Guldi Released Without Bail As Prosecutors Appeal Ruling That Threw Out Felony Conviction

Former Suffolk County Legislator George Guldi is free for the first time in six years, released on his own recognizance late Wednesday morning after a court overturned his March 2011 conviction on felony grand larceny and insurance fraud charges stemming from the destruction of his former family home in Westhampton Beach nearly a decade ago.

On Wednesday, prosecutors said they will appeal last week’s state appellate court ruling. The appeals process is expected to take about eight weeks.

Mr. Guldi, who turned 64 on Tuesday and has been imprisoned since 2011, must return before State Supreme Court Justice Mark Cohen on September 13. If the prosecution’s appeal is denied, Mr. Guldi would then be re-arraigned on the two felony counts and faces a new trial.

As part of his release, Mr. Guldi will be living with a cousin somewhere in Suffolk County as the appeal process proceeds, according to prosecutors. They declined to provide an exact address.

“It’s a nice day for a walk outside,” said Mr. Guldi, who was dressed in khaki pants and a white button-down shirt, immediately upon exiting the Riverside courtroom shortly after 11 a.m. on Wednesday with his cousin, Tom Guldi, and attorney Michael Scotto. “Look, a tree!”

Wednesday’s court proceeding took about 20 minutes after the prosecution revealed that it would delay arraigning Mr. Guldi on the felony counts a second time.

Mr. Guldi said the first thing he intends to do is visit his children, though he, his cousin and Mr. Scotto could be overhead making plans to first stop at a luncheonette.

Wednesday’s court hearing comes exactly one week after a state appellate court threw out the disbarred attorney’s March 2011 conviction, in which he had been found guilty of misappropriating more than $860,000 in insurance money that was supposed to be used to rebuild his Griffing Avenue home. It later went into foreclosure and was torn down by the village in 2015 after becoming an eyesore.

Mr. Guldi had been serving a four- to 12-year sentence at the Marcy Correctional Facility in upstate New York for his crimes.

Robert Clifford, a spokesman for Suffolk County District Attorney Thomas Spota, emphasized on Tuesday that prosecutors had established Mr. Guldi’s guilt “beyond a reasonable doubt” for the grand larceny and insurance fraud charges.

Handed down on Wednesday, July 5, and in response to a pair of appeals filed by Mr. Guldi from prison, the ruling states the Suffolk County Criminal Court made a “reversible error” when it denied his attempts to have a prospective juror—an employee of the insurance company that cut Mr. Guldi a check that was supposed to cover the rebuilding of his home—removed from the trial.

The ruling goes on to state that Mr. Guldi—who has already served the maximum three-year sentence for his role in an unrelated $82 million mortgage fraud scheme that targeted dozens of homes, most on the East End—had a right to a new trial, if prosecutors opted for one.

He had been twice denied parole, with the latest rejection occurring in October 2016. At his last hearing, board members cited Mr. Guldi’s lack of remorse for his crimes as the main reason for their denial.

Edward Guldi—the son of George Guldi, and a 34-year-old attorney from Sound Beach—said on Friday that he was waiting for a decision from the DA’s office regarding the grand larceny and insurance fraud charges.

Terri Scofield, a paralegal, longtime friend and ex-fiancée of Mr. Guldi, said on Tuesday that she believed the DA’s office would opt not to retry the case. “I can’t imagine that they’re in any shape to hold him,” she said. “The case is a decade old; we already know their strategies. I very much doubt that he’ll be retried.”

In the July 5 ruling handed down by the State Supreme Court’s Appellate Division, 2nd District, the unnamed juror—dubbed “prospective juror No. 16”—was also identified as an employee of the American International Insurance Company, or AIG. AIG paid Mr. Guldi and Countrywide Home Loans $864,373.30 to cover the loss of Mr. Guldi’s home at 9 Griffing Avenue in Westhampton Beach, which burned down on November 30, 2008. Mr. Guldi’s indictment charged that he stole the funds by forging Countrywide’s endorsement on the insurance check and depositing it into his personal account. The account had a fraction of the funding left when it was finally frozen by authorities.

The appellate court, meanwhile, denied a separate attempt by Mr. Guldi to have nearly three dozen counts of intent to fraud and grand larceny dismissed on the same grounds, ruling that the former attorney waived his right to appeal those charges when he accepted a plea deal while being prosecuted on the separate $82 million mortgage fraud case. Mr. Guldi, who served as his own attorney, pleaded guilty to 34 criminal counts just as jury selection was beginning in August 2011. He was sentenced to between one and three years in prison by Suffolk County Judge James F.X. Doyle, and that sentence was supposed to run concurrently with the four to 12 years he received for his prior conviction.

“With regard to the judgment rendered August 31, 2011, the record sufficiently demonstrates that the defendant knowingly, voluntarily, and intelligently waived his right to appeal,” the ruling reads. “Moreover, contrary to the defendant’s contention, his plea of guilty was not induced by the County Court’s explicit promise that he would receive a lesser sentence to run concurrently with the sentence previously imposed with respect to the judgment rendered on March 21, 2011, as the court clearly informed him that the plea would stand regardless of whether the previously imposed sentence was vacated.”

Last week’s decision specifically tosses two felony charges—second-degree grand larceny and third-degree insurance fraud—filed against Mr. Guldi after prosecutors charged he misappropriated more than $860,000 in funding that was supposed to be spent on rebuilding his Westhampton Beach home. The cause of the fire was ruled accidental by authorities. The house, which remained an eyesore for years, fell into foreclosure and was finally demolished by Westhampton Beach Village in March 2015.

Specifically, the appellate court ruled that the unnamed juror “did not provide a completely unequivocal assurance that she could be fair and impartial” during the first round of jury selection. The decision notes that she “conceded” that there could be a “conflict of interest” if she were seated for Mr. Guldi’s trial. The court also denied Mr. Guldi’s challenge without asking her further questions about her employment, or how her professional status might affect her judgment. Mr. Guldi had exhausted all of his juror challenges by that time.

As for Edward Guldi, he says his father is planning for all possible outcomes, adding that “we are still in the dark about [the] retrial.”