FOR IMMEDIATE RELEASE:
THURSDAY, March 23, 2006
RALEIGH - United States Attorney Frank D. Whitney announced that three men have entered guilty pleas on federal conspiracy charges. DONALD W. GUPTON, of Henderson, North Carolina, charged in a Criminal Information filed on December 22, 2005, pled guilty today to conspiracy to commit mail fraud, wire fraud and making material false statements as well as conspiracy to commit money laundering. RICHARD D. MEADOR, of Kittrell, North Carolina, charged in a Criminal Information filed on January 25, 2006, also pled guilty today to conspiracy to commit money laundering. DONALD SCOTT CARROLL, of Henderson, North Carolina, charged in a Criminal Information filed December 22, 2005, pled guilty on February 23, 2006, to conspiracy to commit mail fraud, wire fraud, false statements and bank fraud. Sentencing hearings will be at a later date.
GUPTON, a prominent business man in Henderson, North Carolina, was president of Donald W. Gupton, Inc. which owned and operated Dynasty Homes of Henderson, Superior House Center, and Creative Real Estate and Manufacturing Housing Sales Center. According to filed documents, GUPTON, MEADOR and CARROLL falsified information on loan applications, provided false trade-in information and titles, provided false gift letters, and false down payment information on loan applications for prospective applicants. This was done so the buyer/borrower would have a lower debt to income ratio qualifying them for a loan. Between 1999 and 2002, the conspirators sold in excess of 150 manufactured homes resulting in HUD mortgages exceeding $11,000,000.
GUPTON used the proceeds from the fraudulent loan activity to purchase real and personal property for himself and to purchase properties placed in the names of CRE Properties, LLC and M&G Properties II, Inc. The proceeds were also used to pay employee commissions, bogus gift funds and business expenses.
United States Attorney Frank D. Whitney states "One of the highest priorities of the U. S. Department of Justice is to ensure that taxpayer funded programs, like this HUD administered program, do not fall prey to fraud and abuse. This is an important case which reinforces that message."
Kenneth M. Donohue, Inspector General for the U.S. Department of Housing and Urban Development, Office of Inspector General states, “This joint prosecutorial effort by the U.S. Attorney’s Office, HUD’s Office of Inspector General, Internal Revenue Service’s Criminal Investigation Division and the North Carolina Real Estate Commission has helped send a strong message that those who seek to unlawfully profit by defrauding programs within HUD will be vigorously prosecuted.”
Investigation of the case was conducted by HUD’s Office of Inspector General, Internal Revenue Service’s Criminal Investigation Division and the North Carolina Real Estate Commission. Assistant U. S. Attorney Banumathi Rangarajan is prosecuting the case for the United States.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.