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Banks bilked, investors scammed, buyers left holding bill
by David Leone
RALEIGH — The U.S. Attorney’s Office recently announced that two Wake Forest developers and a former Rolesville attorney are among real estate industry professionals charged with mortgage and investment fraud.
Wake Forest developers Johnny Ray Peele, 43, and Dwayne Thomas Hall, 49, are accused of conspiracy to commit bank and wire fraud or mail fraud. The charges carry a maximum penalty of 30 years in prison and a $1 million fine, or twice the gain or loss from the conspiracy, whichever is greater.
The allegation is that between 2003 and 2009, the two men and six others defrauded banks and lenders, with losses exceeding $1 million.
Hall, operating through Dwaye T. Hall builders, and Peele, through P.A.P’s Custom Home Builders, allegedly sold properties to straw buyers who did not have the financial means to pay back loans, misleading lenders in a fashion that allowed the developers to receive kickbacks for the sale and sometimes rental of the properties. Often the buyers were left with a bill they couldn't pay, many times leading to foreclosure by the lenders at a loss.
In a separate investigation, several people face prison time related to a case concerning former closing attorney Amy Robinson, 35, of Rolesville. Robinson pleaded guilty in 2010 to conspiracy to commit mail, wire, and bank fraud, but has yet to be sentenced.
The case stems from former Raleigh developer James Thomas Webb, 52, of Miami Fla., being accused of enticing investors to purchase, renovate and resell properties to first-time homebuyers in North Carolina and other states. The investors took out loans on properties with incomplete renovations or that were in poorer condition than represented on appraisal reports.
The indictment states that Webb and Robinson falsified closing statements associated with the loan transactions, including information about the amounts of money paid to Webb.
The end result was that Webb and his conspirators allegedly profited, while banks and investors were left in debt, often in possession of “boarded up and dilapidated” homes. Some homes were demolished as uninhabitable.
Sentencing for Robinson and the others involved in that case is expected to be determined in August, at the same time as Webb’s sentence.
“Mortgage fraud impacts families and devastates neighborhoods. The FBI is committed to protecting our nation’s economy by aggressively investigating those who attempt to undermine the financial stability of our housing market,” John Strong, special agent in charge of the Charlotte Division of the FBI, said in a release.
Other agency professionals involved also promised to continue to prosecute cases of fraud in the housing market.
“We are especially committed to aggressively pursuing mortgage and real estate professionals who instead of honoring their fiduciary responsibilities, abuse their positions and cause harm to [federal] mortgage insurance programs,” said Lester Fernandez, special agent in charge of the U.S. Department of Housing and Urban Development Office of the Inspector General (HUD-OIG). “HUD-OIG is committed to working cooperatively with our law enforcement partners to bring these individuals to justice and protect the integrity of our programs.”
Each of the cases is being prosecuted by the Economic Crimes Section of the U.S. Attorney’s Office as a part of its Mortgage Fraud Task Force, which was created in June, 2010.
In addition to involvement by the FBI and HUD-OIG, the Internal Revenue Service Criminal Investigation, U.S. Postal Inspection Service, Federal Deposit Insurance Corporation—Office of the Inspector General and the Raleigh Police Department assisted in the investigations. Assistant United States Attorney William M. Gilmore represents the United States in each case.