Attorneys representing Melhado, Flynn & Associates, the Manhattan-based investment firm headed by Quogue Village Mayor George Motz, have not yet responded to felony charges of fraud and altering documents to impede the subsequent investigation, according to federal investigators.
Though company representatives were scheduled to appear in U.S. District Court in Central Islip last Friday, no one representing MFA attended the status conference hearing. An attorney who was supposed to represent the company did not attend because, as of late last week, she had not yet been retained by the investment firm, according to Robert Nardoza, a spokesman for the U.S. Attorney’s Office, which is handling the federal case.
Mr. Motz and his attorney, as well as the lawyers representing MFA, are all scheduled to return to court to answer the charges on Friday, January 23.
Also last Friday, Mr. Motz was arraigned and pleaded not guilty to a new indictment that stems from his original arrest last year. “He was arraigned on the superseded indictment, which simply adds the company as a defendant,” Mr. Nardoza explained.
Mr. Motz and MFA have each been charged with one count of security fraud and one count of document alteration, both felonies, after they were accused of illegally earning more than $1.4 million for the investment firm, according to a copy of the indictment. Mr. Motz pleaded not guilty to the original charges in August. The new charges are identical to the old ones aside from the fact that the original document did not name MFA as a defendant.
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 illegally earn more than $1.4 million from November 2000 until June 2005. Mr. Motz has also been charged with attempting to cover his tracks after officials with the U.S. Securities and Exchange Commission began investigating his actions.