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May 5, 2010 10:04 AMPublication: The Southampton Press

Motz sentenced to 8 years in federal prison

May 5, 2010 10:04 AM

CENTRAL ISLIP—Former Quogue Village Mayor George Motz was sentenced to eight years in federal prison last week, months after pleading guilty to securities fraud for a scheme in which he bilked clients of his Manhattan investment firm out of $2.4 million.

According to federal sentencing guidelines, Mr. Motz, 68, could have received between 11¼ and 14 years in prison.

Mr. Motz, who was released after posting $1 million bond, now has until June 30 to get his affairs in order and surrender to authorities. He will begin his sentence at that time at an as yet unnamed federal prison.

“I am so, so sorry about all this,” Mr. Motz said in a brief statement to the court before his sentencing last Wednesday, April 28. “I don’t know what else to say. I feel horrible about it all.”

Sometime later this month, a judge will determine the amount of restitution that Mr. Motz must pay to his victims, along with additional fines. Due to a statute of limitations, the amount of restitution will be something less than the $2.4 million Mr. Motz stole, according to Judge Arthur D. Spatt.

Mr. Motz, who hung his head after Judge Spatt handed down the sentence at around 3 p.m. on April 28, declined to comment after leaving the U.S. District Court in Central Islip. About a dozen of his friends and family members, including his wife, Kittric, who serves as Quogue Village justice, embraced Mr. Motz as he was entering the courtroom’s gallery after the sentencing.

Judge Spatt ordered that Mr. Motz, who had been free on $500,000 bond since being indicted in August 2008, be confined to his Quogue home with an electronic bracelet until the start of his prison sentence. While Judge Spatt was deciding bail, Ms. Motz told the court that she was now in contract to sell the couple’s $2.5 million home, located on Bayview Drive.

It is unclear whether or not Mr. Motz will appeal his sentence. “I’m not going to comment,” said G. Robert Gage Jr., Mr. Motz’s attorney, as he was walking out of the courtroom after sentencing last Wednesday.

It was not immediately clear when Mr. Motz would be eligible for parole, or whether or not he will be able to knock off any time for good behavior. Those issues will be addressed after the amount of restitution is determined later this spring.

None of Mr. Motz’s estimated 240 victims attended last week’s sentencing.

Mr. Gage, an attorney with Gage Spencer & Fleming in Manhattan, spent several hours last week arguing that Judge Spatt should disregard the federal sentencing guidelines and issue a shorter sentence based on Mr. Motz’s community service and the nature of his crime.

Mr. Gage reiterated last Wednesday an argument that he made during a special court hearing for his client that was held in mid-April: that the five-year “cherry-picking” scheme that Mr. Motz ran at his firm, Melhado, Flynn & Associates (MFA), while illegal, had essentially no victims and resulted in no actual monetary losses. In fact, Mr. Gage argued, the accounts that Mr. Motz managed for his investors were profitable in the long run.

But Judge Spatt eventually sided with federal prosecutor, Roger Burlingame, and ruled that Mr. Motz did some $2.4 million in damage to his investors over the course of the scheme, which began in 2000 and lasted until 2005. The amount of money and the number of victims are factors in determining the sentence for securities fraud.

In October, Mr. Motz, who was still mayor at the time, pleaded guilty before Justice Spatt to one count of securities fraud, a felony. In a statement at that hearing, Mr. Motz, who was president and CEO of the now-defunct MFA, 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 assign them to the MFA proprietary account. If they were not, he assigned them to one of his clients’ discretionary accounts.

Judge Spatt said in court that one of Mr. Motz’s employees, who was not identified, tipped off the U.S. Securities and Exchange Commission to suspicious activity at MFA. A subsequent investigation by the commission led to Mr. Motz’s indictment in August 2008.

In court last week, Mr. Gage highlighted the fact that Mr. Motz did not “pocket” the money, but put it in MFA accounts in order to keep the firm afloat. Mr. Burlingame argued that Mr. Motz benefited indirectly by bolstering the company.

Mr. Gage also told the court, before the sentencing, that Mr. Motz’s service as mayor of Quogue Village, a post he held from 2002 until he stepped down in the fall following his guilty plea, should be taken into consideration. The attorney also pointed out that Mr. Motz served two years in the U.S. Army as a casualty notification officer during the Vietnam War—a fact that Judge Spatt said played heavily into his consideration of the sentence.

