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Suffolk DA Charges 8 In Mortgage Fraud Racket

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Mar 25, 2009 8:17 pm US/Eastern

Suffolk DA Charges 8 In Mortgage Fraud Racket

Reporting
Pablo Guzman
NEW YORK (CBS) ― Suffolk County DA Thomas Spota announced the arrest of George Guldi, a former Suffolk legislator, and charged him, plus Ethan Ellner and six others with a $50 million mortgage fraud racket.

"The damage that these defendants single-handedly caused the East End is simply appalling," Spota said.

The DA said the scam worked partly by using what's called a "straw purchaser," in other words, a person to be a front on the mortgage application.

For example, a building in lower Manhattan, the DA said, housed a dominatrix club called "Arena." The DA said it was one of a couple of businesses there owned by Donald MacPherson and his wife, Carrie Coakley, and used as phony employers in the scam.

"This club was used by the defendants to solicit clients of the dominatrix services, to act as straw purchasers," Spota said.

The DA said the ring had every angle covered. Ellner, the DA said, used his deed company to print phony titles to hide previous mortgages from the banks giving the loans, and that other suspects created phony proofs of employment.

One straw purchaser was supposedly the highest paid New York City transit conductor in history. "They issued W2 forms and pay stubs to show that he was making $69,000 a month. A month. And that he claimed he had assets of over $4.7 million," Spota said.

The Suffolk County DA said the mortgage scam has been going on for seven years.
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