Dan's Papers - April 3, 2009 - Sex and Real Estate

In January, detectives raided the law offices of George Guldi in Westhampton Beach and made off with 52 filing cabinets filled with information.

Guldi, who had been our Suffolk County legislator for 10 years and since leaving office in 2003 has been a well-respected attorney, was out to lunch at the time. He went ballistic. The detectives had come with a warrant that would allow them only to make off with files involving a mortgage scheme. Instead, they took ALL his files, including, he said, pictures of clients' children and other files relating to his law practice. He could not operate without these files, he said he would sue for improper entry and theft, but the detectives returned more than 30 of the filing cabinets the next day and he calmed down.

A week later it came out that the police were investigating the sale of the home of Guldi's late father on Mecox Road in Southampton. It had been sold and the buyer had received a mortgage for $3.7 million from Wachovia Bank. (This was not unusual at that time.) However, it seemed that $1.8 million wound up in Guldi's account rather than the buyer's account. And no mortgage payments were being paid. An interview with the buyer, a man named Bill Apkinar who lived in Glen Cove, elicited from him the claim that he thought his identity had been stolen. He said he knew nothing about the sale.

Last week, the roof fell in. In what is turning out to be a scandal involving sex, bondage, mortgage fraud, $50 million, identity theft and illegal aliens, this case is now making front page news. Guldi was nabbed, but the primary figure arrested was Douglas MacPherson, a prominent Westhampton businessman who owns Magic's Pub, the Artful Dodger, the Sunset Café, a Westhampton bed and breakfast and as many as many as 40 private homes, mostly in Westhampton and Quogue, but also in other communities in these parts. He also owns the Soho Weekly, a newspaper in Manhattan. He also owns, with his wife, Carrie Coakley, a sex club in Soho that rents out rooms to men and women who want to enjoy domination and role playing. Coakley, who is in her 30s, is a former dominatrix. MacPherson also owns some homes in Queens and Brooklyn.

MacPherson rents many of the homes he owns as summer share houses, but mostly, it seems, he rents to Hispanics, some of whom are illegal aliens, and from what the tenants are saying, as they worry about being evicted now, for amounts far above market.

MacPherson has pleaded not guilty.

"Nothing was done illegally or improperly," he told reporters. "It's because the economy went bad. And the situation was aggravated by Southampton Town ordinances that prohibited renting to immigrants. I sued the town in federal court over that."

MacPherson's suit, filed last January, as a landlord, said that the Town had created a new unconstitutional law that required landlords to list by name all tenants living in a rental. He said this was harassing Hispanics. One of his properties, a former motel in Westhampton, was an eyesore, a mess and overpopulated, the Town says. Police raided the property in the middle of the night to count noses and see who was who. They were not trying to turn anybody in to immigration. They were trying to see if the ordinance was being violated. It was. And so that next morning they issued fines to MacPherson. MacPherson's lawsuit resulted.

MacPherson, when asked about the "stolen identities" claim, said, "Everyone who claims their identities were stolen were partners. Some invested in houses with me, some purchased properties and I made agreements so they could manage them."

MacPherson said Guldi was his lawyer.

Also arrested, besides MacPherson's wife, was Ethan Ellner, 49, of Plainview, who allegedly created false documents, such as titles and appraisals and other reports, that would innacurately indicate to a bank that a particular property was free and clear of other mortgages, liens or other encumbrances and could therefore be issued a nice, fresh, clean new mortgage for more than the property might have been purchased for.

As for Guldi's late father's house, the district attorney claims this house had a $1.5 million mortgage that had gone into foreclosure in 2005 nobody knew about before also getting the $3.8 million mortgage.

District Attorney Thomas Spota said, "The damage these defendants single-handedly caused to our local economy is simply appalling."

If the DA is right, what took place was this: A client would rent a room at the sex club (he or she could rent actors and actresses, décor {Studio Red or Studio Reflect} or instruments of torture - cuffs, paddles, whips, blinds and masks, leashes and collars, mirrors, suspension devices, gags, clamps, canes, etc.) and then, in the course of things, be approached by management, who said that they had a property they wanted to buy and needed an identity to steal as buyer, and the club would pay the clients $5,000 for the privilege.

The stolen identity was thus the purchaser. He was an upstanding fellow in his community and his representatives, MacPherson and Guldi, could prove it. The "clean" title for the property was then presented, as was the appraisal, and then during the course of things there were some new minority buyers who wanted in and so the check from the bank for the mortgage should be made out to something such as 2025 Deerfield Path, Inc., which was how the money could go into somebody else's pocket. In some of these transactions the bank was not even given the backup information about the corporation, they were just told that instead of making the check out to Joe Sex Club Patron, make it out to 2025 Deerfield Path, Inc., because he would prefer it that way.

Everyone connected with this case has pled "not guilty." According to bank records, some of these properties have been behind in the rent for years and some more recent "buyers" never started paying any rent whatsoever. Of course, federal regulators were right on top of the case all the time, so these indiscretions were only allowed to go on for six years before everybody pounced.

If you're curious about what a sex club might be like, just go to the Arena Web site, which is arenastudios.com. There you will see naked people pretended to be having terrible things happening to them and you will be able to locate how to get in touch with them, (the studio).