Mr. Gage noted in court that Mr. Motz has been unemployed for some time, and that his family is in a “very difficult financial situation.” Ms. Motz also told the court that she is selling the couple’s home.

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Motz was a wolf in sheeps clothing when he was mayor of Quogue. This wasn't community service as his attorney argued in court today. Motz needed the title of mayor to better gain the trust of people so he could steal from them. It's also the reason he became president of the Surf Club, lots of wealth people to network with. If your going to be a successful thief you clock yourself in respectability.
Does anybody really believe this is the first time he stole from his clients or just the first ...more
By westerner (2), westhampton on Apr 28, 10 4:44 PM
3 members liked this comment
typo above should read cloak
By westerner (2), westhampton on Apr 28, 10 4:49 PM
Probably a good thing the Judge did not look into his "service" as Mayor - he would have gotten more time.

And will Mrs. Motz be resigning now? Or will Quogue have a Judge married to a convicted felon? And why not!
By G (303), Southampton on Apr 28, 10 5:02 PM
3 members liked this comment
What about the 2.4 million??
Were did that go and how are the people gping to get re-paid?
She is a Village justice and what she knew nothing?
He should have recived a lot longer term
By sjd (420), Westhampton Beach on Apr 28, 10 5:55 PM
3 members liked this comment
Why on earth should him being a mayor get him a shorter sentence? If anything I would double the sentece. Mayor's are not permitted special sentences when they steal. And the fact that his wife is a judge. I'm sure she didn't know a thing about all that money. They should be ashamed of themselves. A thief is a thief, no matter your day job.
By icecreamman (303), Southampton on Apr 29, 10 8:20 AM
3 members liked this comment
Why in the world would you said you were sure she did not know???
By sjd (420), Westhampton Beach on Apr 29, 10 2:09 PM
I'm sure icecreamman had tongue in cheek!
By Doug (14), Hampton Bays on Apr 29, 10 6:32 PM
Given former Mayor Motz' exposure, 8 years is reasonably light.

Tough for one of his age, though. What are his prospects for parole and an earlier release?
By Frank Wheeler (1729), Northampton on Apr 29, 10 10:19 AM
1 member liked this comment
Last night I was chatting with a buddy of mine who has a Quogue vacation home. He is a Surf Club member. He noted that Motz treated being Surf Club president as if emperor-for-life, demonstrating little regard for members he felt did not meet his rigorous Quogian social standards. The comment above about thieves cloaking themselves in respectability, + social pretense, is very, very true. Motz will likely serve his "bit" at a minimum security facility like Allenwood, yet may have a tough time when ...more
By colonelshousealum (11), westhampton beach on Apr 29, 10 12:10 PM
2 members liked this comment
'AMF', yep that's 'AMF'.
By ride the truth wave (125), southampton on Apr 29, 10 1:49 PM
Curious the other big news in Quogue is not on the Site yet......Seems the felonious Mayors Village Board allowed no less that 7 people to install geo-tubes on the beach. Now they are going to Court as our Town Trustees are on the ball.

Looks like business as usual in Quogue.....and why not!
By G (303), Southampton on Apr 29, 10 4:17 PM
1 member liked this comment
Hey Kittric Motz, what comes around, goes around. Seems Quogue Village has their own Constitution in "Protecting the Established Order" in the village. Shame.
By OTISFORDSUCKS (34), Quogue on Apr 30, 10 1:30 PM
Hey otisfordsucks - I didn't notice that Kittric was on trial. Leave her alone!
By barnbabe (64), westhampton beach on Apr 30, 10 2:40 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By sjd (420), Westhampton Beach on Apr 30, 10 9:14 PM
1 member liked this comment
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By sjd (420), Westhampton Beach on Apr 30, 10 9:14 PM
So you say she knew nothing about all this?
You want her as a justice?
You have to be kidding!!!!!
By sjd (420), Westhampton Beach on Apr 30, 10 9:14 PM
1 member liked this comment
Hey barnbabe - ya want a Judge who is married to a convicted felon? A convicted felon who is headed to prison? A Judge who was "upset by the verdict" handed down to her husband? An impartial Judge would have taken the verdict the way they are handed down.

