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Feb 3, 2010 8:59 AMPublication: The Southampton Press

Former Quogue Village mayor's sentencing pushed back

Feb 3, 2010 8:59 AM

Friday’s sentencing of former Quogue Village Mayor George Motz, who faces up to 25 years in prison after pleading guilty to securities fraud in October, was pushed back to an undetermined date, as Mr. Motz’s attorney requested a special hearing in which he is likely to argue for a shorter jail term for his client.

In October, Mr. Motz, who was then the mayor of Quogue, pleaded guilty to one count of securities fraud, a felony, in U.S. District Court in Central Islip, for his role in a “cherry-picking” scheme that netted some $2.2 million for his Manhattan investment company, Melhado, Flynn & Associates, also known as MFA, between November 2000 and June 2005. He resigned as mayor three days after his guilty plea, after holding the position since 2002.

Judge Arthur D. Spatt was originally scheduled to sentence Mr. Motz in U.S. District Court in Central Islip on the afternoon of Friday, January 29. But the court appearance was cancelled after Mr. Motz’s attorney, G. Robert Gage Jr., requested a “Fatico hearing,” a special court appearance in which both the defense and prosecution can present evidence in order to argue over the appropriate length of Mr. Motz’s sentence.

The request, which was sent by Mr. Gage to Judge Spatt on Tuesday, January 26, states that the defense objects to some of the facts of the case, namely exactly how much money Mr. Motz stole and how many of his investors he victimized.

Mr. Gage, who did not return calls seeking comment this week, could argue that these figures were less than those given in a Presentence Investigation Report, or PSR, prepared for Judge Spatt by the U.S. Probation Office on January 15. The report presents facts related to a crime, and could guide a judge as he decides a sentence.

“The portions of the PSR that we object to include the loss amount, the number of victims, Mr. Motz’s role in the offense, and his acceptance of responsibility,” Mr. Gage wrote in the request, a copy of which was obtained on Friday.

It is unclear when Mr. Motz’s next hearing will be held. A letter dated January 27 and sent to Judge Spatt from the U.S. Attorney’s Office, which is prosecuting the case, suggests that both sides will call expert witnesses during the hearing, and states that the witnesses are available only on certain dates this spring, the earliest of which is March 15. Three other dates in April are also listed on the letter.

When reached Tuesday evening, Mr. Motz said he was unable to speak about the upcoming hearing.

“I have no comment to make,” he said. “The comments will all be made at the Fatico hearing.”

Assistant U.S. Attorney Roger Burlingame, the prosecutor in the case against Mr. Motz, said he could not comment on the sentencing, and James J. Fonti, the U.S. Probation officer who prepared the PSR for Judge Spatt, said he could not comment on its contents.

Mr. Motz was originally accused of fraud in an August 2008 indictment, following an investigation of his firm by the U.S. Securities and Exchange Commission. Mr. Motz’s crimes had nothing to do with his position as mayor, according to authorities.

At his October 13 court appearance, 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 said he would then assign them to the MFA proprietary account. If the trades lost money, he assigned them to one of his clients’ discretionary accounts.

“I took the profits from those [trades].... with the intention of benefitting my firm, MFA,” he said during his October court appearance.

Mr. Motz’s guilty plea on that day was not part of any deal with the U.S. Attorney’s office that would guarantee Mr. Motz a reduced sentence, although prosecutors did agree to drop a second felony charge, of document alteration, that was filed against him when he was first indicted. Investigators had claimed that he doctored paperwork in an attempt to cover up the fraud.

Mr. Motz was facing a sentence of up to 45 years in prison if convicted of both charges—up to 25 years on the securities fraud count, and up to 20 years on the document alteration charge—plus fines. After his plea, he faced up to 25 years in prison, the maximum sentence allowed for securities fraud, but prosecutors have said that federal sentencing guidelines would put Mr. Motz’s sentence somewhere between 12 and a half and 15 and a half years.

After his plea, Mr. Motz was released on the same $500,000 bond that he had posted the day after his indictment. In an emotional announcement made to the Quogue Village Board the following Friday, October 16, Mr. Motz stepped down as mayor, more than eight months before his term was set to expire on June 30, 2010. On November 20, Village Trustee Peter Sartorius was appointed as Mr. Motz’s replacement.

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"the defense objects to some of the facts of the case, namely exactly how much money Mr. Motz stole and how many of his investors he victimized."

How 'bout we cut to the chase -- how much restitution has been made?
By Frank Wheeler (1826), Northampton on Jan 29, 10 11:04 PM
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By Chrono (5), Cedar Grove on Jan 30, 10 4:44 PM
Let Mr Motz argue his position for a time reduction from jail. It does not seem right that he is still free.
By EastEnd68 (888), Westhampton on Jan 30, 10 9:59 PM
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I think it would be smart to check in now while arguing....Why not get started and it would also relieve anxiety...being in there is never as bad as GOING to be in there ....I believe Martha Stewart did that...
By Quogonian (14), Quogue on Jan 31, 10 9:38 AM
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By Chrono (5), Cedar Grove on Feb 1, 10 7:28 AM
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Mr. Motz should be wary of allowing his victims to come to court and explain exactly how long and in how many ways he stole from them. This strategy will backfire on him.
By xquoguite (4), new york on Feb 2, 10 2:36 PM
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Apparently Mr. Motz has enough $$$ that he can afford a clever lawyer.So perhaps he did take as much $$$ as the Feds. prosecuted him for.
By Chrono (5), Cedar Grove on Feb 2, 10 5:10 PM
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It's not a clever thing, it's the law and right that you have. Everyone has a right to a sentencing trial -
By BIGjimbo12 (201), East Quogue on Feb 3, 10 1:28 PM