No matter what trouble Ralph Edward McLaurin Jr. was in, he always seemed to get by.
State regulatory agencies gave the Chatham County real estate lawyer and broker the benefit of the doubt when it became clear that his personal financial problems affected his business. After McLaurin skipped out on paying his federal taxes for half of the 1990s, the N.C. State Bar suspended his license but stayed the suspension for three years, noting McLaurin’s good character, remorse and that the offense did not “involve misappropriation of any client funds.” The bar eventually suspended his law license because he never fully paid his taxes, but McLaurin, with roots in Chatham so deep that there is a road named after his family, emerged with his reputation relatively intact.
Out of the law business, McLaurin turned to the Real Estate Commission for a broker’s license. When the commission denied his initial application, citing McLaurin’s criminal tax delinquency, McLaurin called on high-ranking Chatham County officials to write letters of recommendation attesting to his honesty and integrity. Swayed by the outpouring of support, the commission granted McLaurin a salesperson license, which allowed him to act as an agent only with a licensed broker.
But court records show what regulatory boards and McLaurin’s esteemed colleagues seem to have missed: McLaurin’s financial wheelings and dealingsintentional or accidental, it’s hard to knowcost his clients thousands of dollars.
In an August 2003 lawsuit, Laura Richardson, who is paralyzed from the neck down, claimed that McLaurin, then her lawyer, pressed her to participate in a high-return “investment opportunity” with a $200,000 buy-in. Richardson wired the money to McLaurin’s trust account. When McLaurin failed to present investment paperwork and issue regular interest payments, Richardson alleged her lawyer had committed fraud.
Richardson couldn’t be reached by the Independent, but her lawsuit was eventually dismissed when a mediator helped the two parties settle out of court; McLaurin’s malpractice insurance paid Richardson’s claim.
McLaurin says that he used Richardson’s money and lost $300,000 of his own savings in a failed investment opportunity. He says he couldn’t go into more detail because he signed a confidential disclosure statement promising not to talk about the investment.
Waddell Goldston and his family, whose Chatham roots are deep but not as well-connected, claimed McLaurin took $14,000 they had entrusted to him.
Goldston and his family retained Richardson in early 2002 to help divide some inherited land. “My grandmother farmed the land,” Goldston says. “I think in her deed she got that land for $10 and a promise to work. She had the foresight to put her name and her heirs on the deed.” The family decided to sell $21,000 worth of timber from the tract to help pay the costs of dividing the land, and then entrusted the proceeds to McLaurin until all legal matters were resolved. Over the next four years, McLaurin made almost $7,000 in payments on behalf of Goldston and his family. In 2006, when the legal matters were over, Goldston began to inquire about his family’s money. “When I asked him about how much money was in the account, he couldn’t tell me,” Goldston says. “When I asked him how much he would charge, he would say, ‘It ain’t gonna be much.’”
McLaurin eventually disappeared, moving out of his office and failing to return Goldston’s phone calls, and the two never saw each other again. When Goldston and his family sued earlier this year, McLaurin didn’t respond. “I really thought he was straight up,” Goldston says of McLaurin. “That was my first time dealing with a lawyer. I was expecting him to be on my side.”
In April of this year, McLaurin wrote the Goldstons a check for $8,200 from his trust account (he subtracted $6,000 in legal fees from what he owed them), but by then it was too late. Judge Abraham Jones issued a default judgment for $100,000 in McLaurin’s absence, along with an order to the Real Estate Commission prohibiting McLaurin from handling client funds until he demonstrates “moral character, truthfulness, honesty and integrity.” But the Real Estate Commission hasn’t acted on the order and McLaurin still has an open trust account.
“The court did something we’ve never seen before,” says Commission legal counsel Thomas Miller. “The license law doesn’t anticipate a situation where in a civil suit a judge issues an injunction that impairs his ability to be a broker.”
Last month the commission wrote McLaurin a letter asking him to respond in writing to Goldston’s complaint. “Usually when the commission takes a risk, we don’t see them come back,” Miller says. “This was an unusual situation.”
For his part, McLaurin says he has made some mistakes but is making amends. “People who know me know that I work hard and that I try,” McLaurin says. “There’s a difference between making bad decisions intentionally to cause problems and making mistakes.” Goldston acknowledges the distinction, but puts McLaurin in the former camp.
McLaurin began practicing law in 1975. McLaurin, who comes from a prominent family, had an upstanding reputation in the community, handling hundreds of real estate deals without a problem. “He went to church with my mother,” says Chatham County Sheriff Richard Webster, who has known McLaurin since childhood and wrote a letter of recommendation to the Real Estate Commission attesting to his character. “He’s a great guy.”
But since the early 1990s, McLaurin has fought off several creditors and had to pay more than $30,000 in judgments. McLaurin managed to pay those judgments within months, but meanwhile, neglected to pay his income taxes. He didn’t file federal returns from 1992 through 1996, and he only filed the delinquent returns after a criminal investigator from the IRS contacted him.
In April 2000, a federal judge accepted McLaurin’s guilty plea to one count of misdemeanor failure to file taxes and ordered him to pay more than $250,000 in back taxes. That criminal offense and McLaurin’s ongoing failure to pay taxes led to his disbarment in 2003.
In June 2003, a month after it became clear that McLaurin was going to lose his law license, he applied for a license with the Real Estate Commission. Almost a year later, the Commission determined that McLaurin had “not satisfactorily demonstrated that you possess the character required of persons licensed as real estate brokers.” But McLaurin called on Chatham public officials to attest to his integrity. “As far as Edward’s reputation for honesty and integrity, there is no question in the community,” wrote Register of Deeds Reba Thomas. Sheriff Webster and then Tax Collector Frances Wilson echoed the sentiment.
“That was influential,” says Miller, the commission’s legal counsel. The commission denied McLaurin’s broker application, but granted him a salesperson license. The commission hadn’t heard anything about McLaurin until last month, when they received a letter from attorney Carlos Mahoney on behalf of his client, Waddell Goldston, urging the commission to prohibit McLaurin from handling client money.
Wilson and Thomas could not be reached for comment, but Sheriff Webster says he intended his letter to vouch for McLaurin’s personal integrity, not his business practices. “I can’t promote somebody breaking the law,” he says.
McLaurin says he hopes to keep building his real estate practice. “The only way you can bounce back is to take each day and work hard and not give up.” Meanwhile, he faces hundreds of thousands of dollars in debt and the imminent foreclosure of his home. The realty firm of Randy Voller, who is also the mayor of Pittsboro, loaned McLaurin the money for his home and is pushing the foreclosure proceedings. “Unfortunately, we’re in the same position that others are in and now we are enforcing the rights of the deed of trust,” Voller says. “We hope that we’ll be able to work it out.”