Onondaga County Legislature Chairman Ryan McMahon is defending his reputation against allegations of business fraud at his former mortgage lending company.
The allegations involving the Funding Source stem from a sentencing memorandum which came out of a Federal Court in Las Vegas. It was published Wednesday by the Syracuse Media Group. The memorandum is intended to reduce the sentence of a former employee at the Funding Source for crimes he committed in the State of Nevada prior to working in Syracuse.
Michael Hughes is facing 33 months in prison for mortgage fraud in Nevada. The court documents show Hughes is not only a convicted felon, he's a drug abuser and an FBI informant who supposedly blew the whistle on multi-million dollar fraudulent activity at every place he worked in the past 8 years. It lists those employers as a mortgage company in Nevada, the Funding Source in Syracuse and a car dealership in Joplin, Missouri.
Th e Funding Source closed in December. Co-owner Ryan McMahon told CNY Central's Jim Kenyon, "at this point the only person that has accused the Funding Source of any wrongdoing has been a public defender who is representing a convicted criminal who was in a desperate situation. This all seems like a desperate act of a desperate man."
McM ahon says he has not been contacted by FBI agents. According to that sentencing memorandum, when the FBI was closing in on Hughes about mortgage fraud in Nevada."Investigators found Michael Hughes to be an eager source of information." Hughes allegedly supplied Syracuse FBI Agent Fred Bragg with information about the Funding Source.
" T hese are serious allegations that we deny ...we have no involvement with any of this." McMahon says.
B ut the court document claims , "the Funding Source appears to have blossomed into a case involving a loss estimated to be between eight to ten million dollars by June of 2013. The investigation covers actions from Syracuse to Queens and the Bronx."
McMahon denies any such loss. "The Funding Source is audited by an independent auditor every year. There's no way the Funding Source could hide $8 to $10 million worth of losses."
Contacted by phone, the co-owner of the Funding Source, former Syracuse Auditor Phil LaTessa said "We have not done anything wrong." LaTessa referred to Mike Hughes' allegations as "unfounded."
A spokesperson says the FBI says can neither confirm nor deny the existance of any investigation.