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Oct 21, 2009 11:04 AMPublication: The Southampton Press

Quogue mayor resigns days after pleading guilty to felony fraud charge

Oct 21, 2009 11:04 AM

Quogue Village Mayor George Motz resigned on Friday, three days after he pleaded guilty in federal court to felony securities fraud for his role in a “cherry picking” scheme that illegally pocketed some $2.2 million for his Manhattan investment firm.

The nearly two dozen people in attendance at the monthly Village Board meeting on Friday, October 16, gave Mr. Motz a standing ovation as he left Village Hall and the position he held since 2002.

“It is with deep sadness and sorrow and with apologies to my community that I formally announce that I will be stepping down as your mayor effective today,” he said, reading from a prepared statement at the beginning of the meeting, before immediately departing. “Nothing that I have done over the past seven and a half years has given me more pleasure and satisfaction than representing you and our very special village.”

Before Mr. Motz left the meeting, Deputy Mayor Randy Cardo thanked him for “the great work [he has] done and [his] service to the community.” Mr. Motz, who was on the verge of tears, then hugged and shook the hands of other village officials before leaving.

Mr. Cardo presided over the remainder of the 40-minute meeting.

According to New York State law, a person convicted of a felony cannot hold public office. Authorities have said that the criminal charges are unrelated to Mr. Motz’s work as mayor of Quogue Village.

It is unclear who will succeed Mr. Motz as mayor. Mr. Motz earned $12,000 annually as mayor and did not accept benefits as part of his compensation. His term expires on June 30, 2010.

Village resident Dick Gardner asked what could be done to show support for the former mayor, who many village residents credit for helping preserve Quogue’s historic Jessup family homestead, also known as the Weathervane.

Quogue Village Clerk Marcia Koziarz said that residents could pick up slips of paper as they exited the meeting with instructions to send letters testifying to Mr. Motz’s character to his Manhattan attorney, G. Robert Gage. The letters are to be addressed to U.S. District Justice Arthur D. Spatt, the judge who will make the final determination as to Mr. Motz’s sentence.

Mr. Motz is scheduled to be sentenced on January 29, 2010. He faces up to 25 years in prison.

Theresa Fontana, owner of The Lily Pad, a consignment shop on Main Street in Quogue, noted in an e-mail this week that she is selling “Friends of George,” or “FOG,” stickers at her shop for $2 each. She said she has already sold 100 stickers, adding that they were paid for by Mr. Motz’s longtime friend and fellow Quogue resident Alexander G. Hesterberg.

Ms. Fontana said that all proceeds from the sticker sales will benefit the Motz family.

“We here in the Village of Quogue, and especially at The Lily Pad, want George to know how much he is admired,” Ms. Fontana said.

Mr. Motz was indicted in August 2008 after a U.S. Securities and Exchange Commission investigation revealed that he had “cherry picked” profitable investments for his Manhattan investment firm, Melhado, Flynn & Associates (MFA). On Thursday, October 15, the company itself pleaded guilty to one count of securities fraud for its part in the scheme that illegally earned the firm more than $2.2 million.

Mr. Motz faces up to 25 years in prison, the maximum sentence allowed for securities fraud, but in court last week prosecutors said federal sentencing guidelines would put Mr. Motz’s sentence somewhere between 12.5 and 15.5 years. He is currently free on $500,000 bail.

MFA, meanwhile, is facing a fine of up to $184 million, according to federal authorities.

Originally, Mr. Motz was also accused of doctoring paperwork to cover up the scheme, but the U.S. attorney’s office agreed to drop that charge.

Prosecutors said Mr. Motz illegally took in more than $2.2 million for MFA between November 2000 and June 2005. He is the president and chief executive officer of the company.

Prior to entering his guilty plea, Mr. Motz admitted to buying blocks of stocks and waiting until the end of the day to see if the trades were profitable. If the trades were profitable, Mr. Motz told the court, he would assign them to the MFA proprietary account. If they were not profitable, Mr. Motz assigned them to one of his clients’ discretionary accounts.

In other news, Daryl Blowes, a representative of IQM2, a Ronkonkoma-based meeting management company, approached the Village Board on Friday to offer his firm’s service to the village. Specifically, the company could make information from public meetings, including minutes and video, available on the village’s website.

He said that for a fee, his company would be able to streamline information, including past resolutions, allowing the village “to provide it on demand” to residents. Depending on the software required, the service could cost the village between $250 and $500 a month, according to Mr. Blowes.

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Without a doubt, this is a sad day for Quogue. Mr. Motz has been an extraordinary advocate for Quogue, a dedicated employee of MFA, an overwhelmingly kind human being and good friend to all. Poor penmanship, disorganized calendar, and dated ties do not a felon make. This is just wrong.
By East-ender (1), jamesport on Oct 16, 09 5:24 PM
No, I think what he did as that "employee of MFA" was the wrong part, and his willingness to plead to the one charge in satisfaction of all charges, is pretty damning.

