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Sep 23, 2009 10:54 AMPublication: The Southampton Press

Prosecutors charge Guldi with insurance fraud

Sep 23, 2009 10:54 AM

Former Suffolk County Legislator George O. Guldi was indicted for a second time this year on Thursday, September 17, in a Riverhead courtroom, on felony insurance fraud charges stemming from a fire that destroyed his Westhampton Beach home nearly a year ago.

Mr. Guldi was indicted in August for his alleged role in a $82 million mortgage fraud scheme targeting the East End. The new charges are not related to his earlier indictment.

According to Suffolk County District Attorney Thomas Spota’s office, Mr. Guldi submitted a claim to his insurance company after his house at 9 Griffing Avenue burned down last year and received a check for $853,000. That money was supposed to be used to rebuild the home, which is now in foreclosure. If the home was not rebuilt, Countrywide Home Loans, a division of Bank of America, would have applied the insurance money to the $1.4 million outstanding mortgage.

Prosecutors said that about $163,000 is now left in the bank account in which Mr. Guldi had deposited the $853,000 check. They also said that he forged the endorsement of Countrywide Home Loans when he deposited the check. Prosecutors froze the account.

Prosecutors said Mr. Guldi refinanced his Griffing Avenue home at two years ago, taking out a $1.4 million mortgage from Countrywide Home Loans. An accidental fire destroyed Mr. Guldi’s house on November 30, 2008, according to Thalia Stavrides, a prosecutor with the district attorney’s office.

Bob Clifford, a spokesman for Suffolk County district attorney’s office, declined to say when prosecutors began their criminal investigation.

Mr. Guldi surrendered to the district attorney’s office on the morning of Thursday, September 17. While in handcuffs, he was arraigned later the same morning in Suffolk County Criminal Court in Riverside.

Mr. Guldi, who was wearing a blue suit and red bow tie, was charged with insurance fraud in the third degree, grand larceny in the second degree, criminal possession of a forged instrument in the second degree, and forgery in the second degree, all felonies, according to authorities.

The grand larceny count, which is the top charge in the indictment, is punishable with a prison term of five to 15 years, Mr. Clifford said.

Mr. Guldi stood expressionless as his attorney, Anthony LaPinta of Hauppauge, entered his not guilty plea.

“We will continue to fight for Mr. Guldi,” Mr. LaPinta said after the indictment was unsealed.

Mr. Guldi was released after posting $500,000 bond and left the courtroom without speaking to reporters. He declined to comment on the indictment when reached earlier this week.

Mr. Guldi, who lost his bid on September 15 for the Democratic Party nomination to run for his old county seat that he held for nearly a decade, is due back in court on Tuesday, September 29—the same day he is scheduled for a conference to discuss the charges related to the mortgage fraud scheme. Authorities said that the charges are unrelated.

It appears that no work has been completed on Mr. Guldi’s Griffing Avenue home, which was gutted in last year’s blaze. The house’s windows and doors are boarded up, and a crumbled pile of bricks lay in the front yard. Two burned holes are still visible on the home’s roof. Mr. Guldi declined to say where he and his family have been staying since the fire.

The Westhampton Beach Fire Department responded to the blaze mid-morning on November 30, 2008. The fire burned for hours and completely gutted the 150-year-old home that has been in Mr. Guldi’s family for three generations. Mr. Guldi’s father, Walter, bought the property in 1947, when the building was used as a barn. Walter Guldi later converted the barn into a six-bedroom home.

In an interview last winter, George Guldi said he spent most of his life in that home. He also said that he and his family were in Vermont at the time of the fire, which has since been blamed on an electrical malfunction in the home’s basement.

It took Westhampton Beach firefighters, who received assistance from Quogue and Eastport, nearly three hours to get the blaze under control, and almost six hours to extinguish it. In fact, two Westhampton Beach firefighters—Paul Bugge and Paul Hoyle—will receive the Medal of Valor on Sunday, September 27, during a special ceremony that begins at 1 p.m. at the Westhampton Beach Performing Arts Center, recognizing their heroic actions that day. Both men are credited with helping save fellow volunteer Kevin Raynor after the floor collapsed beneath him while battling the blaze.