Oh, your in WHB - never mind.......You folks like screwed up systems & crooks there too.
By G (303), Southampton on Apr 30, 10 3:50 PM
1 member liked this comment
Wow! I never knew how nasty and unforgiving people in Quogue are. Oops G is from Southampton. Wonder if G and Otis sucks would be brave enough to print their real names. Seems like Motz did plead guilty. How about you guys?
I'd like to know who to avoid.
By Rhoda D (12), Quogue on Apr 30, 10 6:30 PM
He wasn't a convicted felon when she married him - give her a chance to deal with her own personal life before you (in all of your wisdom!) jump all over her.

And since she's his wife - not "an impartial judge" on this case - I would think she had every right to be upset with the verdict.
By barnbabe (64), westhampton beach on Apr 30, 10 9:37 PM
No, it was because she was a beneficiary of his crime. how could she not be? Is she a a complete idiot? Is the restitution coming from both of them?
By nellie (451), sag harbor on May 1, 10 8:01 PM
barnbabe: Hey GENIUS, he pled "GUILTY".
By OTISFORDSUCKS (34), Quogue on May 1, 10 9:34 AM
Rhonda D: ...and the wifey didn't know anything? Hmmm....
By OTISFORDSUCKS (34), Quogue on May 1, 10 9:36 AM
Should your wife/family be punished for your wrongs? I think the sentence was severe in light of the crime. It seems the judge wanted to make an example of him, much like Martha Stewart. Where are the Enron guys who ruined lives or the fat bankers who did the same? I do believe a punishment is called for - not 8 years on my taxpayer dime. How does that serve anyone?
By Rhoda D (12), Quogue on May 1, 10 11:36 AM
If Mr. Motz were a minority from Quogue, and robbed the local 7-Eleven for $50, instead of robbing 240 people of $2.4million, he would not have had the luxury of two months at home to "get his affairs in order,right?" The justice system in country is nuts.
By Old School (22), Southampton on May 1, 10 11:40 AM
1 member liked this comment
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By barnbabe (64), westhampton beach on May 1, 10 1:02 PM
Sounds like you need to walke up.
You think his wife knew nothing??
SURE
Why did he get 2 months to put things in order???
Did he have to work with HER to hide the 2.4 million??
Why are you not concerned about the people he screwed?
How are thy getting paid back??
By sjd (420), Westhampton Beach on May 2, 10 10:32 AM
barnbabe: Ok, we all know, that you're friends of the Motz's, but please do try your best to stay on topic. Stop playing with the chickens, get out of the barn, and see the sun shinning! Sounds like you need to re-read the news article. Guilty by association, and the wifey didn't know? Hmmm....
By OTISFORDSUCKS (34), Quogue on May 2, 10 9:34 AM
I am not a friend of the Motz family - I just don't like the negativity you spew, you don't care who you aim it at . . .
By barnbabe (64), westhampton beach on May 2, 10 10:38 PM
1 member liked this comment
barnbabe: "Birds of a feather, flock together". Just the facts lady.
By OTISFORDSUCKS (34), Quogue on May 3, 10 9:59 AM
Which facts? The real facts or those according to YOU? Your opinionated, misogynic rantings tell us more about you than the case.
By Rhoda D (12), Quogue on May 3, 10 10:46 AM
2 members liked this comment
I have been reading these posts for a long time, and one thing is clear to me. Not one of you knows who George is, not one of you knows the facts of this case beyond the bloated figures the prosecution has been spoon feeding the media. Not one of his clients took the Governments numerous offers to join a victim list. There is no question that George Motz made mistakes in so far as trading policy and procedure. He is a wonderful man who made a mistake, no more, no less.
So why don’t all of ...more
By FOG (5), Westhampton on May 3, 10 11:05 AM
1 member liked this comment
Amen!
By Rhoda D (12), Quogue on May 3, 10 2:13 PM
As a family member of one of the victims on the governments list of victims (and beleive me there is a list, and as we are victims of the crime, it is not a published list, but we are kept informed every step of the way on the progress of the prosecution) there were other types of crimes that were perpetraated by this "broker", and millions of $$$ evaporated so he could live well,
"polish" his image and "massage" his ego. JUst because not everything has been published, I can tell you there ...more
By Chrono (5), Cedar Grove on May 3, 10 1:02 PM
"Other Crimes" that zealous Federal prosecutors overlooked, "swindled elderly widows" that never came forward for the prosecution, and "so much more" from an anonymous Cedar Grove resident. The so called victim list that you refer to is simply the names of every client that he ever worked with. Do you know how many of those clients (including your family member) that accepted the invitation to speak out and say how they were cheated? Do you Chrono? NONE. Not one single client.
You know what ...more
By FOG (5), Westhampton on May 3, 10 3:04 PM
I knew George when he was a fellow trainee at a fine brokerage firm on Wall Street. George beat me in every department - brains, background, experience and the manner he carried himself. It's my belief that 40 years later something snapped and all I admired in him took the backseat to dishonesty. A mutual friend from those days wrote me today,"Justice is cruel! George was tried at a bad time. I feel sorry for him and his family. George was a good guy." So correct and so sad. Justice was served though!
By kent (1), Wilmington on May 3, 10 5:19 PM
1 member liked this comment
The family accepted the invitation of the court and prosecution, that as a victim, were their rights. Many pages of information was sent to the Judge. That was the way this family decided to speak and describe how they were cheated. It would have been to physically taxing for a 90 some yeaar old wildow to attend the court procedings, and watch someone that had been so trusted try and weeazel out of what had been done. This is what one family decided to do. Perhaps the other 200 did something ...more
By Chrono (5), Cedar Grove on May 3, 10 6:02 PM
She did not have to be there. I was in the court room when the judge asked for the names of the victims and the prosecution said they have none. We all appreciate your input, but I am sorry to say that this last post of yours makes it impossible for me to take anything you say seriously. Oh and Chrono, in the future learn to spell a big word like weasel before you use it to attack someone’s character. It is much more effective and gives the reader the impression that you are an educated participant ...more
By FOG (5), Westhampton on May 4, 10 9:56 AM
The key point missed by everyone - including the press - is that there were never any allegations by the prosecution that Mr. Motz actually stole anything from his clients, or that he personally benefitted from his trading actions. Read carefully, people: the charge to which he plead guilty was for favoring certain clients over other clients, or "cherry picking" the winning trades to the favored clients. It was the other clients who benefitted from the practice, not him personally. If you want ...more
By satellitek (5), East Quugue on May 3, 10 6:15 PM
satellitek,

