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Mar 25, 2009 4:53 PMPublication: The Southampton Press

Former Suffolk legislator and four others arraigned in mortgage fraud scheme

Mar 25, 2009 4:53 PM

Former Suffolk County Legislator George O. Guldi of Westhampton Beach and four other people were arraigned Wednesday for their alleged role in a $50 million mortgage fraud scheme targeting more than 50 properties on the East End.

Mr. Guldi and three others are accused of leading a fraud scheme that dates back to 2002. Another leading figure, Donald MacPherson, is the owner of Magic’s Pub and the Sunset Cafe in Westhampton Beach—and, according to District Attorney Thomas Spota, he also runs a bondage and sadomasochistic sex club in Manhattan where “straw buyers” were recruited to obtain fraudulent mortgages.

Roslyn attorney Dustin Dente and Nassau County businessman Ethan Ellner were arrested for also playing a major role in the fraud scheme, according to Mr. Spota. Carrie Coakley of Manhattan, Mr. MacPherson’s wife, is the fifth co-conspirator charged.

Mr. Spota explained the complex scheme in detail during a press conference held Wednesday afternoon in Riverhead, about 90 minutes before the five suspects were to be arraigned on felony charges in Southampton Town Justice Court.

“They used a complex web of fraud and deceit,” Mr. Spota said. “They went on a seven-year-long mortgage fraud spree.”

He explained that Mr. Guldi and Mr. MacPherson recruited “straw buyers”—those who agree to provide their names and personal information to help another party in obtaining mortgage loans—at Mr. MacPherson’s Arena Studios Inc., located on Broome Street in Manhattan. Mr. Spota said the men paid some of the clients who visited the “studio” $10,000 each in exchange for their private information.

Arena Studios is a business where clients pay money in exchange for fulfilling their sexual fantasies, which typically involve physical abuse and bondage. The website for Mr. MacPherson’s club describes Arena Studios as a place offering “a unique opportunity for couples to explore their boundaries together in a beautifully decorated and fully equipped private dungeon play space.” The site also states that the club can cater to parties and offers demonstrations.

The DA’s office said suspects who participated as straw buyers are expected to be arrested in the near future.

Mr. Guldi, an attorney whose Westhampton Beach law office was raided by investigators with the DA’s office in February, pleaded not guilty Wednesday afternoon to three counts of first-degree grand larceny and one count of first-degree scheme to defraud. He served as legislator of Suffolk County’s 2nd Legislative District, which runs from East Moriches to Montauk, from 1993 until 2003. He was released on $20,000 cash bail and will return to court on April 24.

Mr. Guldi’s attorneys, John Diffley of Whitestone and Katherine Huang of Manhattan, asked Town Justice Deborah Kooperstein that Mr. Guldi be released on his own recognizance, but Justice Kooperstein denied that request.

Mr. MacPherson, a part-time Westhampton Beach resident, pleaded not guilty to two counts of first-degree grand larceny and one count of first-degree scheme to defraud, all felonies. He was released on $25,000 cash bail and will appear in court again on April 27.

“I pled not guilty because I’m not guilty,” Mr. MacPherson said as he left Southampton Town Justice Court on Wednesday.

Additionally, Ms. Coakley, Mr. Dente and Mr. Ellner all pleaded not guilty to similar charges. Mr. Dente was charged with first-degree grand larceny, a felony, and posted $5,000 bail. Mr. Ellner was charged with three counts of first-degree grand larceny and one count of first-degree scheme to defraud, both felonies, and posted $25,000 cash bail. Ms. Coakley was charged with one count of first-degree scheme to defraud, a felony, and posted $25,000 cash bail.

According to Robert Clifford, a spokesman for the district attorney, Mr. Guldi was involved with fraudulent activities involving several properties on the East End, most of them in Southampton Town. Mr. Guldi was served with a lawsuit in February by Wachovia Federal Savings Bank. The lawsuit charges that Mr. Guldi pocketed $1.8 million through a fraudulent scheme involving a mortgage on a home on Deerfield Road in Water Mill. Mr. Dente and Mr. Ellner were listed as defendants in that suit, too.

Mr. MacPherson, who also publishes the Soho Journal in Manhattan, has 12 mortgages on properties in Southampton Town that are now going into foreclosure. He has not made payments on those mortgages for at least one year, according to court records.

Mr. Clifford explained that each grand larceny count carries with it between 8 1/3 and 25 years in prison, while the scheme to defraud charge carries with it between 16 months and four years in prison.

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Could those 12 mortgages on properties in Southampton Town include those 1110 and others on N.Sea Road? ...No payments in a year since closed down for harboring illegal aliens and built and owned at one time and maybe still by Beleska and Yonlanda Bernado????
By UNITED states CITIZEN (207), SOUTHAMPTON on Mar 25, 09 9:45 PM
WOW! More scandals and Political crimes. Could the years of critical articles in the Soho Journal, written by both McPherson & Guldi - that chapped Spotas a#s finally be coming to a head? Looks like now the chaps come off......

