Carpenter indicted on fraud charges
Jamie Shell / (email@example.com)
An indictment was handed down on Friday, March 23, by a federal grand jury sitting in Charlotte indicting Carpenter on charges of conspiracy, bank fraud and making false statements on tax returns, announced U.S. Attorney for the Western District of North Carolina Anne M. Tompkins.
According to the criminal indictment, Carpenter, 54, and co-conspirators conspired to provide banks with false information to secure mortgages for the real estate development The Village of Penland. From 2001 to 2007, Carpenter closed more than 300 residential real estate loans to individuals secured by Penland lots and valued at approximately $108 million, the indictment alleges.
The indictment further alleges that Carpenter, a disbarred lawyer, defrauded both banks and investors by failing to provide the legal services indicated in the loans and through various false statements made to the banks to obtain the loans. The indictment alleges that Carpenter was paid approximately $2 million in fees related to the Penland transactions.
Carpenter was arrested on Friday, March 23, and charged with seven felony counts. The first charge in the indictment alleges conspiracy to make a false statement and application in relation to a loan, conspiracy to commit mail, wire and bank fraud. Counts two through five allege bank fraud, and counts six and seven allege that Carpenter filed false tax returns. He made his initial appearance in U.S. Magistrate Court and was released on bond.
Five additional defendants have already pled guilty and have been sentenced by U.S. District Court Judge Frank D. Whitney in connection with the case. The defendants had their sentences reduced by the court to reflect their cooperation with federal authorities in its investigation and prosecution of others. According to court records, the defendants sold overpriced lots in what was supposed to become an upscale housing development in Mitchell County between 2002 and 2007. Prosecutors said the scheme bilked more than 200 investors in several states. North Carolina Attorney General Roy Cooper shut the project down in 2007, citing fraudulent business practices. Investigators contend The Village of Penland development was a classic Ponzi scheme in which money from new investors is used to pay high returns to earlier investors. Prosecutors said the project, on about 1,200 acres, involved bogus sales of land at inflated prices designed to get large loans on lots, many of which were unable to be developed. Developers told lot buyers they would use the loan proceeds to develop the projects and buy the lots back, but then used the money for unrelated purposes, according to court documents. If convicted, Carpenter could face up to $1.3 million in fines, as well as prison time, according to the U.S. Attorney’s office.