That was not the charge, and The Press did not miss the point. Here is a description of what Mr. Motz pleaded guilty to and what was alleged:

Quogue Village mayor pleads guilty to securities fraud, Oct 14, 09 12:16 PM
http://www.27east.com/story_detail.cfm?id=239527

Prosecutors said he illegally took in more than $1.4 million for his investment company, Melhado, Flynn & Associates (MFA), between November 2000 and June 2005. He is the president and chief ...more
By BOReilly (130), 27east Web Editor on May 4, 10 11:06 AM
Thank you BoReilly. I am not arguing the point that that Mr. Motz plead guilty to allocating profitable day trades to his firm account. The problem is that this article says in part that “…the amount of restitution will be something less than the $2.4 million Mr. Motz stole…” -- the operative word being “stole” and also “bilked” as is used as a synonym of allocation in the same article - which has not even been charged at any time. And as a result of that misleading statement virtually all of ...more
By satellitek (5), East Quugue on May 4, 10 10:26 PM
You cannot be for real. I'm glad he didn't cheat your 90 year old mother. Frankly, your comments are as disgusting as his acts.
By nellie (451), sag harbor on May 3, 10 7:22 PM
Ah, get over yourself. Nobody gives a damn if you are disgusted. From a legal standpoint, this case is actually fascinating. Even convicted felons have rights, did you know that? Motz was originally charged on three felonies, and two of them were dropped. He willingly plead guilty to the one charge – cherry picking- and then was given a sentence based on all THREE charges, rather than the ONE that he was guilty for. As I said before, the prosecution hasn’t ever even CHARGED that he personally ...more
By satellitek (5), East Quugue on May 4, 10 6:00 AM
1 member liked this comment
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By FOG (5), Westhampton on May 4, 10 2:50 PM
"satellitek"
Why is this the only thing you have made a comment on?
Who are you his wife?
Buy the way you speak sounds like you are to me.
He is a Bum and should be in jail for longer that what he got
By sjd (420), Westhampton Beach on May 7, 10 12:37 AM
He plead GUILTY!!
By nellie (451), sag harbor on May 8, 10 10:28 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By OTISFORDSUCKS (34), Quogue on May 4, 10 12:16 PM
FOG: Senior citizens were ripped-off? Shame. You can visit him (G.M.) on the weekends in jail.
By OTISFORDSUCKS (34), Quogue on May 4, 10 12:26 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By FOG (5), Westhampton on May 4, 10 12:42 PM
satellitek: Maybe you'll find these words fascinating, and read carefully; "cherry-picking, wrongdoing, securities fraud, seniors ripped-off", oh, and one more.............................."GUILTY".
By OTISFORDSUCKS (34), Quogue on May 4, 10 8:51 PM
OTISFORDSUCKS, you live in the biggest glass house of all. Everybody knows it. Stop throwing stones. Try to muster something of substance.
By satellitek (5), East Quugue on May 4, 10 10:31 PM
FOG: your comments were removed. Please restate what your earlier comments were, as they must have been removed rather quickly. If they contained inappropriate content please be clean. Thanks.
By satellitek (5), East Quugue on May 4, 10 10:28 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By FOG (5), Westhampton on May 5, 10 8:13 AM
the coward keeps taking everything i say down.
By FOG (5), Westhampton on May 5, 10 8:48 AM
Its a joke. I am done with this site. I have no interest in letting him make fun of a familys pain. Grandchildren have to be told they are losing their grandfather and this guy is only interested in exploiting that pain. Its sad. Thanks for your insights satellitek, Kent, Rhoda and Barn. See you around Mark.
By FOG (5), Westhampton on May 5, 10 9:07 AM
satellitek: Thank you for being so nice. The key word here is "GUILTY". You too, can visit G.M. in the "BIG HOUSE".
By OTISFORDSUCKS (34), Quogue on May 5, 10 6:39 AM
Kudos to the Editor for clarifying the reality of the charges.

