Triangle businesswoman pleads guilty to fraud
Posted November 21, 2012 2:35 p.m. EST
Updated November 21, 2012 7:28 p.m. EST
Raleigh, N.C. — Carolyn Grant, a well-known Triangle businesswoman who has run unsuccessfully for Congress and Raleigh mayor, pleaded guilty Wednesday to a felony count of mail fraud in a real-estate investment scam.
She could face up to 20 years in prison when she is sentenced in federal court Feb. 18. However, Assistant U.S. Attorney David Bragdon said Grant likely will receive a sentence of six to seven years.
"Grant defrauded investors out of millions of dollars," he said, estimating the amount is somewhere between $2.5 million to $7 million.
According to court documents, Grant lied to investors, telling them their money was used on real estate projects when in fact it was used for her personal and business expenses and to pay back investors.
Grant showed little emotion in court and did not respond to media questions. But the investors who lost in her scheme shared their deep sense of betrayal.
"It's hard to describe what it's like to have someone court you as a friend and business colleague, and then completely use you," said Elizabeth Long.
Kevin Ellen said he invested $325,000 with Grant for a development project that never materialized.
"I met with Carolyn probably multiple times over the last three years to talk about where's the money going to come from, and how come it's not being paid back," he said. "It's interesting to see someone claiming they were doing the right thing for you for so long suddenly turn around and say, 'Yes, I'm guilty.'"
Defense attorney Woody Webb Sr. said Grant got caught up in the real estate boom six years ago and couldn't repay investors as the market collapsed at the start of the recession.
"She's clearly very sorry and remorseful for what she's done," Webb said. "She accepts responsibility for everything she did, and she looks forward to her sentencing and, hopefully, repaying as much restitution as possible."
The mail fraud involved misrepresenting information about a real estate project on Louisburg Road in a June 2007 mailing to investors and potential investors, he said.
The North Carolina Secretary of State's Office issued a cease and desist order against Grant in August 2011 after allegations surfaced that she failed to repay millions of dollars she borrowed from friends and associates for real estate deals and personal loans.
Grant promised high returns, but many investors said they never got any money back and that they were misled about where their money was going, authorities said last year.
Webb said Grant has admitted that some of the money from investors has been misspent.
Grant surrendered her real estate license and the license to her Raleigh-based real estate investment company, Omega Property Group, a year ago. She ran unsuccessfully for Raleigh mayor in 1999 and Congress in 2002.
She currently works for another company and asked the court Wednesday if she could be allowed to travel on business to Haiti. She said she hopes to get paid and use the money toward restitution.
Bragdon objected to the travel, but the judge said he would consider it.
"Ultimately, it doesn't really matter how long she's put away for," Ellen said. "The problem is how do you get your cash back."