Local News

Pair sentenced for defrauding two NC banks

The state Department of Insurance has closed its investigation into a Harnett County businessman who some people claim ran a $40 million Ponzi scheme.

Posted Updated

RALEIGH, N.C. — A former loan officer and a disbarred real estate attorney were sentenced in federal court Tuesday to a combined seven years in prison for their roles in a mortgage fraud scheme against two North Carolina Banks.

Federal prosecutors say William Devaughn Orander III, a former attorney in Goldsboro, and Mark David Webb, a loan officer at both of the banks, were involved in approximately 60 to 80 fraudulent loans at Mount Olive-based Southern Bank and Trust and Dunn-based New Century Bank, causing losses of more than $1 million.

The crimes occurred over a four-year period beginning in 2004.

Orander pleaded guilty to one count of mail, wire and bank fraud and was sentenced to 42 months in prison and ordered to pay more than $700,000 in restitution.

Webb pleaded guilty to one count of conspiracy to commit bank fraud and was sentenced to 45 months in prison and ordered to pay $1,072,565.10 in restitution.

Both men were also sentenced to five years of probation.

Prosecutors, who asked for reduced sentences because of both Orander's and Webb's cooperation against a third man who was not sentenced Tuesday.

U.S. District Judge James Dever called the crimes serious offenses that merited serious punishments.

"Attorneys need to know that if they engage in this behavior … and they get caught, they will go to federal prison," he told Orander. "You failed to abide by the oath you took with the state. You breached the trust that was given to you."

Orander gave a lengthy apology to the court and to his family, including his four children – the oldest of whom is being treated for a brain tumor.

"I do accept responsibility for my actions. I am very sorry," he said. "It was the worst decision of my life. I've ruined my life."

"You knew it was wrong. To suggest otherwise is preposterous," Dever said. "You had the opportunity to tell Mr. Webb no, and you failed."

Webb, who also apologized to the banks, said he was trying to further his career.

"You failed miserably," Dever said. "Your poor choices are what brings you here today, and you will pay a price for those choices."

"I think loan officers need to know that, if they come here, they're going to federal prison and it's not going to be for a short time," Dever added.

The case is the second time in the past year that politically well-connected New Century Bank has been named as a fraud victim.

New Century Bank reported losses of nearly $5 million last year after a separate fraud by co- founder Raymond Lee Mulkey Jr.

New Century had loaned Mulkey millions to operate several finance companies he owned. He came under investigation after his suspected suicide in August 2010 at one of his homes in North Myrtle Beach, S.C.

Mulkey left behind more than $40 million in debts.

The scheme involving Webb and Orander allowed borrowers to not only purchase properties with no money of their own, but also to walk away from closing with as much as 50 percent of the purchase price of the property in cash, federal prosecutors said.

Southern Bank expected to end up losing nearly $284,000 and loaned at least $715,000 more than it would have if it knew the transactions were not truly to refinance other loans, a North Carolina State Bar panel determined when disbarring Orander last year.


Copyright 2023 by WRAL.com and the Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.