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The criminal trial of former Suffolk County Legislator George O. Guldi, who is facing felony insurance fraud and other charges stemming from a fire that destroyed his Westhampton Beach home more than two years ago, began this week in Suffolk County Criminal Court in Riverhead.
Opening statements before Judge James F.X. Doyle wrapped up on Tuesday and witness testimonies were scheduled to begin on Wednesday afternoon, according to Bob Clifford, a spokesman for Suffolk County District Attorney Thomas Spota. Jury selection was held on Monday.
“Both opens were heard by the court,” Mr. Clifford said on Wednesday morning, adding that testimony was slated to begin again at 2 p.m. Wednesday. It is unclear how long the trial will take.
In September 2009, Mr. Guldi was charged with insurance fraud in the third degree, grand larceny in the second degree, criminal possession of a forged instrument in the second degree, and forgery in the second degree, all felonies. The grand larceny count, which is the top charge in the indictment, is punishable by a prison term of 5 to 15 years.
Just a month before he was arrested on the charges stemming from the fire, Mr. Guldi was also indicted for his role in what prosecutors described as an $82 million mortgage fraud scheme targeting the East End. The new charges are not related to his earlier indictment.
According to the DA’s office, Mr. Guldi submitted a claim to his insurance company after his house on Griffing Avenue in Westhampton Beach was severely damaged by fire on November 30, 2008. He received a check for $853,000. That money was supposed to be used to rebuild the home—which was still boarded up when Mr. Guldi was indicted almost a year later.
If the home was not rebuilt, Countrywide Home Loans, a division of Bank of America, would have applied the insurance money to the $1.4 million outstanding mortgage.
Prosecutors have said that about $163,000 is now left in the bank account in which Mr. Guldi had deposited the $853,000 check. They also said that when Mr. Guldi deposited the check, he forged the endorsement of Countrywide Home Loans, which holds the mortgage to the home.
Mr. Guldi, who is representing himself in the case, did not return calls this week.
In the mortgage fraud case, Mr. Guldi and part-time Westhampton Beach resident Donald MacPherson are accused of recruiting straw buyers—people who sell their personal information so another can obtain a mortgage loan—and securing loans for houses with forged documents. The pair would then flip the homes every few years as the price of real estate skyrocketed, according to prosecutors. When the housing market bubble burst in 2007, the scheme fell apart, according to prosecutors.
The ring was possibly the biggest mortgage fraud scheme ever in Suffolk County, according to the District Attorney’s office. At least 66 homes in Southampton Town were included in the scheme, and all of them are now in foreclosure.
“The larger mortgage fraud indictment is still in conference,” Mr. Clifford said. “I cannot predict when the defense will be ready for trial.”
Mr. Guldi, a Democrat, represented the South Fork in the Suffolk County Legislature for 10 years before losing to current Legislator Jay Schneiderman of Montauk in 2003.
Michelle Trauring on Jan 20, 2011