Melhado, Flynn & Associates, the Manhattan-based investment firm headed by Quogue Village Mayor George Motz, has been indicted by the U.S. Attorney’s Office and charged with felony fraud and altering documents in an attempt to impede the subsequent investigation.
The indictment comes several months after Mr. Motz was indicted on the same charges. He pleaded not guilty this past summer and is expected to reappear in court this December.
In the indictment issued Wednesday, November 19, Mr. Motz, who owns 9.3 percent of MFA and serves as its chief executive officer, and the company are accused of “cherry-picking” profitable accounts for the investment firm over a four-year period, and altering documents in an attempt to impede a subsequent investigation by the U.S. Securities and Exchange Commission.
Mr. Motz and MFA were each charged with one count of security fraud and one count of document alteration, both felonies, for illegally earning more than $1.4 million for the investment company, according to a copy of the indictment. “The company now faces sanctions and fines up to double the amount of what we allege was generated as a result of this cherry-picking scheme,” said Robert Nardoza, a spokesman for the U.S. Attorney’s Office, on Thursday. If convicted, MFA could be forced to pay a penalty of up to $2.8 million.
Mr. Motz, who is facing up to 45 years in prison if he is convicted, is scheduled to appear in U.S. District Court in Central Islip for a pre-trial hearing on Friday, December 19, at 4 p.m. A trial date may be set at that time. Attorneys representing the interests of MFA are also scheduled to appear in court at a later date.
Authorities have said that the charges have nothing to do with Mr. Motz’s work as Quogue Mayor, a position he has held since 2002. In past interviews, Mr. Motz, who is married to Village Justice Kittric Motz, has maintained his innocence and has said he has no intention of stepping down from his elected post.
Prosecutors are alleging that Mr. Motz “cherry-picked” profitable accounts and provided them to a select group of investors as part of an elaborate scheme that entitled the company to earn more than $1.4 million from November 2000 until June 2005. He has also been charged with attempting to cover his tracks after officials with the U.S. SEC began investigating him.
Bryan Finlayson on Nov 20, 2008