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Developer sentenced in real estate Ponzi scheme

Posted on November 19, 2021

Updated on November 21, 2021

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Houchins

Houchins

A Sanford real estate developer who claimed to own properties in southern Nash County and surrounding areas as part of a Ponzi scheme has been sentenced to 10 years in federal prison.

Joshua Matthew Houchins, 36, pleaded guilty in June to federal charges of wire fraud and firearm possession by a felon. A judge sentenced Houchins last week to a decade in prison and three years of supervised release. He also was ordered to pay $1.7 million in restitution to the scheme’s victims.

The owner of several real estate development companies, Houchins is accused of swindling investors, possessing a machine gun as a felon and threatening his estranged wife in a photograph wearing a mask and tactical vest, according to a federal indictment.

“With this plea, this office brings to justice a dangerous man who defrauded numerous real estate investors in North Carolina and elsewhere,” Norman Acker, acting U.S. attorney for the Eastern District of North Carolina, said in June.

Acker said he’s grateful for federal, state and local authorities’ combined efforts to ensure Houchins pays a serious price for his crimes.

From 2014-18, Houchins owned and operated Rossshire Development, Greenstone Ventures and Modern South Development. He used these limited-liability corporations to defraud real estate investors, according to federal indictments.

“Specifically, Houchins solicited investment monies by telling victims that their money would be ‘put to work’ on a specific property, and further represented that the investments would be secured by deeds of trust filed with the county register of deeds,” according to a press release issued by Don Connelly, public information officer for the U.S. Department of Justice.

Prosecutors say Houchins regularly used the investment money on other projects or for personal expenses.

“The investor promissory notes were not secured by a deed of trust as promised. In some instances, Houchins did not even own the property that was the subject of the investment, and as such, could not truthfully grant a deed of trust to the investor,” Connelly said.

After Houchins diverted investor money away from the property on which the funds were supposed to be spent, he failed to develop and sell the properties, according to the indictment.

“Houchins then defaulted on the notes by failing to pay investors their promised returns. The investors were unable to foreclose upon the investment properties because Houchins had not secured the promissory notes with a deed of trust filed, thereby resulting in losses to the investors,” Connelly said.

As a part his plea deal, Houchins agreed to make restitution to all victims for losses arising from the scheme and any related schemes.

A federal grand jury began investigating Houchins in 2018. Subpoenas to Houchins’ attorney and various real estate companies resulted in only a small amount of documentation. Houchins admitted in a February 2020 letter that he had “destroyed all of the evidence,” according to the indictment.

Houchins, who had recently separated from his wife, began to send her harassing messages. She obtained a domestic violence protection order that barred Houchins from contacting, threatening or harassing her, according to court records.

Houchins was convicted of writing more than $2,000 in worthless checks in Moore County in 2016, according to the N.C. Department of Public Safety. The felony conviction means Houchins was already prohibited from possessing a firearm, but the protective order further prohibited his gun ownership.

In March 2020, Houchins told friends that his wife had “run to the police” and that he has “no mercy on a lying rat,” according to the indictment.

Around a month later, the superseding indictment alleges that Houchins sent threatening communications to his wife’s friends and family members, including photographs of Houchins wearing a mask and tactical vest.

The indictment charges that following Houchins’ arrest, internet searches on his electronic devices found searches for “killing your wife over love.”

At the time of his arrest, Houchins had a Ruger AR-15, four magazines, a double canister magazine containing 100 rounds of ammunition, two boxes of .223-caliber ammunition and a tactical vest.

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