In September 2003, Alpine Properties of Raleigh sold Sidney Lowe six rundown houses in five towns, from Gastonia to Wilson. Lowe borrowed $374,000 from a bank to finance the purchase.
Lowe, who at the time was employed as an assistant NBA coach and is now the head coach of the N.C. State men’s basketball team, had probably heard the same flashy sales pitch that Alpine’s proprietor, James Thomas Webb, had been making to wealthy Triangle investorsmany of them African-Americans like himselffor many years. It went like this: Investors ponied up anywhere from $40,000 to multiple millions for Webb to buy one or dozens of aging, dilapidated houses in disadvantaged neighborhoods throughout North Carolina and in Virginia, fix them up and then sell thempurportedly at enormous profits for both the investors and Webb. At the same time, Webb claimed his business model helped spiff up distressed neighborhoods and provided affordable housing in minority communities.
And like most of the victims who gave Webb large sums, nearly five years later, Lowe has lost money on the deal, according to land records.
Of the six houses he bought, four have since been resold, at a combined price of $353,000, according to deeds on file in the various counties. Lowe still owns one house, in Jones County, for which he paid $64,000 in 2003, documents show. The sixth house, in Fayetteville, was seized by the city two years ago. Officials deemed it uninhabitable and condemned it after Lowe failed to repair or demolish it himself, according to Cumberland County court records.
Lowe did not respond to a request for an interview.
The details of the high-profile coach’s involvement with Webb surfaced this spring in documents filed by the N.C. State Bar in its case against lawyer Amy Robinson, who served as Webb’s real estate attorney for several years. As such, she shepherded hundreds of land transactions involving dozens of investors and millions of dollars that moved through Alpine Properties and various other corporate entities Webb controlled.
The Bar is seeking disciplinary action against Robinson, which could lead to her permanent disbarment.
In a 39-page complaint filed in February, Bar lawyers laid out 16 sets of land deals that Robinson oversaw between March 2003 and July 2004. They involved 35 properties in 18 towns and $2 million in sales.
The Bar is alleging that Robinson, while representing multiple parties in each transaction, knowingly provided false information to the federal government and to mortgage lenders on paperwork documenting the sales. For example, the Bar alleges, Robinson usually stated that buyers brought large sums of cash to closings when in fact the entire sale was financed by mortgages.
In the deal involving Lowe, for example, Robinson reported that the total sales price for the six houses was $450,000, with Lowe financing $374,000 and supplying the remaining $76,000 in cash at the closing. The Bar alleges that the real sales price was $374,000 and Lowe provided no additional casha pattern repeated in all the other deals, effectively inflating the value of the properties.
The Bar is not alleging that Robinson personally profited from the land salesproceeds went to Webb, to Alpine, or to prior investors, according to the complaint. However, in orchestrating them as Webb’s in-house attorney, the Bar alleges, Robinson “engaged in criminal conduct that reflects adversely on her honesty, trustworthiness or fitness to practice” and “engaged in conduct involving fraud, deceit, dishonesty or misrepresentation” in violation of Bar rules and regulations.
“By facilitating a fraudulent loan transaction, [the] defendant assisted a client in conduct that she knew was criminal or fraudulent,” the complaint alleges.
The Bar’s lengthy complaint is a 15-month snapshot of how Webb operated what has been described by disillusioned investors as a Ponzi scheme. State regulators in North Carolina and California have taken steps to prevent Webb from doing business in those two states; he’s believed to have relocated to Florida about three years ago.
A large majority of the transactions the Bar cites in its complaint involve Charlotte pharmacist John Sink, a major Webb investor. Sink, who was a principal in a company called Grand Summit that bought dozens of houses from Alpine, is also suing his former business partner in Wake County Superior Court in an attempt to recoup $2 million he claims Webb owes him.
Sink’s attorney, Jim Jorgensen, did not return phone calls.
Bar officials declined to discuss the specifics of Robinson’s case, which is scheduled for a hearing before a three-member panel in August. N.C. State Bar Deputy Counsel Margaret Cloutier said disciplinary action could range from a private reprimand to suspension or disbarment.
Robinson’s attorney, Dudley Witt, says his young, inexperienced client was fresh out of law school when Webb hired her, and that she did not knowingly violate either professional conduct rules or criminal laws.
“She did not know how to properly handle real estate transactions,” says Witt, a Winston-Salem lawyer who also represented disgraced former Durham District Attorney Mike Nifong in his Bar proceedings. “I’m hoping to make an argument that she shouldn’t be disbarred.”
Robinson is not currently practicing law, Witt says. She has not been charged with criminal activity by any law enforcement agency as of the present time, he said.
“She got sucked in by Mr. Webb just like everyone else,” Witt says. “It’s an unfortunate thing for everyone, especially her.”
While his former associate fights to hold onto her law license in Raleigh, Webb seems to have slipped through the cracks again.
He’s facing federal fraud charges from the U.S. Securities and Exchange Commission for his role as the mastermind of the giant real estate scheme. In a suit filed in November, federal agents accuse Webb, personally and through his many corporate entities, of engaging in a “real estate-based fraudulent investment scheme that raised at least $8.4 million from more than 80 investors.”
Last month, the U.S. government filed a motion to have Webb held in contempt of court for failing to produce financial records related to the case. According to court records, the last certified mail correspondence from the SEC to Webb, who is representing himself in the case, was returned unopened from his last known address.