Real estate scam in Triangle, Fayetteville halted

RALEIGH -- A Wake County Superior Court judge has halted a real-estate scheme that misled people into buying rental properties in the Triangle and Fayetteville.

Dozens of investors were left with loans they cannot afford and rental properties worth far less than what they paid, Attorney General Roy Cooper announced in a statement released this morning.

Under the court order signed by Judge Paul Gessner, defendant Maurice Jenkins and the limited liability corporations he manages -- Lessane Properties and Fayetteville's Property Center -- are prohibited from continuing "unfair and deceptive business practices" in the real-estate venture.

The case against two other defendants, Arkansas resident Holly Stevens and The Eddie Peyton Group LLC that she managed with Jenkins, are pending. The Attorney General's Office said it believes they no longer operate within the state.

According to the attorney general's statement, Jenkins and the other defendants told potential investors the defendants could help them make a profit by buying houses out of foreclosure and renting them out without having to put any money down. Jenkins funded the scheme by misrepresenting the values of the properties he sold to those consumers, Cooper said in the statement, and by causing them to take out mortgages and lines of credit for more than the properties are worth.

The defendants then promised to manage the rental properties and cover the monthly mortgage payments, taxes and insurance on the homes, according to Cooper's complaint, while telling investors they would receive $500 a month in profit per home.

But the defendants did not charge enough rent to cover all those promised payments, the Attorney General's Office said. In some cases, according to Cooper's release, the homes were never rented or were too damaged to be inhabited.

Citing public records in Cumberland, Durham, Harnett, Robeson, Sampson and Wake counties, the Attorney General's Office said Jenkins and the other defendants sold more than 120 homes since 2004.