WRAL Investigates

Dunn stunned by fraud allegations against businessman

Posted September 22, 2010
Updated October 7, 2010

— The apparent double life of a successful Harnett County businessman that was uncovered by WRAL Investigates has left friends and acquaintances shocked and searching for answers.

Ray Mulkey Jr. was seen as a successful businessman who owned or was a partner in four companies that dealt with financing and real estate. His debtors now say he ran a Ponzi scheme that defrauded dozens of banks and individuals out of as much as $32 million.

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

"I couldn't believe some of the things that I heard about Ray. It was just unreal," Glynn Jernigan, an auto dealer in Dunn who had known Mulkey since high school, said Wednesday.

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. His clients have filed claims against the estate totaling $2.3 million.

"The money from new investors was being used primarily to fund interest payments to previous investors and to fund Mr. Mulkey's lifestyle," Player said, noting his clients never received repayment of any principal on their investments.

The lifestyle included noted generosity to his friends.

"You couldn't buy anything. Ray was always willing to pick up the tab," said Lynn Jernigan, Glynn Jernigan's brother and business partner. "He worked hard. He played hard. He was a likable, happy-go-lucky fellow."

WRAL Investigates Dunn stunned by fraud allegations against businessman

"He was full of business. He had a lot of business sense. He knew how to make a business go," Glynn Jernigan said.

Player said that image helped Mulkey dupe investors.

"People believed in him. They trusted him. It appeared to be legit," he said.

Player said he plans to file suit against Mulkey's estate and contact law enforcement authorities. The state Department of Insurance is auditing Mulkey's insurance business after the estate administrator contacted officials about the firm's debts.

Mulkey was a founding board member of Dunn-based New Century Bank, and bank President and Chief Executive William Hedgepeth II issued a statement Wednesday noting that the bank was pursuing legal action to reclaim about $11 million in fraudulent loans linked to Mulkey.

"The alleged fraudulent actions were neither a one-time occurrence, nor were they just recent activities. Based upon the best available information, it appears the activities occurred over a period of several years," Hedgepeth said, noting other banks in North and South Carolina and Tennessee were defrauded as well.

"(I feel) shock and disbelief that Ray would do something like that," Lynn Jernigan said.

"I think things just got out of hand with Ray," Glynn Jernigan said.

6 Comments

This story is closed for comments.

Oldest First
View all
  • reneejernigan Sep 28, 10:39 a.m.

    This case will probably get swept under the rug. The only response that the Attorney General's office can give from past experience is, "Get a lawyer this is a private matter." What is the Attorney General's office here for....I thought it was to protect the citizens of NC. People that talk or do the right thing in these cases, end up getting shot at, ran off the road, or worse. These people take money/trust funds, life insurance policies from hardworking people, and live high on the hog. They are the old school and no one wants to rock the boat. The media doesn't want to report on it, until they get pushed by the people. My sister has gone thru hell since she turned some of the ponzi scheme people in back in the early 2000's,in Dunn, no one has come to her rescue. We are getting hit from all sides. Cars watching our houses.

  • tgodsclay Sep 27, 5:10 p.m.

    WRAL please continue to follow this story... I do not believe that someone can go into a bank such as New Century Bank, Dunn NC and falsify information and get 11 Million dollars... sounds like the Banking Commission should do some investigating and maybe also the FDIC, Attorney General office...This does not make since...

  • jdupree Sep 23, 3:15 p.m.

    Notice how Beverly Perdue's right hand man Tony Rand is again involved on the fringe of something improper. Also the Former head of DMV, a Democratic appointee. These two served on the Board of Directors for the Bank Started by Mulkey that allowed him to obtain illegal loans on faked assetts. This is a shame for the Investors and they should remember who was part of this.

  • rebat007 Sep 23, 11:02 a.m.

    My husband and I were in an investment group in Dunn in the middle to late 90's. We never saw any returns and a group of us filed complaints to the directed FBI office in London.We had taken a trust out with a financial - estate planner about same time. Later after my husband's death in late 1999,the financial planner was exposed with a Ponzi scam. I believe he was caught in South Carolina and he served 5 years in federal prison.Google Elfindepan S.A. Since this time I have had fake mortgages on my property. I would like to sell my house but keep the funds as I know that my house was free and clear of debt.Any legal advice out there?

  • retiredcfcc Sep 23, 8:52 a.m.

    Goes again, where are your priorities in life. NEEDS or WANTS. WANTS can sure get you in trouble,high life living out of your means. Whereas living within your means can provide your NEEDS.Some people just like to live a big shot life, but ashame when you cheat others, to enable youself this lifestyle. What ever happened to honor and a GOOD NAME? GREED GREED GREED thats what happened.

  • trilbygibbons Sep 22, 6:33 p.m.

    "He knew how to make a business go," Glynn Jernigan said. Don't you mean he knew how to make a business go broke?