Bank sues former Suffolk County Legislator George Guldi, alleges mortgage fraud

Wachovia Federal Savings Bank has filed a civil lawsuit against former Suffolk County Legislator George Guldi claiming that he pocketed about $1.8 million as part of a mortgage fraud scheme involving a Water Mill home owned by his late father and appraised at $3.5 million, according to court documents.

Two weeks ago, Mr. Guldi’s Westhampton Beach law office on Mill Road was searched by officials from Suffolk County District Attorney Thomas Spota’s office as part of an ongoing mortgage fraud investigation. William Moran, an attorney at McCarter & English law firm in Manhattan who is representing Wachovia, said that Mr. Spota’s ongoing investigation is related to the lawsuit that bank officials filed against Mr. Guldi last week.

The civil lawsuit, which was filed in Suffolk County Supreme Court in Riverhead last Thursday, February 19, charges that Mr. Guldi pocketed most of the money that had been secured by Bulant “Bill” Akpinar, a co-defendant listed in the suit, to buy a property on Deerfield Road last spring that was appraised for $3.5 million and previously owned by Mr. Guldi’s late father, Walter. He died in 2006 at the age of 88.

“We assert claims of mortgage fraud,” Mr. Moran said. “We allege that [Mr.] Guldi was involved in the scheme which misled Wachovia into believing it was lending funds to an individual to purchase a certain property in the Hamptons worth $3.5 million.”

Noting that Wachovia is referring all inquiries about the litigation to him, Mr. Moran said the bank is charging that Mr. Guldi kept the majority of the mortgage payment—about $1.8 million—for himself and that the deed for the Deerfield Road home was never transferred to Mr. Akpinar when he allegedly purchased the home last May. According to Mr. Moran, the 4,000-square-foot Water Mill home, which has four bedrooms, four bathrooms and is located at 1999 Deerfield Road, is now owned by a corporation called 2027 Deerfield Ltd. Mr. Guldi is listed as the contact for that corporation on the New York State Secretary of State website, and the lawsuit states that Mr. Guldi formed the corporation. Walter Guldi purchased the home in 2004, according to town records.

When reached on Friday afternoon, Mr. Guldi said he had not yet reviewed his copy of the lawsuit, which he just received earlier in the day. “If someone gave me $1.8 million, I would have remembered it,” said Mr. Guldi before declining to elaborate further.

The same day, Mr. Guldi said he briefly flipped through the lawsuit, which he described as a “telephone-book” sized document, and saw “things that purport to be my signature but do not look like it.” Mr. Guldi could not be reached this week.

Mr. Moran explained that there are two foreclosure actions currently pending on the Water Mill home—a fact that would have prevented Wachovia from ever awarding the mortgage, had the bank been aware of the situation. He said that the bank’s closing agent, Weiss and Weiss in Garden City—another defendant in the lawsuit—should have alerted Wachovia of the pending foreclosures. Officials at Weiss and Weiss did not return calls this week.

Mr. Akpinar, who could not be reached for comment, still owns a home on Eastland Drive in Glen Cove that Mr. Moran said was supposed to be sold as a condition of the mortgage to purchase the Water Mill property. The lawsuit states that another condition required that Mr. Akpinar, who has known Mr. Guldi for at least eight years, also sell his 2005 Mercedes-Benz CLK 500, which he has not done.

The complaint states, however, that Mr. Akpinar disavowed the Wachovia mortgage and told the Glen Cove Police Department that his identification had been stolen. A police report filed on August 4, 2008, indicates that Mr. Akpinar’s attorney, Scott Moore of Manhattan, informed his client that his identity had been stolen. According to the complaint, Mr. Akpinar told police that someone stole his identity to “impersonate him and sell his residence at ... Eastland Drive [in] Glen Cove and also to purchase a residence at 2027 Deerfield Road ... without his knowledge or authorization.”

Mr. Moore could not be immediately reached for comment.

“I’m looking forward to getting him under oath,” Mr. Moran said of Mr. Akpinar. “I want to get to the bottom of many questions myself.”

