‘No answer as to where these funds are’: Local restauranteur faces RICO claim over missing $19 million

Check-kiting Scheme

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ROCHESTER, N.Y. – Local restauranteur Katherine Mott was not present for a motion hearing Wednesday, in the case of alleged kite-scheming activity.

Five Star Bank is accusing Mott and other business partners for defrauding them out of nearly $19 million.

Representatives for the bank are asking the court to consider assigning receivership to gather all funds unaccounted for. They said the fraud goes back to 2022, and there’s still no answer to where the funds are.

“She took funds from Five Star Bank, dispersed them to other entities that are also defendants,” said plaintiff David Burch Jr. “This is a massive fraud scheme, and caused major damage to the bank.”

Mott had plans to revamp the former Crescent Beach Hotel in Greece. She also owns multiple restaurants including Monroe’s and The Wintergarden.

The bank filed a RICO complaint on March 29, accusing her and others of check-kiting schemes. Other defendants include business partner Robert Harris, and Mott’s father Roger; accused of allegedly assisting in the kiting by depositing checks to and from the operative bank accounts.

Mott’s attorney David Rothenberg told the judge in court Wednesday, that RICO claims are only used for mobs and gangs.

Attorneys for both parties declined to speak on camera on Wednesday.

The bank said Mott was artificially inflating the balance of various bank accounts, with various entities involved, to create an artificial source of funding. This was discovered by Five Star Bank, according to the lawsuit, and the result was a loss of nearly $19 million.

Without a receiver, the bank said it’s possible the alleged fraud could continue on. But, her attorneys said that’s speculation, adding that the bank is incapable of proving “continuity” of the alleged fraud. A decision was not yet made on receivership.

Rothenberg said in court, he doesn’t believe the case even belongs in federal court.

Mott also had accounts with Community Bank. Those have since been closed.

All told, Rothenberg said in court the bank needs to prove there is a legitimate threat that fraud would continue without receivership. Rothenberg said the kite-scheming occurred over seventeen days.

Both parties agree; they want Mott to lawfully continue on in her business projects. The question is, how will the court move forward?

The next step includes a motion hearing.

Mott’s restaurant ownership entities released a statement, saying their venues will continue to operate, and they’re “working diligently” to resolve questions to “satisfaction of all parties.”