RALEIGH — A former Raleigh businessman who operated real estate companies in North Carolina, Virginia and Tennessee has been charged with defrauding scores of investors out of millions of dollars that paid for his lavish lifestyle that included luxury cars and extravagant mansions, including an abandoned, graffiti-covered home on the Wake-Durham border.
James T. Webb, 51, has been accused by federal prosecutors of taking part in a real estate scheme that spanned several states and several years.
In a 50-count indictment unsealed Friday, prosecutors contend that while operating various real estate companies between 2002 and 2006, Webb promised investors “quick, large and safe” financial gains by investing money with him.
The indictments come five years after the U.S. Securities and Exchange Commission began looking into Webb’s real estate dealings.
Under the scheme, which happened during the height of the real estate boom, Webb told investors he would use their money to buy, renovate and resell properties to first-time homebuyers in North Carolina and other states, prosecutors contend.
Investors took out loans on properties they were told had been renovated, federal investigators contend, and Webb conspired with a former attorney, a former appraiser and an associate to falsify appraisal reports given to banks and lenders. The reports falsely claimed that appraisers had visited properties they had not seen. They also provided inaccurate condition reports for many of the properties.
During that time, prosecutors contend, Webb lived in a multimillion-dollar mansion, drove expensive cars, including a Bentley, and traveled extensively.
In 2004, Webb moved to Florida, according to federal prosecutors, and marketed his services under new company names. Federal agents arrested Webb in Miami on Sept. 13.
The indictment contends that Webb left neighborhoods in North Carolina and Virginia “blighted with boarded up, dilapidated homes, many of which were ultimately demolished or uninhabitable.” Investors were left holding millions of dollars of debt.
One of Webb’s properties in North Carolina has become a curiosity: an 11,000-square-foot brick mansion off N.C. 50 that is now an abandoned wreck.
The Webb estate, the sprawling house with five chimneys, five bathrooms and legal saga to match its graffiti-painted walls, was built in 1998 and bought by Webb and his wife in 2002.
The couple paid $1.5 million for the 14-acre property, according to real estate records, but it has been left to vandals and a property dispute with Washington Mutual and JPMorgan Chase that has not been settled.