It will be interesting to see the list of "straw buyers" recruited at the S7M club in New York. I wonder who else locally who got roped into this or will be tied to it in the ensuing investigation. It all seems a bit kinky, not like stampeding cattle through the ...more
By G (342), Southampton on Mar 26, 09 9:54 AM
My, my, my George.... what goes around does indeed come around. Squirm and slime yourself out of this one honey..... Sorry, but for all those you've hurt and cheated... this one's for you!
By IBCLC (1), Southampton on Mar 26, 09 10:04 AM
Keep digging Mr. DA - you've been spoonfed a lot of information about another "ring" that ran up at least 12 defaults in Southampton and Brookhaven Town - maybe not big names but certainly a few to raise some eyebrows.
By North of Highway (280), Westhampton Beach on Mar 26, 09 10:32 AM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By EQme (112), East Quogue on Mar 26, 09 11:10 AM
This could explain why the Magic's burgers have been terrible since the place sold!
By barnbabe (64), westhampton beach on Mar 26, 09 11:35 AM
Bet those grill marks look ore like a riding crop ...ehh Macpherson!
By Hambone (514), New York on Nov 12, 09 10:53 PM
was my message removed for a reason?? all I said was that George is a real creep...referred to marriage as "the state between divorces".....gives you an idea of the type person he is. I feel sorry for his children.
By EQme (112), East Quogue on Mar 26, 09 12:52 PM
George has certainly had a run of bad luck since he left public office.
By Lefty46 (56), Westhampton on Mar 26, 09 1:04 PM
To EQme: Yes, your original post was removed as inappropriate. This one is marginal, but phrased a bit differently, so we'll leave it.
By Joseph Shaw, Executive Editor (206), Hampton Bays on Mar 26, 09 1:28 PM
very interesting, Mr. Shaw...my original wasn't any worse than others posted from people venting about George; take IBCLC's comment, for example. In any event, I'll just leave it that I agree wholeheartedly (and so much more appropriately) with Mike Hartley. P.S. You really need a professional proofreader for your paper; the mistakes are endless.
By EQme (112), East Quogue on Mar 26, 09 6:15 PM
Wow, EQme -- what a compelling argument. "Others do it, and by the way, you're a crappy proofreader!"

How old are you any how?

Obviously, former Legislator Guldi has ruffled some feathers somewhere along the line. Instead of trying to stomp on him, let's see where this goes -- this being America, there's supposed to be a presumption of innocence.
By Frank Wheeler (1826), Northampton on Mar 27, 09 9:58 AM
Wheeler ......... You don't get sent down to the principal's office for doing something right ......... you must be a relative! ......... he's running around with Donald - that is not a warm fuzzy duo!
By BIGjimbo12 (201), East Quogue on Mar 27, 09 3:37 PM
I "must be a relative" because I stand with the Constitution?!?

Whether Mr. Guldi and Mr. MacPherson are "warm and fuzzy" types has nothing to do with anything. They've been arrested, charged and will have their day in court -- that's how it's supposed to work in this country.

No, not a relative of anyone involved in this case.
By Frank Wheeler (1826), Northampton on Mar 27, 09 6:38 PM
It's interesting how the Press feels the need to describe Arena Studios in such detail when it really has nothing to do with the case. It only supports the critical articles written by MacPherson about Press reporting.
By Jane (4), Remsenburg on Mar 29, 09 9:54 AM
We have this opportunity to post our comments thanks to the Constitution....most of us are grateful for this. Just as these men will have their day in court, we are entitled to our opinions regarding their character (or the lack thereof) and astounding greed.
It works both ways in this country.
Unfortunately, while our opinions are free, their day in court will cost taxpayers a small fortune.
By EQme (112), East Quogue on Mar 29, 09 10:35 AM
"Unfortunately, while our opinions are free, their day in court will cost
taxpayers a small fortune."

So you're suggesting that these accused individuals should not be brought to the bar because prosecuting them "will cost taxpayers a small fortune?!?"

You're not very good at this sort of thing, are you? Try putting your brain in gear before engaging the keyboard.

Assuming the charges of mortgage fraud can be sustained, do you have any idea what this has cost so far?
By Frank Wheeler (1826), Northampton on Mar 30, 09 1:34 AM
By sjd (420), Westhampton Beach on Mar 30, 09 11:10 AM
What the..? Frank, you should try putting your seething anger aside on this site. You are nasty and your attacks on other readers - not just me- are unwarranted and infantile.
My comment regarding the cost of prosecuting these men in no way insinuates that it shouldn't happen; quite the opposite.
By EQme (112), East Quogue on Mar 30, 09 11:52 AM
The average guy would have been offered the same bail deals
By westhamptonboy (227), Westhampton on Mar 30, 09 12:02 PM
dam and i needed a lawyer for to get paid from that nice guy that helped Southampton Hospital MR KRAUS, who had me rescue a dead Hard drive, i spent 2 weeks recovering and 1 week organizing as requested, with a hand written letter.. even the nice guys are crooks.. any idea what 40hrs a week cost me?? geez everyones a crook in this town.. my uncle is just targeted cause of his great deeds he did for this town and others such as stony brook?? any one ever look at the good stuff??? o ya forgot kraus ...more
By nyredwine (4), southampton on Mar 30, 09 7:42 PM
Dear dear EQme -- why is it that you presume to know anyone's mood ("seething anger") yet you have such difficulty expressing yourself clearly and directly?

I'm gratified that you are not advocating "nul pros." The cost is what it is, and needs to be done. Somewhere some people are out a great deal of money on this scheme, and those responsible should be brought to the bar.

Now, try making something "nasty" and "infantile" out of that!

By Frank Wheeler (1826), Northampton on Mar 31, 09 7:16 PM