Dunn, N.C. — 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."
"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.