A former restaurateur and event space coordinator accused in a local check-kiting scheme has won an initial round in trying to fend off racketeering allegations.
But the federal court’s decision on Monday dismissing Five Star Bank’s conspiracy claims against Katherine Mott came with a caveat — allowing the bank to subpoena other financial institutions in an attempt to widen the timeframe of the alleged fraud.
Mott owned Crescent Beach in Greece and Monroe’s restaurant in Pittsford and operated The Wintergarden in downtown Rochester as well as Divinity Estate and Chapel off South Goodman Street.
She pleaded guilty to federal charges of fraud and money laundering in December 2024, but has yet to be sentenced. The criminal case has been adjourned multiple times, pushing sentencing to Sept. 16. Five Star's ongoing lawsuit seeks to recover approximately $21 million it claimed was stolen.
How a check-kiting scheme works is someone opens a bank account then writes a check for a large sum. They use that check to open another account at a different bank and then write a check on that account and deposit it back with the original bank.
Five Star “alleged that Mott’s illegal activity was part of the regular way that she conducted business and as such, there is no ‘obvious ending point’ to her scheme,” U.S. District Court Judge Frank Geraci Jr. wrote in the order, but added: “The court disagrees because in this case, the alleged scheme was inherently terminable.”
Courts have held that a pattern of racketeering must continue for more than two years or that there was a threat of it continuing beyond whatever period it occurred. Mott’s activity involving Five Star lasted 18 months.
Geraci noted that was in large part because the bank discovered the alleged scheme, and took steps to restrict Mott’s ability to write additional checks. Geraci’s order now allows Five Star to seek limited records of Mott’s alleged fraud involving four other financial institutions in an attempt to establish continuity over a longer timeframe.
Those institutions are Evans Bank, Lyons National Bank, Canandaigua Bank and Trust, and Tompkins Community Bank.
