A former Suffolk legislator, a Manhattan (New York City)" id="PLGEO100100804010000">Manhattan dominatrix and several other people were charged Wednesday in what Suffolk prosecutors said was a $50 million web of mortgage fraud that began in a Manhattan fetish club and ended with scores of pricey Southampton homes ownerless and in foreclosure.
George Guldi, 57, of Westhampton Beach, a private attorney since
leaving the Suffolk Legislature in 2003, acted as the lawyer in dozens
of fraudulent transactions that made him millions, prosecutors said.
Guldi and others took out mortgages for more than 50 East End homes on
behalf of fake buyers, pocketed the money, then left the houses to
languish once payments came due, prosecutors said.
Thomas Spota" id="PEPLT007331">Thomas Spota said Wednesday at a Riverhead news conference. "These defendants went on a seven-year-long mortgage fraud spree."
Prosecutors said the fake borrowers, or straw buyers, were recruited by
a Manhattan couple, Donald MacPherson, 65, and Carrie Coakley, 38, from
among the clientele of their Manhattan sexual fetish fantasy business,
Arena Studios. Coakley's work as a dominatrix was featured in the 1998
According to Arena Studio's Web site, the Broome Street company
provides space for dominatrixes to meet clients, boasts a "beautifully
decorated and fully equipped private dungeon," and, among other items,
rents out "medieval torture" implements, bondage furniture and three
kinds of whips.
In return for payments of $5,000 to $10,000, clients of the dungeon and
others posed on paper as buyers of expensive homes all over the Town of
Southampton, Spota said. The clients' income and employment information
were overstated so they would qualify for the millions of dollars in
loans needed to buy the properties, Spota said.
For example, in a 2008 mortgage application for a home at 982 Noyack
Path, prosecutors said the straw buyer falsely claimed to be a
$45,000-per-month employee of Coakley and MacPherson's production
company, Maximum Restraint Films.
Spota did not release the names or number of straw buyers involved in
the scheme, but said they would likely face charges in the future.
After MacPherson brokered new mortgages with various lenders,
participants of the scheme pocketed the cash - sometimes repeating the
process several times on the same homes, Spota said.
He said the scammers' efforts were made possible by the work of Ethan
Ellner, 49, a Plainview lawyer who prosecutors said created fake titles
that falsely claimed no money was owed on the homes. Straw buyers were
thus able to dupe lenders into issuing new mortgages without first
paying off sums previously owed on the house, prosecutors said.
Ellner's lawyer, Raymond Perini of Hauppauge, said his client pleaded
not guilty to charges of first-degree grand larceny, scheme to defraud
and other charges, but declined to comment further.
Coakley and MacPherson's lawyer, Steven Wilutis of Miller Place, said
his clients denied all the charges and disputed claims that straw
buyers were used. "Anybody involved in the purchases of these houses
were legitimate people," he said. "Foreclosure doesn't mean a crime was
Guldi and MacPherson pleaded not guilty to first-degree grand larceny
and other charges in Southampton Village Justice Court. Coakley pleaded
not guilty to one count of first-degree scheme to defraud.
A Roslyn lawyer, Dustin Dente, 37, who prosecutors said oversaw some of
the scheme's closings, pleaded not guilty to first-degree grand larceny
Prosecutors also charged Gary Small, 41, of Farmingville, and Victor Jinete, 34, of East Islip" id="PLGEO100100102600659">East Islip,
in connection with what they said was a separate mortgage fraud scheme
conducted in western Suffolk, also with Ellner's participation. Both
pleaded not guilty to second-degree attempted mortgage fraud and other
charges. Their lawyers could not be reached for comment.
Dente's lawyer, John Carmen of Garden City, declined to comment.
Guldi's lawyer, John Diffley of Whitestone, did not respond to a
request for comment.
Ellner, Coakley and MacPherson posted $25,000 cash bail. Guldi was
released on $20,000 cash bail, and Dente posted bail of $10,000.
Staff writer Mitchell Freedman contributed to this story.