Archives For North Carolina

Robert Levie Norris, Jr., 50, New Bern, North Carolina was sentenced today to 48 months in prison for conspiracy to commit bank fraud and obstruction of a federal bank examination.

According to court records, statements made in court, and other public information, Norris was the first President and Chief Executive Officer of Coastal Bank and Trust (CB&T), which opened its doors to customers in 2009.  Norris served in this capacity from April 2009 to June 2013.  As CB&T’s highest ranking executive, Norris was entrusted to oversee all aspects of CB&T’s business and to ensure that CB&T operated in accordance with applicable federal and state laws, rules, and regulations.  In June 2013, it was discovered that Norris had engaged in a scheme to defraud CB&T by engineering fraudulent loan transactions with straw borrowers where the true beneficiaries of the loans were co-conspirators of Norris, business entities controlled by Norris, or Norris himself.  The offending loans included unsecured lines of credit, small business loans, and mortgages for commercial and residential properties.  Norris used his position of trust and authority at CB&T to circumvent the bank’s internal controls and normal loan underwriting procedures.  To conceal his scheme, Norris withheld relevant information about the fraudulent loans from CB&T’s board of directors and examiners from the Board of Governors of the Federal Reserve System.  CB&T suffered losses of approximately $2.4 million as a result of Norris’ conduct.

The Court ordered the term of imprisonment to be followed by 3 years of supervised release.  Norris was also ordered to pay $2,397,475 in restitution. Norris was named in a Criminal Information on April 18, 2017 alleging the above offenses.  Norris pled guilty to the charges on May 17, 2017.

The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., made the announcement.

When a bank official uses their position for their own personal profit they do more than commit a federal crime, they abuse their power and violate the public’s trust. Mr. Norris’ sentence today is proof of the commitment of the FBI to work with other law enforcement agencies to find these offenders and hold them accountable,” said John Strong, Special Agent in Charge of the FBI in North Carolina.

United States Attorney Robert J. Higdon, Jr. said, “Mr. Norris used his position of trust to unlawfully line his pockets with money to which he was not entitled. The USAO-EDNC will always work with federal, state, and local law enforcement to vigorously investigate and prosecute this type of criminal conduct. Mr. Norris’ sentence sends a strong message that this type of conduct will not be tolerated and will be punished accordingly.”

Mr. Norris’ fraud scheme and deception of bank examiners is the type of criminal conduct that impedes federal regulators from effectively supervising banking institutions,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection. “Today’s sentencing is one more step in a joint effort with our federal partners to hold accountable those who undermine the integrity of those institutions.”

This sentencing holds the defendant accountable for misusing his position as the bank President and CEO to fabricate fraudulent loans with straw borrowers, evade internal controls, and withhold information from the bank’s Board.  The underlying conspiracy cost the bank millions of dollars.  This case demonstrates the importance of cooperation among law enforcement partners to combat such criminal conduct and maintain the integrity of financial institutions,” said FDIC Inspector General Jay N. Lerner.

Investigation of this case was conducted by the Federal Bureau of Investigation, the Board of Governors of the Federal Reserve System – Office of Inspector General, and the Federal Deposit Insurance Corporation – Office of Inspector General. Assistant United States Attorney Adam Hulbig prosecuted the case for the government.

Xavier Milton Earquhart, 30, Greensboro, North Carolina, was convicted following a three-day jury trial of an extensive bank lien theft scheme, money laundering, and aggravated identity theft.

The evidence at trial showed that, in one bank fraud scheme, the defendant forged a deed on a property owned by an out of state landowner, and then channeled the property ownership through fictitious individuals and a holding company before personally taking title to the property.  The defendant then attempted to secure $495,000 in home equity loans using the property as collateral, becoming successful on three such attempts.

In a second scheme, the evidence showed that the defendant forged bank lien releases on 8 properties, in some instances, by stealing the identities of bank employees, and in other instances, using fictitious notaries.  The defendant created Delaware holding companies to conceal his activities. The defendant then sold the properties off to unknowing third parties.  At trial, the evidence showed that because of the defendant’s actions, some homeowners lost the funds that they had invested into the properties.  Other victims were left uncertain as to the ability of their families to remain in the homes due to the cloud upon their title.

Lastly, the evidence at trial included evidence from law enforcement concerning the tracing of the defendant’s fraudulent gains.  Law enforcement used a note and key found in the defendant’s Prius to uncover a hidden trove of $300,000 worth of gold, concealed in a storage unit in Spring, Texas.  Law enforcement also seized various items of valuable recording studio equipment.

The jury found Earquhart guilty of ten counts of Bank Fraud, two counts of Engaging in Monetary Transactions Involving Criminally Derived Property and one count of Aggravated Identity Theft and Aiding and Abetting.  Following the jury trial, the jury further found that the defendant was obligated to forfeit more than $1.3 Million in fraudulent proceeds, more than $100,000 in recording studio equipment, and $300,000 in gold bullion and coins.

