Former real estate developer gets 27 years for mortgage fraud

by Ryan Smith20 Jan 2014
A former North Carolina real estate developer has been sentenced to more than 27 years in prison for running a multimillion-dollar mortgage scam.

James Thomas Webb, 52, was sentenced to 327 months in prison and five years of supervised release and ordered to pay his victims more than $11.9 million in restitution, according to the U.S. Attorney’s Office for the Eastern District of North Carolina.

Prosecutors say Webb told investors he could get them quick, safe financial returns by using their money to buy, renovate and resell properties to first-time homebuyers. He also promised to collect rent on the properties which would be used to make mortgage payments. Webb also used money he received from investors to pay other investors, prosecutors said.

However, prosecutors said Webb instead defrauded both his investors and financial institutions that disbursed mortgage loan proceeds to him. The properties Webb purchased weren’t fully renovated, nor were they maintained or rented out. Webb, meanwhile, used the proceeds of his fraud to maintain the lavish lifestyle of a millionaire, driving a Bentley, living in a multimillion-dollar mansion and traveling extensively.

“James Webb betrayed the trust of investors and left neighborhoods in two states blighted with dilapidated homes,” said FBI Special Agent John Strong. “His lengthy prison sentence emphasizes the severity and impact of this type of crime on our communities and should reassure the public of the FBI’s commitment to hold these offenders accountable.”
 

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