During jury selection on Friday for a case regarding his involvement in a multimillion-dollar mortgage fraud scheme, former Democratic Suffolk County Legislator George Guldi pled guilty to 35 felony charges.
Guldi, from Westhampton Beach, pled guilty to 34 counts of grand larceny and one charge of scheme to defraud in relation to an $82 million mortgage fraud scheme that involved over 60 homes and commercial properties on Long Island, most of them in Southampton, according to the Suffolk County District Attorney’s Office.
One of the properties tied to the case was the 6 Union Street, Sag Harbor property formerly owned by Anselm and Helga Morpurgo.
This was to be Guldi’s second criminal trial this year. He has been incarcerated since March after being found guilty of grand larceny and insurance fraud in an unrelated case. In that case, prosecutors argued Guldi stole money paid by his insurance carrier that should have been held in escrow for the reconstruction of his Westhampton Beach residence, which was destroyed in a house fire in 2008.
Guldi was sentenced to four to 12 years in prison for that conviction. According to the Suffolk County District Attorney’s Office, in return for pleading guilty to all of the remaining charges against him, Judge James F.X. Doyle promised Guldi a one-to-three year sentence, which will run concurrently with the sentence he received earlier this year.
Doyle’s decision, which will be finalized at a sentencing hearing on Wednesday, August 31, in Suffolk County Criminal Court in Riverhead, was not what Suffolk County District Attorney Thomas Spota had hoped for.
In a press release issued on Friday, Spota said he was “extremely disappointed that, over our objection, the Judge has promised the defendant a sentence that is completely inadequate to punish him and deter the massive mortgage fraud that has so severely impacted our local economy.”
Spota said he has directed Mortgage Fraud Unit prosecutor Thalia Stavrides to ask Judge Doyle to sentence Guldi to the maximum term of incarceration, which is eight and one-third to 25 years consecutive to the four to 12 year sentence he is already serving.
Guldi’s co-defendant in the upcoming trail, Dix Hills attorney Brandon Lisi, also pled guilty on Friday, admitting his role in creating millions of fraudulent mortgage deals to victimize Washington Mutual Bank, JP Morgan Chase and other lenders to buy commercial and residential properties in Sag Harbor, Cold Spring Harbor, Southampton and Huntington.
Lisi was one of two buyers present at the 2007 auction of the Morpurgo home in Sag Harbor, which sold at court-ordered auction for $1.4 million. Attorney Samuel Glass, who with a group of lenders was defrauded by Lisi and Guldi, among others, in the purchase of the Union Street property, said his group hopes to take ownership of the property once the case has been settled, but will have to test market conditions before deciding whether or not to sell the home as is or renovate the dilapidated residence.
Lisi pled guilty to two counts of grand larceny in the first degree and one charge of grand larceny in the second degree. Similar to Guldi, Judge Doyle promised Lisi a one-to-three years’ sentence.
Lisi is also facing separate federal charges in an unrelated case regarding bank and wire fraud charges.
“Mr. Guldi’s greed leaves a trail of financial ruin heretofore unseen in this county,” said Spota. “His scheme to defraud lenders through the use of straw purchasers, false documents and phony loan applications duped financial institutions into loaning him and his co-defendants millions of dollars for houses that today are in default.”
Guldi was a Suffolk County Legislator representing the second legislative district from 1994 to 2003 when he lost a re-election bid to current Suffolk County Legislator Jay Schneiderman.