Attorney Cops Guilty Plea To Using Falsified Legal Descriptions & Forged Lien Releases To Fraudulently Pocket Over $18 Million; Defendant Purportedly Unencumbered, Then Reused Real Property As Collateral For Additional Financing Transactions; Banks, Title Insurers, Investors Among Those Licking Their Wounds

From the Office of the U.S. Attorney (Raleigh, North Carolina):

• The United States Attorney’s Office announced that [...] JOSEPH HAL KINLAW, JR., 63, of Bald Head Island, North Carolina, pled guilty to Bank Fraud.(1)
  
  Based upon the Criminal Information and evidence offered at the time of KINLAW’s guilty plea, KINLAW was a licensed North Carolina attorney who operated various alleged real estate investment and development entities on behalf of investors. KINLAW used the entities to obtain real estate development loans from Branch Banking and Trust (BB&T), and First Citizens Bank. BB&T and First Citizens Bank extended loans to these entities under the auspices that the entities would be engaged in the development of residential real estate in various subdivisions in the area of Camp Lejeune in Onslow County.
  
  Between January of 2011 and April of 2013, KINLAW used the real estate development entities to defraud BB&T and First Citizens Bank by falsifying the legal descriptions of the loan collateral, and by falsifying releases of the collateral.
  
  By drafting a false legal description of the property, KINLAW was able to use the collateral for other real estate investment activities and loans. By fraudulently releasing the banks’ collateral before the banks’ loans had been satisfied, KINLAW was able, in several instances, to convey the collateral to third parties for value and continue the scheme.
  
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  Because KINLAW had substituted false legal descriptions of bank collateral, and fraudulently conveyed bank collateral, BB&T and First Citizens Bank were unable to capture their loan losses in foreclosure. Various title insurance companies and investors also lost substantial funds due to the scheme. While the exact amount of the loss remains the subject of investigation, losses are presently anticipated to exceed $18 Million.

For more, see Bald Head Island Attorney And Real Estate Developer Pleads Guilty To Bank Fraud.

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(1) Kinlaw's handiwork also led to his disbarment. See Former Robeson attorney, Kinlaw, disbarred.