An executive who presided over the collapse of MCA Financial Corp. that cost investors more than $250 million pleaded guilty Tuesday in Detroit to charges that he conspired to commit fraud and lied in corporate statements.
Patrick Quinlan Sr., 56, of Grosse Pointe Farms, Mich., faces up to 10 years in prison and $500,000 in fines under a plea agreement with federal prosecutors. The former chairman and chief executive of the failed Michigan mortgage firm also was ordered to pay $256.6 million in restitution to investors and institutional lenders.
Including Quinlan, six of the seven MCA officers charged following the collapse have pleaded guilty in the case.
"We will climb every rung of a corporate ladder ... to root out corporate fraud," Deputy Atty. Gen. James Comey said in a statement. "Honest and truthful financial reporting is the only type of reporting that will be tolerated by the Justice Department and expected by the financial marketplace."
As part of the plea, Quinlan acknowledged that he participated in decisions to conduct the affairs of MCA in a fraudulent manner and helped implement those decisions, the U.S. attorney's office said. U.S. District Judge Nancy Edmunds set Quinlan's sentencing for June 22.
Prosecutors say that beginning in 1993, Mortgage Corp. of America -- an MCA subsidiary -- fraudulently sold securities representing interests in mortgages and land contracts that it owned and assembled into investment pools.
Mortgage Corp. of America was accused of misrepresenting the past performance of the pools, inflating values of the mortgage and land contract interests, and using the genuine pool assets for its own corporate purposes.
Michigan state regulators seized MCA Financial in January 1999 after the company shut down its operations.