Tuesday, September 23, 2008
North Carolina AG Unravels Fayetteville Property Investment Scheme
A Fayetteville real estate investment scheme has been shut down after leaving dozens of unsuspecting consumers with loans they cannot afford and rental properties that are worth far less than what they paid for them, Attorney General Roy Cooper announced.
Under a consent judgment signed by Wake County Superior Court Judge Paul Gessner, two of the companies and one of the individuals who ran the scheme are barred from the tricky practices they used to mislead people into investing in rental properties in the Fayetteville and Triangle, North Carolina areas. The court order applies to Maurice Jenkins, Lessane Properties, LLC, and Fayetteville’s Property Center and any of their agents and representatives. If Jenkins is found to have any financial assets, Cooper will pursue restitution for consumer victims.
The case against two other defendants, Holly Stevens and The Eddie Peyton Group, remains pending. Cooper’s office believes they have ceased operating in North Carolina.
Cooper contends that Jenkins and the other defendants told consumers they could help them make a profit by purchasing houses and renting them out without having to pay any money down. Jenkins funded his scheme by misrepresenting the value of the properties he sold to consumers and by causing consumers to take out mortgages and lines of credit for more than the properties are worth.
Public records in Cumberland, Durham, Harnett, Robeson, Sampson, and Wake counties indicate that Jenkins and the other defendants have sold more than 120 homes since 2004. The defendants purchased most of these houses out of foreclosure for between $10,000 and $70,000 and then resold them as rental properties for between $30,000 and $150,000.
According to Cooper’s complaint, the defendants promised to manage the rental properties and cover consumers’ monthly mortgage payments, taxes, and insurance on the homes as well as to pay them $500 profit a month per house. However, the defendants did not charge enough rent to cover all of the promised payments. In some cases, houses were not rented at all or were too damaged to be inhabitable. Jenkins told consumers that he would take care of getting loans for them to purchase the properties.
According to consumers interviewed by Cooper’s Consumer Protection Division, Jenkins completed their loan applications, took them to meet with loan officers, and told them how much money to borrow. In loan applications he prepared and submitted, Jenkins inflated borrowers’ incomes, exaggerated what they were going to pay for the properties, and misrepresented at least one borrower’s employment status.
As alleged in the Attorney General’s complaint, in some cases the defendants told lenders that consumers already owned the homes and were applying to refinance so that the loan would be approved with less scrutiny from the bank. Jenkins and the other defendants would then keep the money borrowed by the consumers and fail to pay off the previous mortgages, leaving consumers stuck with two mortgages on a single property. Some consumers didn’t find out that Jenkins hadn’t paid off the previous loans until they started to get foreclosure notices.
“Consumers looking to invest in real estate got snared by a complicated scheme that left them with lots of debt and no profit,” Cooper said. “We’ve put a stop to the scheme so that no one else gets hurt.” “If you’re looking for a legitimate opportunity to invest in real estate, beware of deals that sound too good be true,” Cooper said. “There are no risk-free investments, and any one who tells you otherwise or guarantees you a profit is probably up to no good.”
Cooper offered consumers the following advice about real estate investment deals:
• Do your own research on the property and investment opportunity. Investing in real estate should not be an impulse decision. Don’t rely on the information that is provided to you by the developers or
the people who are trying to get you to buy in to the investment.
• Get an independent appraisal to check the value of the property. Never rely on the appraisal of the developer or seller. Hire an independent appraiser, and be sure to check that he or she is a licensed
appraiser in the state where the property is located.
• Consider having your own attorney review documents before you sign them to be sure that everything is accurate and above-board. Never sign a closing statement or loan papers that aren’t entirely
accurate.
• If the opportunity sounds too good to be true, it probably is.
mortgage fraud
I can’t believe I lost 4 homes to this fraud. I trusted these companies; and know I don’t even know where to start to pick up the pieces. I invested because I am a single mom wanting to have something in the future. Now I have nothing. What do I do now. With 4 forclosure homes on my credit. I feel so lost.
Posted by on 10/01 at 05:12 PM
I met Mr. Jenkins through a family member. I visited NC a few years ago with the hopes of obtaining a few properties for extra income. I was unable to obtain any properties because of certain reasons. Its unfortunate though for the people that are stuck with this situation. You can only learn from this situation and the advice given above in the article is right.
Posted by on 07/22 at 01:23 PM
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
