RALEIGH — The women and men stepped up to the courtroom microphone, one after another, each with a personal story about how Carolyn Grant, the prominent Raleigh businesswoman, had pulled them into a scheme for which she is now headed to prison.
Grant, 63, sat at a table, flanked by her defense attorneys, Woody Webb Sr. and his son Woody Webb Jr. In November, Grant, a Georgia farm girl who had shown her mettle in the Triangles political arenas and business circles, pleaded guilty to one count of mail fraud.
A federal investigation revealed that she had defrauded more than 65 people out of $13 million with promises of high returns in real estate projects and coal mine speculations.
From March 2005 to 2010, investigators said, Grant participated in a Ponzi-esque scheme through which she made false claims to investors, telling them their money would be used for specific projects. Instead, investigators said, Grant used the money to pay back other investors or put it toward other unauthorized projects or her own personal and business expenses.
At a sentencing hearing on Friday, Clif Bullard, a restaurateur from Lumberton who had contributed money from a college fund his father had set up for his three children, described Grant as someone whose many false claims to him and others made Bernie Madoff look like honest Abraham Lincoln.
Over and over Ms. Grant deceived innocent investors about the use and purpose of their hard-earned money, said Thomas Walker, the U.S. Attorney for the Eastern District of North Carolina, which spans from Raleigh to the coast. In so doing she did great harm to the lives of the victims in this case. Our laws demand that those in the investment business be honest about the use of investors money. Ms. Grant violated that most basic requirement.
U.S. District Judge Terrence Boyle heard Grant apologize and ask for a sentence that would allow her to work and repay as much as possible
The Webbs and prosecutor David Bragdon had arranged a plea deal that proposed a sentence of at least 6 1/2 years. But Boyle, who has a reputation as an independent arbiter who sometimes rejects proposed agreements, wanted to hear from victims before handing down his sentence.
Many came with carefully crafted impact statements, sharing details of how they got to know Grant at the gym, in the neighborhood, from family or respected friends.
She has told lie after lie
Grant was the first female chairwoman of the Greater Raleigh Chamber of Commerce. She also was a candidate for Raleigh mayor in 1998 and U.S. Congress in 2002, though both campaigns were unsuccessful. The several dozen in the courtroom who had been enticed by Grant described her as someone who often seemed larger than life in her own community, a gregarious dealmaker who kept much hidden from her investors.
The N.C. Secretary of States Office issued a cease-and-desist order against Grant in August 2011 after allegations surfaced that she failed to repay millions of dollars she borrowed from friends and associates for real estate deals and personal loans.
Investors talked about projects Grant was advocating in Banner Elk, on the Cape Fear River and in coal country.
Carolyn Grant is a woman who preyed on her friends in order to benefit herself, said Elizabeth Long, an investor who claims Grant owes her well over one million dollars. She has told lie after lie.
Some of the men and women pulled heavily from savings they planned to spend in their retirement years after hearing spiels from Grant about the extremely high rates of return she promised.
Others drew from college funds for their children.
Some had lawyers look over contracts that failed to expose the problems ahead. Others were moved by whims and fanciful notions before the housing bubble bust.
Others thought Grant was a friend, a hard worker who never would be so cavalier with their hard-earned savings.
Nathan Byelick described a meeting with Grant in which he went into her office to raise money for what he described as a good cause and left determined to help her find investors for a coal mine she planned to buy.
Were you a coal mine operator? Boyle asked from the bench. Is that why she asked you to do this?
Byelick explained that though he had no expertise in mining or coal, Grant had offered him quick money if he helped her get $4.5 million. He said he thought she had a mine making money hand over fist and he would realize immediate gains.
Some investors talked of trips abroad that Grant had made amid the allegations of fraud, and also of an apartment for her grown son near Wilmington that had surfboards and pricey furnishings expenses they contended were personal and not business-related as her books showed. They urged Boyle to be tough and give her a long sentence.
But other investors urged Boyle to give Grant a sentence that considered house arrest or no prison time so she could work and perhaps make enough money to pay back the investors. Grant, despite cautions from court officials not to contact any of her investors, had been calling around before the hearing, the judge said, pushing such a proposal.
Since her arrest and after her guilty plea late last year, Grant has been working for a company in England, earning nearly $6,000 a month, according to Woody Webb Sr.
But Boyle said any expectations of restitution were as fanciful as the fraud was.
Nobodys going to get even a penny of the debt, Boyle said from the bench. Thats not going to happen.
Still, Boyle ordered Grant to pay back the $13.5 million as he sentenced her to 6 1/2 years in prison to be followed by three years of supervised probation. She has nearly two months to get her affairs in order before reporting to prison on June 30.
After victims of her investment schemes left the courtroom Friday, Grant hugged her son, Forest, and buried her face on his shoulder. After sitting stoically through the hearing, her face reddened and she began to sob.
Shes very remorseful, Woody Webb Sr. said outside the courthouse. She allowed her sense of right and wrong to be degraded incrementally over time. She had too many balls in the air, too many projects to worry about. The judge is right. Her ability to repay is somewhat restricted.
The need for trust
Many of the men and women who had given Grant money said they had learned a hard lesson and had a difficult road ahead. They complained of not only losing lots of money, some said they had lost their faith in their ability to judge people accurately.
Bragdon, the assistant U.S. attorney who worked on the case, said investors have to have security and trust or the economy suffers. This kind of fraud could destroy the market, he said.
Jim and Mary Good said Grant not only persuaded them to invest in projects she knew were doomed, but also pushed them to introduce her to their daughter and a friend in Ireland, who also sank money into her schemes.
Ms. Grant has no interest in paying any of us back, Jim Good said. Shes a very accomplished liar, thief and cheat.