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Developer Gets 27 Years in Prison

Friday, February 7, 2014

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A former real-estate developer who left neighborhoods riddled with blighted homes and bilked investors out of millions has been sentenced to 27 years in prison, according to federal authorities.

James Thomas Webb, 52, of Leland, NC, was also ordered to serve five years of supervised release and to pay nearly $12 million in restitution to more than 80 victims, according to a Jan. 16 announcement by the United States Attorney’s Office for the Eastern District of North Carolina.

James Webb
http://www.thewahm.org/b/

James T. Webb promised investors in multiple states “quick, large, and safe financial gains,” prosecutors said.

Webb was arrested Sept. 14, 2012, on a 50-count indictment that included conspiracy to commit bank fraud and wire fraud; 10 counts of bank fraud; three counts of wire fraud; and 36 counts of making false statements to influence banks on loans. He ultimately pleaded guilty to one count of conspiracy to commit bank fraud.

The case was investigated by the Federal Bureau of Investigation and other agencies.

Scheme on Investors

Prosecutors said that between 2002 and 2006, Webb operated various real-estate companies, including Alpine Properties LLC and Webb Builders LLC, for a profit. 

JTWebbMasterBuilder/ YouTube

In 2004, prosecutors said Webb abruptly left his north Raleigh mansion, showcased in this YouTube video, for Florida, where he continued his scheme.

Webb promised investors in multiple states “quick, large, and safe financial gains,” saying he would use their money to purchase, renovate, and resell properties to first-time home buyers in North Carolina, Virginia, Tennessee and other states. 

He also convinced investors to buy properties from his companies. The properties were supposed to have been fully renovated and worth about $65,000 each. Webb promised to maintain the properties for investors and to collect rent, which would be used to fund mortgage payments, prosecutors said.

The properties were not fully renovated, maintained or rented out, prosecutors said. Instead, Webb left blighted neighborhoods, especially in North Carolina and Virginia.

Webb used money generated by the scheme to support a lavish lifestyle, living in a multimillion-dollar mansion, driving a Bentley and other luxury vehicles, traveling extensively, and paying himself handsomely, prosecutors said.

Despite his alleged "philanthropic and humanitarian objectives," prosecutors said, the evidence showed that in the end, Webb defrauded investors, banks and lenders alike.

Doctored Documents

The evidence also established that Webb conspired with former closing attorney, Amy Robinson, 35, to systematically falsify closing statements for properties that Webb had persuaded investors to buy, prosecutors said.

Robinson pleaded guilty in federal court on May 3, 2010 to conspiracy to commit mail, wire, and bank fraud.

Webb Builders
Screenshot from Youtube video above

Webb used money generated by the scheme to live a lavish lifestyle, residing in a multi-million dollar mansion, driving expensive vehicles including a Bentley, traveling extensively, and otherwise paying himself handsomely, prosecutors said.

Others involved in the scheme included a former West Virginia appraiser, Larry Max McDaniel, 71, and his associate, Jackie Gale Weaver, 55. The two falsified appraisals for properties sold to investors.

Although the appraisals stated that McDaniel personally inspected the properties, prosecutors said McDaniel never went to any of the more than 200 properties that Webb was supposed to have renovated. 

Instead, the appraisals and their contents were generated by Weaver, assisted by Webb’s network of employees and contractors. To justify Webb’s requested value of $65,000 per property; McDaniel and Weaver frequently used other Webb properties as comparable sales, prosecutors say.

McDaniel pleaded guilty in federal court on June 11, 2012, to making false statements to federally insured financial institutions, and aiding and abetting. Weaver pleaded guilty in federal court on Sept. 21, 2011, to conspiracy to make false statements to federally insured financial institutions.

Concerned Investors

Investors said they first grew concerned in 2004 when they began having difficulty reaching Webb regarding promised returns—and when they began to receive notices from city governments regarding the condition of the properties. 

That year, prosecutors said Webb abruptly left his north Raleigh mansion (showcased in this YouTube video) for Florida.

Even after causing catastrophic losses to his victims, and leaving neighborhoods blighted with abandoned homes, Webb continued to market his investment strategies in Florida, on the Internet, and in a book he authored, entitled Save Your Neighborhood, according to the announcement.

Online Presence

On his website, which is still live, Webb promotes the book and his "Webb Affordable Housing Model." 

"Webb shows the real life methods that WORK [emphasis in original] in order to create completely rehabbed, affordable single-family homes with an average sales price of $65,000," the website notes. "Specific instructions are given on how to eliminate blight, joblessness, homelessness, crime, recidivism, gentrification, and other ills that plague African American and low-income communities across America [...]."

Admission

During sentencing, Webb admitted upon cross examination that he had committed the fraud, and that all of the losses alleged were a foreseeable consequence of his crime, according to the announcement.

Multiple investors from North Carolina, South Carolina, Georgia, and California also appeared and spoke out against Webb at the hearing.

“James Webb betrayed the trust of investors and left neighborhoods [...] blighted with dilapidated homes," said John Strong, Special Agent in Charge of the FBI in North Carolina. "His lengthy prison sentence emphasizes the severity and impact of this type of crime on our communities and should reassure the public of the FBI’s commitment to hold these offenders accountable,”

   

Tagged categories: Business matters; Construction; Criminal acts; Laws and litigation; Maintenance programs; Renovation; Residential Construction

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