By Stephen J. Kotz
It sits forlorn and forgotten, obscured by overgrown shrubs and weeds, barely visible from the street.
Long declared unfit for human habitation by Sag Harbor Village, the Morpurgo house, which is tucked behind the John Jermain Memorial Library on Union Street, may be the closest thing Sag Harbor has to a haunted house.
The subject of a decades-long fight between sisters Anselm and Helga Morpurgo, the house was eventually sold at auction in 2007. But it then became entangled in a nightmarish mortgage fraud scheme that landed former Suffolk County Legislator George O. Guldi in prison, and the man who held an $800,000 mortgage for the property, trying to foreclose on it, so he and his investors could obtain the deed to the house and either rebuild it or raze it and start anew.
But this week, Samuel Glass, a Brooklyn attorney, who led that group of investors, said, he has washed his hands of the place and sold the mortgage to another New York attorney, Joel Zweig, who is leading yet another investor group in the effort to realize a profit from it.
“I loved that piece of property,” Mr. Glass said on Friday. “But I was dealing with 13 investors and after awhile, they got disgusted. We got caught in the maze.”
Mr. Glass, who said he believed Sag Harbor was still a good place for real estate investors to put their money, said “I would have loved to have taken title to that place.”
He said at this point, the house, because of its dilapidated condition, was probably a teardown, but he said if the new owners work with the village, they will be able to build “a beautiful house next to the library.”
Mr. Zweig was unavailable for comment for this article.
Despite the legal troubles swirling around the house, the question remains why Sag Harbor Village has taken a hands-off approach to the property.
The most recent entry from village officials in a file on the property in the village Building Department dates to February 16, 2007, when Anselm Morpurgo still lived there.
In a five-page report then Fire Marshal Tim Platt, who toured the house with Al Daniels, who was the building inspector at the time, pointed out numerous health and safety concerns, from a wood burning stove with a large gap in its flue, to structurally unsound stairways, crumbling plaster, and missing window panes.
In his own letter to the village board accompanying that report, Mr. Daniels cites. His own list of concerns, including the fact that the interior of the building was colder than the outside temperature, which was only 16 degrees on the day of the visit. He listed the elecrical wiring, water supply as concerns and added that the house was strewn with garbage and raccoon feces.
“Obviously, there are pictures showing the dangerous and unsafe conditions that exist in this structure,” Mr. Daniels wrote. “The rodent infestation presents a danger to the health, safety, morals and general welfare of the public and the people that occupy this structure. This structure is definitely unfit for the purpose for which it may be lawfully be used.
“In closing, this building is unsafe, dangerous and beyond repair,” he concluded.
On Tuesday, building inspector Jose Escalante, who joined the village in the summer, and has been dealing with a building boom that includes major renovations and new construction across the village, said he had not received any complaints about the Morpurgo house and did not believe it was in his authority to launch an investigation on his own.
Mayor Brian Gilbride conceded that the village has taken a cautious approach in large part because it is concerned about liability.
“The frustrating part about this job is you can walk by that place and say it is terrible, but it is private property,” he said.
He pointed out that the property has been owned by a series of limited liability corporations. “Are they taking any personal liability? No,” he said. “But the minute we start doing something to that property, we become part of the liability.”
“I always thought the library was going to end up with it, and it would become a moot issue,” he added. In the 1990s, the library board tried to purchase the property to expand, but Anselm Morpurgo resisted its efforts. The library eventually abandoned the idea and turned its attention first to a new site next to Mashashimuet Park before settling on a major expansion and renovation of its existing building.
In the meantime, Anselm Morpurgo’s sister, Helga Morpurgo, tried to force her sister to sell the property, in which they had a shared ownership. That battle eventually ended with a court-ordered auction of the property in 2007 for $1.4 million.
Mr. Glass said that he was defrauded by two attorneys, Brandon Lisi of Dix Hills, and Dustin Dente of Rosalyn, who bought the property at auction and came to him for financing and then stopped paying the mortgage. He and his investors have sought to foreclose on the property in state Supreme Court, but that proceeding will now be turned over to Mr. Zweig’s group.
Mr. Guldi, who was Mr. Lisi’s attorney for the purchase of the property, was found guilty of mortgage fraud in 2011 in what Suffolk County District Attorney Thomas Spota desribed as the largest case of mortgage fraud in the county’s history. He was sentenced to four to 12 years in prison.
Just last month, Mr. Guldi’s request for parole was denied. The parole board, which heard his case, concluded that he showed a lack of remorse for his crimes, which could lead to him being a repeat offender. He can next apply for parole in 2016.