Earquhart is tentatively scheduled to be sentenced by Senior United States District Judge W. Earl Britt in July 2018 and faces up to 30 years imprisonment.

The investigation of this case was conducted by the IRS Criminal Investigation, with the assistance of the Federal Deposit Insurance Corporation Office of the Inspector General, the Wake County Register of Deeds, Wake County Sheriff’s Office, United States Secret Service and the Bankruptcy Administrator for the Eastern District of North Carolina.  Assistant United States Attorney William M. Gilmore represented the government in this case.

Michael Lane Prevette, Greensboro, North Carolina, was sentenced to 42 months imprisonment in federal court in connection with loan application and appraisal fraud.

Brian Keith Perdue, appraiser, was sentenced to 5 years probation and ordered to pay $886,749.02 in restitution.

In October of 2016, Prevette pled guilty to count one of an indictment, which charged Conspiracy to Commit Application Fraud.  After Prevette completes the term of imprisonment, he will be on federal supervised release for 3 years and has been ordered to pay $886,749.02 in restitution. United States District Judge R. Bryan Harwell of Florence imposed the sentence.

Prevette was involved in a scheme in which mortgage lenders were misled when members of the conspiracy caused fraudulent loan packages to be submitted to the lenders. These packages included inflated real estate appraisals which were prepared at Prevette’s direction. These properties were located in the Myrtle Beach area.

United States Attorney Beth Drake made the announcement. The case was investigated by the FBI.  Assistant United States Attorney John C. Potterfield of the Columbia United States Attorney’s Office prosecuted the case.

Michael Allan Johnson, Jr. attorney, Lexington, North Carolina, and Jennifer Willard Turnmire, mortgage loan broker, Thomasville, North Carolina, also known as Jennifer Willard, were indicted by a grand jury in the U.S. District Court for the Middle District of North Carolina.

The indictment alleges that Johnson, Turnmire and an individual identified as Person A who was an attorney and is now deceased, recruited Luis Francisco Moreno, a licensed real estate broker and real estate developer residing in Greer, North Carolina, who was experiencing financial difficulties in his business ventures, and encouraged him to serve as a loan applicant to take out loans from Wells Fargo Bank and Carolina Bank so that the funds could be diverted to Johnson, Turnmire and Person A so that they could use those funds to pay off an conceal previous fraudulent loans. Materially false information concerning Moreno’s assets and income as well as fraudulent documents, such as bank statements, tax returns and HUD-1 settlement statements, were provided to the financial institutions. The indictment further alleges that Johnson created a fake work estimate from Artisan Construction of Concord Inc. (a company of which Johnson was president) and provided it to a lender in connection with a loan application.  He also created and submitted fake paystubs from White Meadows LLC (a company of which he was the manager/member) to delay foreclosure proceedings. Johnson is also alleged to have created letters on his law firm letterhead falsely indicating that various large sums were being held in the law firm trust and escrow accounts and submitted them the a lender to delay foreclosure proceedings.

The involved properties were 5400 Dorchester Road, Greensboro, North Carolina; a property on Brantley Gordon Road, Denton, North Carolina,

The indictment alleges the conduct occurred from about August 1, 2006 through about December 31, 2010,

Luis Francisco Moreno, Greer, South Carolina, was charged by information in the U.S. District Court for the Middle District of North Carolina and pled guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud.

According to the Information, Moreno was a licensed real estate broker and real estate developer.  Moreno was experiencing financial difficulties in his business ventures.  Moreno was encouraged by Person A, a closing attorney residing in Lexington, North Carolina who is now deceased, to serve as a loan applicant with Wells Fargo Bank, to purchase two pieces of property in North Carolina. Moreno provided materially false information about his assets and income in the loan applications and provided false documents, including bank statements and tax returns.  Moreno also signed false HUD-1 statements. The scheme diverted the loan proceeds from Wells Fargo.

 

Antoine Johnson, 40, Davidson, North Carolina was sentenced to 27 months in prison for his role in a mortgage fraud conspiracy involving luxury condominiums in Oak Island, North Carolina.

According to filed court documents and the sentencing hearing, throughout 2007 and 2008,  Johnson, who engaged in the mortgage fraud scheme with seven other co-conspirators, who operated as a promoter for the mortgage fraud conspiracy, controlled A&J Entertainment, Inc. (A&J Entertainment), a company used by the conspiracy to funnel kickbacks derived from the fraudulent scheme and to support false or inflated statements of employment and income in mortgage loan applications.

Court documents show that the co-conspirators perpetrated the scheme by recruiting straw buyers who agreed to buy condominiums in their name but had no intention of living in the properties or making payments to the corresponding mortgage loans.  The builder agreed to sell the units to the conspiracy’s straw buyers at an inflated price, causing the lenders to issue mortgage loans based on the inflated prices.  Then at closing, the closing attorney prepared separate accounting statements instructing the builder to pay the difference between the true price and the inflated price of the condominiums to one or more of the conspirators.

