Ruling calls a halt to real-estate scheme

RALEIGH -- A ruling in a Wake County court 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 for them, Attorney General Roy Cooper said Wednesday.

Under the court order signed by Judge Paul Gessner in Wake County Superior Court, 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 is pending against two other defendants, Arkansas resident Holly Stevens and The Eddie Peyton Group LLC that she managed with Jenkins. The state Attorney General's Office said it thinks they no longer operate in North Carolina.

According to Cooper's office, Jenkins and the other defendants told potential investors they could help the investors 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, Cooper said, and by causing investors 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, 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 had sold more than 120 homes since 2004.