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Raleigh Real Estate Developer Sentenced for Ponzi Scheme
November 22, 2021

Raleigh Real Estate Developer Sentenced for Ponzi Scheme

by The CE Shop Team

There’s No Rallying for This Raleigh Real Estate Scammer

It’s an Ethics renewal year, and we all know what that means! REALTORSⓇ must complete a minimum of 2.5 hours of instructional time centered on the Code of Ethics before 12/31/2021. If you aren’t caught up, The CE Shop can help with our engaging Ethics courses. If you’re rolling your eyes at the idea of an interesting Ethics course, we understand — so don’t take our word for it. Check out what our students think of our Ethics offerings here.

While it’s crucial to understand how to act ethically as a real estate agent, it’s equally important to highlight unethical behavior within the industry.

For example, a North Carolina real estate developer was recently sentenced for his role in a local Ponzi scheme that defrauded investors of more than $1.5 million, according to federal prosecutors. We’ll walk you through the situation so that you can decide for yourself whether the punishment fits the crime.

Raleigh Real Estate Developer Sentenced for Real Estate Scheme

Real Estate Developer’s Dubious Defrauding

According to the indictment, Joshua Matthew Houchins owned and operated Rossshire Development LLC, Greenstone Ventures LLC, and Modern South Development LLC, and he used these entities to carry out fraud against his real estate development investors between 2014 and 2018.

Per a press release from the U.S. Attorney’s Office for the Eastern District of North Carolina, Houchins received funds from victims by selling them on the idea that their money was being applied to a property and secured by deeds of trust. Meanwhile, Houchins actually used these investor funds on other properties and personal expenses, according to the prosecutors. In some instances, the indictment stated, Houchins didn’t even own the properties in question.

Furthermore, the indictment states that Houchins not only diverted investor money away from the property on which the funds were intended, but he also failed to develop and sell the properties, which was one of the promises he made to his victims. Digging himself deeper, Houchins also failed to pay the investors’ promised returns, and the investors were left unable to foreclose upon the investment properties because he hadn’t secured the promissory notes with a deed of trust filed.

Houchins pled guilty to Count Nine, which was specific to one instance of the alleged fraud, on 1/6/2017. As the grand jury began to investigate the real estate developer in 2018, he panicked. In a letter from February 2020, Houchins admitted to destroying all of the evidence after only producing a small number of documents to the grand jury following the issuance of subpoenas to his attorney and his various real estate companies.

On top of the defrauding charges, Houchins was also photographed with an AR-15, despite being a convicted felon in North Carolina. The indictment alleges that Houchins contacted friends of his wife in March 2020 and said that she had “run to the police” and that he had “no mercy on a lying rat.” One month later, the indictment alleges that Houchins sent threatening communications to friends and family of his wife, including photographs of Houchins holding the AR-15. Houchins was arrested on 5/18/2020.

He has since pled guilty to Count 14, which alleged that he possessed the AR-15, despite being a convicted felon. On 11/15/21, he was sentenced to 10 years in federal prison for wire fraud and possession of a firearm by a felon. Houchins was also sentenced to serve three years of supervised release and to pay restitution of $1.7 million to his victims.  

In his press release, Acting United States Attorney G. Norman Acker, III said, “With this plea, this office brings to justice a dangerous man who defrauded numerous real estate investors in North Carolina and elsewhere. We are grateful for the work of our federal, state, and local counterparts for their combined efforts to ensure that the defendant pays a serious price for his crimes.”

Be the Most Ethical Agent in Your Market

Clearly, Mouchin missed out on at least a few Ethics courses over the past few years. Bad actors in the industry make it all the more important for you to center transparency, honesty, and goodwill in every real estate transaction.

Not only is acting ethically the right thing to do, but agents can also promote themselves by sharing their morals in their marketing materials, making it simple to distinguish themselves as the real estate hero their town deserves.

Ready to Start Your Career With North Carolina Real Estate Courses From The CE Shop?

Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow North Carolinians with the real estate they’re looking for, or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date with everything happening in North Carolina? Join our Southern Real Estate Facebook Group!