Wednesday, June 4, 2014

Fraudulent Modular Home Crooks Get No Jail Time

Recent court orders bring to an end North Carolina’s long-running case against an elaborate scheme that deceived consumers into buying overpriced manufactured homes and agreeing to loans they couldn’t afford, Attorney General Roy Cooper said today.

CLICK HERE to read previous article.

In the case against Phoenix Housing Group and W.R. Starkey Mortgage, Cooper’s office previously obtained nearly $4.3 million in refunds for consumers and worked with federal authorities who brought criminal charges against several individual defendants.

Cooper filed suit in November, 2009 against three companies and several individuals seeking to stop the scheme permanently and win back money for consumers. The companies involved in the case were:

  • Phoenix Housing Group, Inc. (Phoenix) sold manufactured homes and land/home packages and arranged financing for buyers. The company, headquartered in Greensboro, also did business as HomesAmerica and Southern Showcase Housing and has offices in Asheboro, Asheville, Burlington, Granite Falls, Greensboro, Hendersonville and Winston-Salem.
  • K&B Homebuilders, Inc.(K&B) sold stick-built homes, modular home/land packages, and foreclosed homes in North Carolina. K&B was founded by a former Phoenix employee and employed several sales agents who used to work at the Phoenix store in Granite Falls.
  • W.R. Starkey Mortgage, L.L.P (Starkey) of Plano, Texas provided financing for consumers who bought homes from Phoenix.

Recently, Cooper’s office won judgments against the three remaining defendants in the case, Ike Vinson, Dennis Setzer, and Yo Xey Her. No jail time for any of them.

Under a consent judgment, Ike Vinson, a former mortgage loan officer for Starkey, is banned from the mortgage business in North Carolina and will have to pay $100,000 if he violates the judgment.

Under a default judgment, Dennis Setzer, a former sales agent for Phoenix at its Granite Falls location, is banned from the manufactured and modular home business in North Carolina. Setzer was ordered by the court to pay civil penalties of $125,000, $5,000 for each of 25 land/home packages he sold fraudulently.

Under a default judgment, Yo Xey Her(also known as Joe Herr), a former sales agent for Phoenix at its Granite Falls location, is also banned from the manufactured and modular home business in North Carolina. Her was ordered by the court to pay civil penalties of $220,000, $5,000 for each of 44 land/home packages he sold fraudulently.

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