Could he shed any light on the legality of a sitting Judge being married to a convicted Felon? Not saying she should divorce him, or that she new about the Fraud. A simple question about legality, that's all.

By G (303), Southampton on May 5, 10 6:46 AM
G: I agree. How could she not know? Looks, acts, and smells like a skunk. Hmmm....
By OTISFORDSUCKS (34), Quogue on May 5, 10 6:26 PM
OTISFORDSUCKS should be reported to the SPCA....for beating a dead horse.
Obviously he carries a grudge.
By Rhoda D (12), Quogue on May 6, 10 9:01 AM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By MaryMac (43), Riverhead on May 6, 10 1:15 PM
Rhonda D: Remember, try your best to stay on topic. That's eight (8) years (YIKES!) in a Federal Prison, and the key word is "GUILTY".
By OTISFORDSUCKS (34), Quogue on May 7, 10 9:36 AM
Sad -- look the three hands in the photograph. Contorted a bit?

Look at the body postures.

The downward glances to escape . . . . ?

Sad.

Compassion here please.
By PBR (4813), Southampton on May 7, 10 6:58 PM
PBR: Looking down at the ground for sure. Hard to look at the camera, when one pleads "GUILTY". Kittric should "step-down".
By OTISFORDSUCKS (34), Quogue on May 8, 10 9:54 AM
PBR: They don't look too happy. That's eight (8) years, in a Federal Prison.
By OTISFORDSUCKS (34), Quogue on May 10, 10 9:42 AM
nellie: I believe, that their house is now up for sale. Me a buyer? Thanks, but no thanks.
By OTISFORDSUCKS (34), Quogue on May 11, 10 9:50 AM
Rhonda D: Shame,shame,shame on George Motz.
By OTISFORDSUCKS (34), Quogue on May 13, 10 8:54 AM
Motz Family: Shame.
By OTISFORDSUCKS (34), Quogue on Jun 6, 10 7:52 PM
Motz has now appealed his sentence. He will wear his ankle bracelet for a few more months before they slam the iron door on him. The unmitigated hubris which controls this old man and has for his entire life just won't let him accept his guilt and his light sentence and do his time. FOG must be one of the 'friends of George' who has enabled this sleazeball to operate in Quogue and in NYC for all these years. Remember folks, the Feds dropped the very serious charge of tampering with evidence in a ...more
By xquoguite (4), new york on Jun 9, 10 8:45 PM
Judge Motz is a fine and kind hearted lady, who is an fair and unbiased Judge in Town that needs her. I do not know her husband well. But do not judge her any less than a good person.
By 1percent (40), Quogue on Jul 9, 10 8:22 PM
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