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Code enforcement officers say they were not surprised by mortgage fraud arrests

Publication: The Southampton Press
By Jessica DiNapoli   May 22, 2009 11:00 AM

While some were shocked to learn that a part-time Westhampton Beach businessman and a former Suffolk County legislator were accused of being involved in a $50 million mortgage fraud scheme targeting the East End, a select few said they were surprised that it took so long for authorities to start making arrests.

Former and current code enforcement officers with both Southampton Town and Westhampton Beach Village agreed that some of the warning signs of mortgage fraud—namely, the altering of names on deeds from individuals to corporations—were apparent long before investigators with the Suffolk County district attorney’s office began making arrests last month.

More specifically, code enforcement officers said they first began suspecting that something was amiss when Donald Clark MacPherson, the owner of at least a dozen homes throughout Southampton Town, all of which are now going into foreclosure, was cited for dozens of code violations on his properties and, for the most part, avoided paying fines by either suing the town or removing his name from the titles of his properties.

“He was up there as one [landlord] with the most amount of summons issued to him,” said Steve Frano, a former town code enforcement officer from Westhampton Beach, about his experiences with Mr. MacPherson and his many properties.

“I’m not surprised,” added Bridget Napoli, the code enforcement officer with Westhampton Beach Village, who has crossed paths with Mr. MacPherson several times over the past few years. “I’m just surprised that it took so long,” she added, referring to his arrest last month.

Southampton Town Code Enforcement officer David Betts, who said he is also familiar with the violations that have accumulated on properties owned by Mr. MacPherson, said he was not surprised to learn that Mr. MacPherson was one of five people arrested as part of an alleged multimillion-dollar mortgage fraud scheme.

“It didn’t take a rocket scientist to figure out there was something going on,” Mr. Betts said.

According to Ms. Napoli, Mr. MacPherson had been cited numerous times for violations at his houses on Dune Road and Bishop Place in Westhampton Beach, though he avoided paying fines by switching his name on the property’s title to that of a corporation or another person. She said he would complete that transaction without securing a new certificate of occupancy, which is a violation of the village code.

One of the maneuvers allegedly used by Mr. MacPherson, according to authorities and former code enforcement personnel, is that he would switch the name that was listed on a property’s title to a corporate name, such as 1768 Majors Path Co., 58 Shinnecock Hills Road Co., or 127 Highland Co., in order to delay—or possibly avoid—paying fines.

Town officials said they were unable to confirm the exact number of summonses that had been given to Mr. MacPherson, explaining that many of his properties are still listed under corporate names. Still, they said that he has been issued dozens of summonses for various violations, ranging from overcrowding to general safety issues.

Joseph Lombardo, a senior assistant town attorney, said there are anywhere between 20 and 50 summonses issued to Mr. MacPherson that are still active in the Southampton Town Justice Court system. Mr. Lombardo added that his count is a conservative estimate.

Mr. Frano, who served as a code enforcement officer for Southampton Town for 25 years prior to retiring in June 2007, said he had known Mr. MacPherson for the better part of that time. He added that he rarely saw Mr. MacPherson, whose primary residence is in Manhattan, in Southampton Town Justice Court to answer the summonses.

Mr. MacPherson, the owner of Magic’s Pub and the Sunset Cafe in Westhampton Beach, and George O. Guldi, an attorney and a former Suffolk County lawmaker who lives and works in Westhampton Beach, and three co-conspirators were all charged with felonies stemming from a mortgage fraud scheme that authorities said targeted 50 properties throughout Southampton Town and dates back to 2002.

Mr. MacPherson and Mr. Guldi, along with Ethan Ellner of Plainview and Dustin Dente of Roslyn, both attorneys, and Carrie Coakley of Manhattan, who is married to Mr. MacPherson, all pleaded not guilty to felony charges during their respective arraignments last month in Southampton Town Justice Court.

Patricia Weiss of Sag Harbor, one of Mr. MacPherson’s attorneys, did not return calls seeking comment.

Steven Wilutis of Miller Place, the attorney representing Mr. MacPherson in the mortgage fraud case, also did not return several calls left at his office over the past few weeks. At his client’s arraignment last month, Mr. Wilutis said that he had no comment concerning the code violations that had been accumulated by Mr. MacPherson.

Many of the properties that are owned by Mr. MacPherson—officials with the Suffolk County district attorney’s office have declined to say how many properties are still owned by him—have either fallen into disrepair or are plagued with violations, according to Southampton Town and Westhampton Beach Village code enforcement officers.

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There's more out there. Hopefully Mr. Spotta will keep at it and not decide they are "civil" cases and not criminal.
By North of Highway (277), Westhampton Beach on Apr 22, 09 1:28 PM
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