WRAL Investigates

Dead Harnett businessman at center of money probe

Posted September 21, 2010
Updated October 7, 2010

— Banks and individuals could have lost as much as $32 million in dealings with a Harnett County businessman who recently committed suicide.

Ray Mulkey Jr., 63, was found dead in North Myrtle Beach, S.C., on Aug. 16. Authorities ruled his death a suicide.

Mulkey was well-known in Harnett and Cumberland counties. He owned or was a partner in four companies that dealt with financing and real estate: Mulkey & Associates Inc., North Carolina Premium Finance Cos. Inc., Ray Mulkey Realty Inc. and Southeastern Insurance Services.

Almost all of the $8 million in assets listed by his estate has already been claimed, and the estate lists almost $41 million in liabilities, including money owed to 21 banks and numerous individuals.

Fayetteville attorney Lonnie Player said 11 of his clients gave money to Mulkey with a promise of repayment with 12 percent interest. He said he believes Mulkey engaged in a Ponzi scheme, and his clients have filed claims against the estate totaling $2.3 million.

"He was just using the money not for its intended purpose. He was simply using it to advance the scheme," Player said, adding that he plans to contact law enforcement authorities about the case and file suit against Mulkey's estate.

WRAL Investigates Dead Harnett businessman at center of money probe

Mulkey paid the interest on time, Player said, but never repaid any principal of the investments. He said Mulkey's reputation as a pillar of the community duped investors.

"He was showing tens of millions of dollars in accounts receivable when, actually, the legitimate receivables totaled only about $3 million," he said. "I'm not so sure that anyone should have seen at the time that this was some sort of artifice to defraud people."

One of the biggest losers in the apparent fraud is Dunn-based New Century Bank, which Mulkey helped start several years ago.

The bank recently reported in a U.S. Securities and Exchange Commission filing that an investigation uncovered up to $11 million in bad loans. Bank Chief Operating Officer Lisa Campbell declined to comment on whether the loans were tied to Mulkey.

Others who sat on the New Century board with Mulkey included former Senate Majority Leader Tony Rand and former state Transportation Secretary Lyndo Tippett.

Player said he believes the bank was a victim in the alleged scheme and wasn't involved otherwise.

The state Department of Insurance is auditing Mulkey's insurance business after the estate administrator contacted officials about the firm's debts.

32 Comments

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  • cblackman Oct 14, 2010

    Others have to be involved...I have a family member that has borrow operating money every spring...took almost two months for the process of reviewing, verifying assets, etc. The paperwork goes through not one but three approval/disapproval processes. Did Mr. Mulkey's paperwork follow the same process? If it did, then definately there are others involved. If it didn't, then why not? Still other folks involved. Is and always will be the good old boy way of doing business. It isn't what you own, how hard you work, your ability to repay, it's WHO you think you are and WHO you know.

  • BKind21Another Sep 22, 2010

    You're right beachboater, party affiliation has nothing to do with it....however, Tippet amd Rand ARE BOTH CROOKS!

  • Weetie Sep 22, 2010

    Welcome to the City of Dunn where nothing is as it seems....is a perfect statement.

  • beachboater Sep 22, 2010

    This has nothing to do with politics or the Raleigh mentality of corruption. The guy duped the bank. Trippet and Rand just happened to be on the board. Most likely as some type of figurhead.

    He was a crook. There are crooks of all types. And party affiliaiton has nothing to do with it.

  • mrs.csm Sep 22, 2010

    WHO CARES about party affiliation?!?! You are who you are!! DUH!!

  • thevickfamily Sep 22, 2010

    You just really never know about people...

  • Its All Right Here Sep 22, 2010

    Welcome to the City of Dunn where nothing is as it seems. In time, all the bricks will fall from the foundation and underpinning, then many more of the castles will fall. The difference in yesterday's rogues and their descendants is the parents were smart in managing the money. Sure, they were crooked, but they actually knew how to make the money work. Their offspring only know how to cheat and steal so they get caught. Hope this is just the beginning, for it is long overdue for the "jet set" and "country club crowd" to get their just dessert.

  • reneejernigan Sep 22, 2010

    This is the least of Dunn's worries. I grew up there and moved away 30 years ago. We are talking about disappearing life insurance policies, fake mortgages. I am sure the banks knew what was going on. My sister paid off a loan after her husband died and the money supposedly never was credited. I am talking in the thousands of dollars. When she confronted the head man at the bank (won't mention name)he stated,"get all the lawyers you want". We have been waiting for almost 11 years and no justice has come. Missing trust funds, experiments done on a family of children in 1972 right there at the hospital, being used as guinea pigs.

  • Caveman93 Sep 22, 2010

    I would expect this is just the tip of the iceberg. Expect more fraud and scams being exposed all over the country as the markets fail.

  • amazedasIgaize Sep 22, 2010

    State Board of Elections states he was registered as a Republican.

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