RALEIGH — A former Raleigh real estate developer whose mansion stood abandoned and covered with graffiti was sentenced to 27 years in federal prison Thursday, 10 months after pleading guilty to federal bank and wire fraud.
James T. Webb, 52, was accused of defrauding scores of investors out of millions of dollars through a real estate scheme that spanned several states.
In March, he pleaded guilty to conspiracy to commit bank and wire fraud in U.S. District Court in Raleigh. On Thursday, he went before U.S. District Judge James C. Dever III for sentencing.
Under the scheme, which played out between 2002 and 2006, Webb told investors he would use their money to buy, renovate and resell properties to first-time homebuyers in North Carolina and other states, according to prosecutors.
According to testimony at the sentencing hearing, Webb operated various real estate companies during that time, among them Alpine Properties and Webb Builders.
In 2004, prosecutors said, Webb took out a full page ad with the Triangle Business Journal, promising investors in multiple states quick, large and safe financial gains by investing money with him.
Investors took out loans on properties they were told had been renovated, and Webb conspired with a former attorney, a former appraiser and an associate to falsify appraisal reports to banks and lenders. The reports falsely claimed that appraisers had visited properties they had not seen and provided inaccurate condition reports for many of the properties.
During that time, prosecutors say, Webb used money from investors to fund a lavish lifestyle.
Meanwhile, he left various neighborhoods in North Carolina and Virginia blighted with boarded-up and dilapidated homes, many of which were ultimately demolished, prosecutors said.
Webb also left behind a home he and his wife paid $1.5 million for in 2002 an 11,000-square-foot brick mansion off N.C. 50 near the Wake-Durham county line. The home was left to vandals after a property dispute with Washington Mutual and JPMorgan Chase. The property and its graffiti-covered walls became the subject of much intrigue.
The accusations against Webb are rooted in 2007 allegations by the U.S. Securities and Exchange Commission. The federal agency accused Webb of running a real-estate scheme that defrauded more than 80 investors out of at least $8.4 million, starting roughly at the time he bought the mansion off N.C. 50.
Prosecutors and federal investigators said Thursday that they hoped the lengthy sentence for Webb would serve as notice and a deterrent to others considering similar schemes.
James Webb betrayed the trust of investors and left neighborhoods in two states blighted with dilapidated homes, John Strong, special agent in charge of the FBI in North Carolina, said in a statement after the sentencing hearing. His lengthy prison sentence emphasizes the severity and impact of this type of crime on our communities and should reassure the public of the FBIs commitment to hold these offenders accountable.
In addition to his prison time, which is to be followed by five years of supervised probation, Webb was also ordered to pay $11.9 million to his victims.
The former attorney who prosecutors say worked with Webb, Amy Robinson of Rolesville, also has pleaded guilty to conspiracy to commit mail, wire and bank fraud.
Blythe: 919-836-4948; Twitter: @AnneBlythe1