip flop of construction building number to address happens with

2

Case Document 1 Filed 05/10/18 Page 91 of 91

building 1 and 2. The rest of the buildings also have different construction building numbers vs. the addresses. Again,
it?s confusing how they assigned the addresses.

One of our corporate 2016 initiatives was the conversion our software programs from Timberline to Yardi and the
implementation of Yieldstar. Pittsburgh was our last region that went live and even though it was last, we had yet
another very poor conversion. Yardi did the conversion and between training issues and data transfer issueswell was an understatement.

We have a great relationship with Berkadia and Freddie Mac. Bob and I want to emphasize that while this deal is not
going the way either of us had anticipated, we stand behind it 100%. We don?t have any other loans with Freddie that
aren?t performing and we know we can get this one back on track. If it helps solidify things, we would put up a letter of

credit until this deal is re-stabilized.

Please let me know if you want us tojump on a call.

Thanks

Kevin Morgan

kevin.morgan@ morga ncommunities.com

 

p: 585.419.9630

  

11:1;4 -1- i.

1080 Pittsford Victor Road - Pittsford, NY 14534