Dominatrix Allegedly Ran $50M Mortgage Fraud Scheme

Just can't match what the ABA Journal ran today with Martha Neil so let me just excise those salient pieces which are juicy enough for anyone's Friday. Okay trivia fans, which movie was it with Richard Gere and the judge and the whips and the chains? Was it not 'And Justice For All?'

In the news last month when he complained that authorities had searched his law office, a Long Island criminal, matrimonial and real estate attorney now has additional trouble on his agenda.

Private practitioner George Guldi, 57, is accused of running, along with a dominatrix, her husband and two more New York lawyers, a $50 million mortgage scam that allegedly used straw buyers recruited from a fetish club to help dupe lenders into granting excessive mortgages, reports Newsday. When the mortgages weren't paid, the homes reportedly went into foreclosure.

Guldi is particularly well-known because he is a former Suffolk County legislator. He has now been criminally charged in what Suffolk District Attorney Thomas Spota describes as a "seven-year-long mortgage fraud spree" operated between 2002 and 2009 concerning dozens of upscale homes in the Hamptons, according to the newspaper and the Associated Press.

A lawyer representing Guldi, who has pleaded not guilty to first-degree grand larceny and other charges in Southampton Village Justice Court, declined Newsday's request for comment. The newspaper says Guldi is accused of "act[ing] as the lawyer in dozens of fraudulent transactions that made him millions."

Prosecutors say another New York lawyer, 49-year-old Ethan Ellner, created fake titles that falsely claimed homes involved in the scam were free and clear of mortgages and other debt, Newsday reports. Thus, the straw buyers allegedly recruited with payments of $5,000 to $10,000 to overstate their incomes and pose as legitimate purchasers of expensive East End homes in the Town of Southampton were able to persuade banks to loan more on the homes than they were worth, according to the government.

Defendant Carrie Coakley, 38, who was featured in the 1998 documentary Whipped, and her husband, Donald MacPherson, 65, allegedly recruited straw buyers from among the clientele of their sexual fetish fantasy business, Arena Studios.

MacPherson is the publisher of the SoHo Journal, reports the East Hampton Star, in an article that provides additional background information about Guldi.

Earlier coverage:
ABAJournal.com: "Prosecutors Seized All Files in My Law Office, NY Attorney Says"

Two Lives, Two Prison Terms, and Two Different Standards of Justice

Occasionally, a simple news article written the right way sends a message far greater than its words. In the piece I have attached below, Sarasota Herald Tribune writer Mike Braga documents the change of plea of one John Yanchek, a prominent Tampa attorney who had been in the center of a major criminal federal fraud prosecution.

Yesterday, John Yanchek told a court that he repeatedly lied to banks to help his clients get loans that reportedly totaled some $83 million. He thus confessed and pleaded guilty to conspiracy, money laundering and making false statements to a bank.

"I didn't know at the time I was committing a crime," Yanchek, claimed, “I'm not a criminal attorney. I thought I was assisting my client to get loans closed."

He tried that sob song at trial too. He said he was simply “following orders.” Now where have we heard that line before? This was no babe in the woods, just out of school. He was a sophisticated, 49 year old seasoned attorney, and sadly, because of greed and avarice, not ignorance, he went down.

The person I feel sorry for is the kid he pled guilty with, that became the underlying message of the Mike Braga news article. Mr. Braga wrote two articles here, one relating a change of plea for a rich lawyer, the other relating how there are incredible inequities which permeate the criminal justice system.

Here you go:

"Sitting at the adjoining table to Yanchek's on the 12th floor of the federal courthouse in Tampa was Rashad Bryant, a 22-year-old Sarasota resident with a 10th grade education who was pleading guilty to dealing crack cocaine within 1,000 feet of Booker High School.

Unlike Yanchek, who graduated from Temple University Law School and has spent more than 20 years in his chosen profession, Bryant faces a minimum of 10 years in prison and a maximum of life behind bars.

The nine grams of crack that he tossed from his pocket during a police chase had a likely street value of about $500. Yanchek's cut of the proceeds from mortgage fraud, according to his plea agreement, was $7.6 million.

McCoun bounced back and forth from Bryant to Yanchek with questions and statements throughout the hearing.

In the end, he asked them both if they were sure they wanted to plead guilty and both responded in the same way."It is in my best interest to plead guilty," both men said."

http://www.heraldtribune.com/article/20090205/ARTICLE/902050364

Florida. The rules are different here.