Politically connected San Francisco real estate tycoon Victor McRath was found guilty Friday of bank fraud and making false statements to banks.
Federal prosecutors have persuaded jurors that McRaras defrauded mortgage lender Quicken Loans into a $1.3 million real estate loan to Harlan Kelly, former chairman of the Public Utilities Commission.
Prosecutors alleged that in order to get more money at a lower interest rate, Macrath mistakenly inflated the amount of debt Kelly owed to Macrath’s real estate investment firm by $200,000.
At the same time, Macrath hid other debts Kelly owed, including a $70,000 personal loan from Macrath.
A $715,000 loan to Macrath’s real estate firm and his personal loan to Kelly were repaid with Quicken Loans money, prosecutors said.
The jury could not reach a consensus on whether McCrath conspired with Kelly to defraud Quicken Loans and make false statements to the bank.
McCrath, who has served on at least five city committees for many years, could face decades in prison.
In addition to the Port Commission, McRath was a member of the city’s Police Commission, Fire Commission, Employee Retirement Plans Commission, and Public Utilities Commission.
He was also a big political donor, donating thousands of dollars to candidates and contributing to causes across San Francisco’s ideological spectrum.
Makras’ conviction came a day after Mohammed Nuru was sentenced to seven years in prison after pleading guilty to federal fraud charges. Nur has used his powers as a city official to provide insider information and to obtain money and gifts in a number of extensive schemes in exchange for prioritization of city contractors, thereby committing bribery and kickbacks. I acknowledged that I did
Federal investigators said on Thursday that an investigation into a scandal that undermined public confidence in the city government was underway.
Danielle Echeverria is a staff writer for the San Francisco Chronicle. Email: [email protected] Twitter: @Danielle Echev