According to court records, the conspirators induced mortgage lenders to issue mortgage loans, by submitting loan packages that contained forged documents and fraudulent information about the buyers’ income and employment.  In some instances, the co-conspirators persuaded and bribed a bank employee to provide a bogus verification of deposit as support for the fraudulently obtained loan.  Over the course of the fraudulent scheme, the conspirators caused a total of loss of approximately $4.5 million involving approximately 20 properties.

Court records indicate that Johnson operated as promoter in the scheme, helping to bring the transactions together, for which he received approximately $200,000 in kickbacks funneled through A&J Entertainment’s bank account.

Johnson waived formal indictment and was charged by information on January 13, 2016 and pled guilty on January 19, 2016.  The factual basis filed with the plea agreement sets forth the details of the scheme.

The other seven defendants involved in this fraudulent scheme were previously sentenced as follows:

  • Robert Davis, Jr., 41, Charlotte, North Carolina, was sentenced to 46 months in prison and two years of supervised release.Davis operated as a real estate agent for the scheme.
  • Robert Mahaney, Jr., 55, of Ridgeway, South Carolina, was sentenced to 30 months in prison and two years of supervised release.Mahaney was a mortgage broker for the conspiracy.
  • Ahmed H. Green, 37, Charlotte, North Carolina, was sentenced to 27 months in prison and three years of supervised release.Green acted as a promoter and sometimes as a straw buyer for the conspiracy.
  • Carisa L. Majesky, 49, Charlotte, North Carolina, was sentenced to 24 months in prison followed by two years of supervised release.Majesky operated as a real estate agent for the scheme.
  • Somer Bey, 51, Charlotte, North Carolina,  was sentenced to 17 months in prison followed by one year of supervised release.Bey was a real estate agent for the scheme.

    Eric Marlon Davis, 43, Charlotte, North Carolina, was sentenced to nine months in prison and one year of supervised release, nine months of which in home detention. Davis was a promoter in the scheme.

  • Danielle Anderson, 41, Charlotte, North Carolina, was sentenced to six months in prison and one year of supervised release six months of which in home confinement. Anderson was a bank employee who participated in the scheme.

Johnson will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

Johnson was sentenced by Chief U.S. District Judge Frank D. Whitney. The sentenced was announced by Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina who was joined in the announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Miriam Baer, Executive Director of the North Carolina Real Estate Commission.Assistant United States Attorney Maria Vento prosecuted the case.

U.S. Attorney Rose thanked the FBI and the North Carolina Real Estate Commission for their investigation of this case.

Frank Enrique Lleras, 30, Charlotte, North Carolina, the co-founder of a Charlotte-area property investment firm, pleaded guilty to securities fraud and wire fraud, in connection with an investment fraud scheme involving real estate properties.

According to filed court documents and the plea hearing, Lleras was the co-founder, executive vice president and chief investment officer of Optimum Property Investments, LLC (Optimum), an investment company headquartered in Charlotte with purported offices in Miami, Florida, Santiago, Dominican Republic and Barranquilla, Colombia. Lleras admitted in court that from about December 2012 and through 2015, he executed an investment fraud scheme through Optimum, which defrauded at least 20 victims of nearly $3,000,000. According to court records, Lleras induced his victim investors by promoting Optimum as a real estate investment company that made money by purchasing distressed and/or foreclosed real estate properties in Mecklenburg County and elsewhere, and then reselling and and/or leasing those properties. Continue Reading…

Nathan Shane Wolf, 44, Charlotte, North Carolina and John Wayne Perry, Jr., 34, Charlotte, North Carolina, and Purnell Wood, 44, were sentenced on federal racketeering charges in connection with their roles in the Operation Wax House fraud scheme.

Wolf, a licensed real estate agent, was sentenced to seven years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to the sentencing hearing, Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud. Continue Reading…

Howard Goldsmith, real estate developer, 41, Raleigh, North Carolina, was sentenced to a 30 month term of imprisonment for his role in a down payment fraud scheme.  According to documents filed in Court, between August of 2006 and February of 2009, Goldsmith and his conspirators carried out a fraud upon various banks and lenders using entities Goldsmith owned or controlled, including Ganyard Farm Construction and Baldwin EstatesContinue Reading…

Scammers are trying to take advantage of struggling families by promising to buy homes for quick cash warns the North Carolina Attorney General.

These scammers send postcards and put out signs proclaiming, “We buy homes!” But rather than buying houses as advertised, most of these companies will try to convince you to sign over control of your home. The company then leases the property out to a new tenant. As a result, you lose rights to your home but remain on the hook for mortgage payments. Homebuyers or tenants can also be hit hard by these scams, which can advertise homes in deceptive rent-to-own agreements for big upfront fees. Continue Reading…