Not that it's not a sad day for Quogue, but he did it, he admits that he did it, and he's willing to accept his punishment -- which, I suspect, will be far from the maximum, as it sounds as if he's going to work with the prosecution toward other prosecutions.
By Frank Wheeler (1826), Northampton on Oct 16, 09 6:36 PM
Now if only another resident of Quogue who runs a municipality would do likewise -- and take responsibility.
By JimmyKBond (156), Hampton Bays on Oct 18, 09 4:25 PM
My thoughts are with the former mayors family.
By hbtwin (1), Hampton Bays on Oct 16, 09 7:26 PM
Along with the other Wall Street fatcats he abused his position within the market. While you work a 9 to 5 and invest in stocks to keep America's free market economy going he just dipped into the till. He's guilty and got caught. If he didn't get caught it would be business as usual... for a thief. Have fun in jail.
By lirider (288), Westhampton Beach on Oct 17, 09 6:25 AM
Mr. Motz is a criminal and deserves what he gets. Quogue will be better off without him. His term as mayor of Quogue was self serving. People like this have no regard for others. The citizens of Quogue gave him a standing O, he should have been pelted with rotton tomatoes
By kpjc (161), east quogue on Oct 17, 09 9:35 AM
Well, aren't you the compassionate one? Motz was not a good mayor, he was a great mayor and had you enough knowledge regarding past mayors of Quogue, you would know that. There was nothing "self serving" about his tenure whatsoever, neither did he treat his village as if it were his kingdom and its residents merely serfs. Perhaps you would do better to concentrate on Southampton Town.
By quogue (12), southampton on Oct 17, 09 10:00 AM
YEA, So how many of you who gave him a standing O would let him invest your money???
By kpjc (161), east quogue on Oct 17, 09 11:14 AM
I met him once, and thought he was a great guy, I wish him and his family comfort right now!
By leavingli66 (8), southampton on Oct 17, 09 11:57 AM
1 member liked this comment
Mayor Motz did the right thing by admitting his guilt. That shows incredible character. I believe he is a good person who did a very bad thing. As Mayor, you can't please everyone, but but he was sincere in his intentions and efforts. He has hell to pay for what he did and I wish him strength to get through it and make his amends to his family and society. Instead of throwing stones we should pray for him.
By sunsetter (7), QUOGUE on Oct 17, 09 12:28 PM
Mr Motz was/is a nice guy, but so was Bernie Matoff right up until the time he was arrested. There something fundementally wrong with people who steal from their clients. Jail time is deserved.
By EastEnd68 (888), Westhampton on Oct 17, 09 1:02 PM
He stole other peoples money and got caught, I hope he rots in jail
By DJ9222 (85), southampton on Oct 17, 09 1:21 PM
I don't know anything about George Motz. A number of posters have spoken of him highly but it is ingenuous to think that he didn't commit the crime to which he has pled guilty.

What I find most interesting is that there is no plea bargain in place. Virtually every guilty plea includes one. Why is he pleading guilty nakedly? He actually could be sentenced to 15 years in prison.

Would it not be wonderful if his plea without negotiation were indicative of his contrition.

By highhatsize (4217), East Quogue on Oct 17, 09 1:33 PM
FWIW: the Beach Blogger is reporting that Motz originally rejected a favorable plea deal, and by the time he decided to accept it, that offer was no longer on the table. The Madoff situation seems to have queered it, though I'm not quite sure how.
By Frank Wheeler (1826), Northampton on Oct 19, 09 10:30 AM
To Frank Wheeler:

Thanks for the reference. I suppose that investment house executives found guilty of fraud will be treated more toughly for a few years until the public astonishment at Madoff's Ponzi scheme has abatted.
By highhatsize (4217), East Quogue on Oct 26, 09 12:18 AM
my prayers are with mr.motz and his family.
By concerned east ender (49), Sag Harbor on Oct 17, 09 2:59 PM
Not much to say here, I am feeling pain for his family
By Stephen M Takach (3), Quogue on Oct 17, 09 7:50 PM
This isa tough thing for family of course....but what was he thinking????????????? In 2009 Paper Trails are a mile long...this isnt like Gramps hardware store where you can take in some cash.....

Arrogance (wont get caught) and greed does them all in ....Sad way to finish life...God Bless Motz family......
By Quogonian (14), Quogue on Oct 18, 09 11:39 AM
George Motz is a wonderful, generous man who did a very dumb thing. Anyone who has known him over these last 40+ years will attest to his numerous acts of kindness, his genuine love for our community and his interest in safeguarding our way of life. He was a great Mayor.

George has accepted responsibility. He will be sentenced. Let us pray for him and for his family as they deal with the humiliation and the shame (especially residing in a small community). A hand of friendship instead ...more
By JimmyKBond (156), Hampton Bays on Oct 18, 09 4:22 PM
I am baffled by all of these remarks . . . truly baffled. I too could be the kindest, most benevolent, most "giving" person if only I didn't have to worry about how to support my self, my family, and those who are truly in need in the community. Former mayor Motz's family did, indeed, benefit from his illegal activities. Nice guy? Many people think that about Bill McGintee because they "know him". HINT - if you are going into public service do not try to decieve those who you have a fiduciary ...more
By Board Watcher (534), East Hampton on Oct 18, 09 10:00 PM
well I guess we know how your "heart" works ... lots of anger issues, no doubt
By JimmyKBond (156), Hampton Bays on Oct 20, 09 1:12 PM
sad day for the family prayers with them
By dianne (4), springs on Oct 20, 09 8:55 AM
It's hard to feel sorry for Mr. Motz. After all, he designed and executed a scheme to defraud otherwise trusting people of their money. Now his crimes will end his legal career and it's possible that he'll go to jail. This is as it should be.

But what about the shennanegans in Southampton Town Hall? Are you all going to cry for Linda Kabot, Chris Nuzzi and that Johnny-come-lately from up island, Jim Malone??? I think that Evita said "Don't cry for me Argentina" Isn't it about time ...more
By Dodger (161), Southampton Village on Oct 25, 09 10:38 AM
Amazing... a guy steels from investors and gets a standing O. Maybe I'll go out and vandalize a car and convince my neighborhood to throw me a parade.
Where are our standards???
By double standard (1506), quogue on Oct 29, 09 3:46 PM
Stole money from senior citizens? Shame.
By OTISFORDSUCKS (34), Quogue on May 14, 10 7:39 PM