Mr. Moran explained that Wachovia is seeking, in the very least, to re-possess the 1999 Deerfield Road property from 2027 Deerfield Ltd., Mr. Guldi’s corporation. The bank may be entitled to more if the court determines that a mortgage fraud scam did occur, Mr. Moran explained.

One of Mr. Guldi’s attorneys, Katherine Huang of Manhattan, said she was aware of the lawsuit, but could not comment on it before she discussed it with Mr. Guldi. Mr. Guldi’s other attorney, John Diffley of Whitestone, did not return calls.

Robert Clifford, a spokesman for the Suffolk County District Attorney’s office, said Friday that he was unable to confirm whether or not the lawsuit filed by Wachovia was related to the ongoing mortgage fraud investigation that is being conducted by Mr. Spota. Earlier this month, Mr. Guldi’s law offices in Westhampton Beach were searched by the District Attorney’s office for records relating to real estate documents, such as transactions, mortgage processing files and mortgage loan applications. Investigators ended up confiscating about 18 boxes of files from the law firm.

Wachovia’s lawsuit contends that Mr. Guldi, who served in the Suffolk County Legislature from 1993 until 2003, sold the Water Mill house that belonged to his late father to Mr. Akpinar last May, though the deed was never transferred to Mr. Akpinar and, as a result, the sale was never officially closed.

Mr. Akpinar went into contract on the 1999 Deerfield Road property on February 12, 2008. The same day, Mr. Akpinar wrote a $100,000 check made out to Mr. Guldi as a down payment on the Water Mill property, the lawsuit states. It also states that Mr. Akpinar applied for the mortgage on May 5, 2008.

At the closing on May 19, 2008, Wachovia released the $1.8 million mortgage and, the complaint charges, Mr. Guldi received nearly all of the money via wire transfers in May. Over the next several months, Mr. Moran said, Mr. Akpinar did not make any payments on the mortgage and eventually defaulted on it. Wachovia alerted Mr. Akpinar that he had defaulted on the loan and, as of September 2008, owned the bank about $30,000.

Mr. Moran explained that Wachovia had entrusted the Garden City law firm of Weiss and Weiss—one of the defendants in the suit—to act as the bank’s closing agent in the sale. The lawsuit charges the firm with fraud and negligence. “They were charged with the responsibility to make sure everything was in order before they disbursed the fund,” Mr. Moran said.

The complaint states that Weiss and Weiss officials said that they outsourced the responsibilities of disbursing the mortgage to Rosedale attorney Dustin Dente, who also represented Mr. Akpinar while he was attempting to buy the Water Mill home. Wachovia would not have permitted the outsourcing to occur, the complaint states.

According to Mr. Moran, Weiss and Weiss officials stated that they were taken advantage of by Mr. Dente. The complaint charges that Mr. Dente allowed Mr. Guldi to sign both the buyer’s and seller’s documents, which is a conflict of interest.

“They either knew something was going on, or they allowed things to happen negligently,” Mr. Moran said about Weiss and Weiss. He added the company, which was on a list of attorneys approved by the bank to represent Wachovia during house closings, was also responsible for alerting Wachovia about the two pending foreclosures on the Water Mill property.

A $1.5 million mortgage obtained on the Deerfield Road home by Mr. Guldi’s late father in 2004 went into default in 2005. A second mortgage on the home totaling $300,000, and secured by Mr. Guldi’s late father, went into default sometime the same year, according to the complaint.

Besides Mr. Guldi, Mr. Akpinar, and Weiss and Weiss, there are a number of other defendants listed in the lawsuit. The Offices of Ellner and Bedell, a title agency in Ronkonkoma, Mr. Dente, the attorney from Rosedale, and Yolanda Barbaccia, a real estate agent in Howard Beach, are named as well.

Ellner and Bedell played a role in the wire transfers to Mr. Guldi, and Ms. Barbaccia participated in the closing on the home, according to Mr. Moran. Ms. Barbaccia told the Nassau County Police Department that she was paid an unknown amount of money to attend the closing, the complaint states.

Ms. Barbaccia did not return calls and the published phone number for the Offices of Ellner and Bedell is now disconnected.