Judge Terminated Receivership in Mott Fraud Case
A federal judge ended the receivership of Kathy Mott’s assets after concluding no funds remained for legal expenses.
Updated on Sept. 30, 2026 in Financial Crime
Live Poll
Do you trust the court process to protect creditor interests when business assets fail?
In mid-September 2026, U.S. District Judge Frank Geraci Jr. terminated the court-ordered receivership of Kathy Mott's business assets. The ruling concluded that no remaining assets were available to pay the receiver and his legal team.
Why it matters
The decision came after the court determined there were no remaining funds to settle outstanding debts, while Five Star Bank successfully blocked the seizure of $284,000. The judge cited the lack of assets as the primary reason for ending the oversight process.
Judge Geraci ruled that Five Star Bank is not required to surrender $284,000 to the receiver. The court authorized the use of $56,000 from personal property sales to cover partial costs, leaving over $172,000 in fees currently unpaid.
The players
Frank Geraci Jr.
He is a U.S. District Judge presiding over the federal case in Rochester.
Kathy Mott
She is a defendant who pleaded guilty to operating a check-kiting scheme.
Mark Kercher
He served as the court-appointed receiver responsible for managing Mott's business assets.
Five Star Bank
It is a financial institution that successfully contested the receiver's claim to $284,000 in account funds.
The details
Kathy Mott previously pleaded guilty in federal court to participating in a check-kiting scheme that allegedly moved nearly $19 million. While a Crescent Beach property in Greece is appraised at $2.4 million, the judge shuttered the receivership after the receiver failed to help banks recoup losses.
Timeline
Mark Kercher began his role as the court-ordered receiver in April 2024.
A hearing regarding the status of the receiver and contested bank funds occurred on September 3, 2026.
The court officially terminated the receivership in mid-September 2026.
Kathy Mott is currently scheduled to face sentencing in December 2026.
Legal Context
This case follows the standard limitations of equitable receiverships, where court oversight is typically contingent on the availability of sufficient estate assets to cover administrative costs. The ruling underscores the difficulty of asset recovery in fraud cases when high-value collateral remains tied up in litigation.
The closure of the receivership indicates a significant shift in the local management of the assets tied to this high-profile fraud case. Residents and businesses connected to the affected properties should note that the court may still revisit these assets if pending state proceedings change the financial outlook.
The takeaway
The court's decision highlights that receivership is a time-bound tool that relies heavily on liquid assets for its survival. When businesses fail to provide funds for administrative costs, courts will prioritize terminating the oversight process to prevent further insolvency.
What happens next
Kathy Mott is scheduled to return to federal court for sentencing in December 2026.
Further reading
For more information on legal proceedings regarding illicit transactions, visit the Financial Crime section.
Source note: This article includes information reported by Rochester Beacon.
Live Poll
Do you trust the court process to protect creditor interests when business assets fail?
