Posted by mwm143 on 5/27/10 1:20pm
Msg #338556
Title & Settlement Company owners going to jail!
Pleas set in theft of $2.4 million
3 Charlotte men took money from their clients at real estate closing company.
By Stella M. Hopkins
[e-mail address]
Posted: Thursday, May. 27, 2010
Two owners and an executive of a bankrupt Charlotte real estate closing firm have agreed to plead guilty after stealing $2.4 million from clients.
Jerry Holmes and Scott Pace, owners of The Settlement Source, will each plead guilty to one count of conspiracy and one count of tax evasion, according to documents filed in federal court. They each face up to 10 years in prison and fines of $500,000, and the forfeiture of money and property gained in the scheme.
Steven Wray, listed as the firm's director of finance and administration, signed a plea deal for one count of conspiracy. He faces up to 5 years in prison and a $250,000 fine.
The charges are all felonies.
Federal prosecutors say that in November 2005, Holmes and Pace began taking money from the firm's escrow account. That included money that people would have received from the sale of their houses and buyers' deposits on homes, according to court documents.
The two men used the money to invest in real estate, including six homes, a condo and a number of lots near the Carolinas coast. They each took $200,000 to pay personal debts, bought a box suite for Carolina Panthers games and loaned money to Holmes' daughter to buy a house, according to the documents filed last week.
Prosecutors say the two men did not pay taxes on the money they took.
Wray was aware of the embezzlement and in December 2006 took $10,000 to pay personal debts. In March 2007, he also received $200,000, documents say.
Money was sometimes transferred to a separate firm, set up by Holmes and Pace. Then they would wire the money into the accounts of Jerry Holmes Enterprises, listed in state records as a computer firm in Matthews, and Pace's Avidstream, which state records describe as an event planner in Waxhaw.
About July 2008, as housing sales tanked amid the recession, the men could no longer cover the money they'd taken. Creditors petitioned to put the firm in bankruptcy, claiming they were owed $2.2 million. The firm is out of business.
Holmes, Pace and their attorneys could not be reached.
David Rudolf, the Charlotte attorney representing Wray, said his client had been laid off and his family was in danger of losing their home when Wray met Holmes through his church. The Charlotte man gratefully accepted the job Holmes offered. Rudolf said Wray kept only $10,000 of the money he received. He repaid the firm the $200,000 and wasn't involved in any of the real estate bought with the stolen money, the attorney said.
Rudolf said Wray had little control of the money because it was moved to other accounts and noted the single charge against his client.
"Steve is someone who had a difficult time saying no, even when he knew what he was doing was not right," he said.
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