Feds: Mortgage loans funded Orange County marijuana grow houses
Posted July 24, 2015 10:21 a.m. EDT
Updated July 24, 2015 6:47 p.m. EDT
Durham, N.C. — The former chief executive officer of a Durham financial services company is one of three men in trouble with federal authorities and linked to a multi-million dollar marijuana ring.
Jotham Walker Pruitt pleaded guilty to one count each of bank fraud, filing false tax returns and money laundering after allegedly buying multiple homes in Orange County that were turned into marijuana grow houses he operated along with Aubrey Pruitt and Dustin Fisher.
Federal prosecutors say Pruitt got more than $1.5 million in bank loans to buy the homes. Pruitt told the banks he'd finance the homes with rental and investment income. Instead, prosecutors say they were totally financed through drug sales.
Pruitt could face up to 53 years in prison and $700,000 in fines. He has not been charged with any drug crimes.
According to court documents, Pruitt told multiple banks between December 2005 and December 2010 that he was buying homes for rental purposes. Instead, each of the homes was modified to support marijuana growth. Prosecutors said those modifications damaged each of the homes, making them unlivable.
The homes, located at 6557 New Sharon Church Road in Rougemont and 3812 New Sharon Church Road, 3818 New Sharon Church Road, 2622 Miller Road, and 1414 Laurel Lane, all in Hillsborough, had to be torn down and rebuilt. The properties have since been sold.
According to his LinkedIn page, Pruitt was the CEO of CinchPoint, a financial services firm. He's also linked to Ramses Capital Partners, a financial advisory company in Chapel Hill. Federal agents say those were shell companies the men used launder the nearly $4 million they made between 2005 and 2010.
The FBI was tipped off by a random audit of one of the businesses, and agents say it soon became clear those businesses were fakes and the millions of dollars they were pulling in were coming from somewhere else.
In filings with the Securities Exchange Commission, Pruitt declined to report how much revenue the companies made in 2008 and 2010, but a warrant shows the men used their income to buy expensive cars and kept thousands of dollars on hand.