Former Quogue Mayor George Motz will have to pay only a fraction of the $2.4 million that prosecutors say he stole from clients of his Manhattan investment firm, according to court documents. The former chief executive officer and president of Melhado, Flynn & Associates was convicted of securities fraud last year and sentenced in April to 8 years in prison.
According to court records filed on August 5 in the Second Circuit Court of Appeals, Justice Arthur D. Spatt ruled that Mr. Motz would have to pay about one-third the amount of money that the court originally deemed he owed his victims as part of a “cherry-picking” scheme. This figure dropped from an estimated $2.4 million in damages to $864,806, according to court documents.
The decrease, according to the documents, is due to the statute of limitations on the crime. This means that since the crime is not ongoing, the court can require Mr. Motz to pay only for losses that were suffered by his victims prior to August 27, 2003. This date was determined by the court to be the statute of limitation involving losses incurred during the five-year fraud scheme.
According to the ruling, Mr. Motz will be using proceeds from the $812,598.06 sale of his home—located at 8 Bayview Drive in Quogue—that he and his wife, Quogue Village Justice Kittrick Motz, owned, as a means of paying restitution. Mr. Motz received approximately half of the total sale price of his home, $419,148.06, which is now in an escrow account, according to documents.
Additionally, Mr. Motz will be required to pay the balance of his restitution starting 60 days after he is released from prison. He was handed an eight-year sentence by a federal court in late April, the length of which he is currently appealing. Once released, Mr. Motz will be required to pay 10 percent of his monthly income toward restitution until it is paid in full.
Mr. Motz’s attorney, G. Robert Gage Jr., filed a notice of appeal on August 17 in the Second Circuit Court of Appeals regarding this alteration in restitution. The court filings do not state grounds for appealing his prison sentence.
Mr. Motz is currently incarcerated at a federal minimum security facility in Pensacola, Florida.
Laura Cooper on Sep 22, 2010