Last week’s allegations of forgery and insurance fraud are just two more charges to add to Mr. Guldi’s growing list of legal troubles.

In August, Mr. Guldi was arraigned on 110 felony counts of grand larceny, conspiracy, money laundering, criminal possession of a forged instrument, forgery, insurance fraud and offering a forged instrument for filing for his alleged role in a $82 million mortgage fraud scheme that targeted homes on the East End.

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Wouls some one please explain to me how this guy managed to get so many votes in the primary?
By kuali (32), southampton on Sep 17, 09 4:24 PM
Innocent until proven guility
By EastEnd68 (888), Westhampton on Sep 17, 09 6:05 PM
Guldi, I think you deserve a new home, address "JAIL"
New wardrobe, "STRIPES"
and of course a litter box, ENJOY
By nurse (53), sag harbor on Sep 17, 09 7:37 PM
2 members liked this comment
Mr. Guldi sure has put himself in a spot. The unfortunate part for him is that the rules of attorney/client privilege leaves him with nothing to offer up against his co-conspirators. While Mr. MacPherson could throw Mr. Guldi under the bus at a moment's notice, Mr. Guldi has nothing to offer prosecutors and will probably receive the harshest treatment once the inevitable verdicts of fraud come down.
By Native Westhamptonite (14), Westhampton on Sep 18, 09 8:02 AM
Can he wear a bow tie in PRISON?
By gallerygirl (29), southampton on Sep 18, 09 8:54 AM
Shouldn't he start spelling Guildi, Guilty?
By homebird (8), Montauk on Sep 18, 09 9:26 AM
2 members liked this comment
The only fraud being committed here is by the DA's office. I believe these new charges to be insurance all right... timed 2 days after the primary... I think the power elite were a bit worried Guldi would squeak through the primary, and needed some insurance in the form of another perp walk to seek to discredit him. Which appears to be pretty easy in a culture that doesn't believe in the Constitutional theory "innocent until proven guilty".
But I've always said Suffolk County has the best justice ...more
By oneseriousSicilian (63), medford on Sep 19, 09 6:51 AM
Seems to me the same kind of talk from SoHo Journal...Mac Phearson.
Consistantly putting down "the Locals" and the local police dept....well, I guess the game will still be played out by slandering those who uphold justice for the town and protect the communities they live in.
I thank God for such a great police department and for the great work done by the Suffolk County DA's office! (looking forward to the rest of those connected to mortgage fraud and insurance fraud.etc...to be sentenced ...more
By UNITED states CITIZEN (207), SOUTHAMPTON on Oct 3, 09 6:04 PM
Gee if these latest charges are true on top of the 110 charges pending. Youd think George would be kicking it somewhere in South America. But then again Bernie Madoff stuck around to get a new home for life. Can't wait to hear what happened to all that money? By the way it is almost impossible for the average citizen with a home and tons of equity to get a loan these days. George whats your secret
By sol-man (2), hampton bays on Sep 19, 09 12:05 PM
1 member liked this comment
sol-man, I was ROTFLMAO at your South America comment! They froze all Guldi's accounts in March, when they arrested him! They took the guys Passport! He's got a wife & five kids in Suffolk, and anybody who knows him knows his family ALWAYS comes first. So where do you think Guldi's goiung to go?
If I know George, he'll piss them off worse by sticking around and getting exonerated, then suing their lying, conniving butts for everything they're worth, and using the settlement to fund another run ...more
By oneseriousSicilian (63), medford on Sep 20, 09 12:29 PM
Yes, Sicilian. Good luck with your hopes of Guldi's innocence. He should have thought of his kids before he allegedly committed these crimes. My prediction is this guy is going down. Way down. Too bad for his kids. You can't pick your parents.
By The Dark Side (8), Westhampton on Sep 20, 09 7:57 PM
Oh, no, Dark Side, I don't HOPE Guldi is innocent, I G-- D--- KNOW it! The key word here is ALLEGEDLY - the real shame is the amount of money he will spend and heartache he will endure in the years it will take to clear his name.
By oneseriousSicilian (63), medford on Sep 21, 09 2:51 AM