ponzi fraud
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bondi has cut enforcement? kash?
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AN 6 25
The former operator of one of the largest HomeVestors of America franchises has agreed to plead guilty to federal wire fraud in connection with a sprawling Ponzi scheme targeting people who believed they were investing in his real estate empire.
Federal prosecutors in Texas identified 80 victims defrauded of nearly $40 million by Charles Carrier since 2018. Though Carrier agreed to plead guilty to only one count of felony wire fraud involving one $200,000 transfer, he admitted to the broader scheme as part of the deal and agreed to pay restitution — the amount of which has yet to be determined.
The charge also carries a maximum 20-year prison sentence and the possibility of millions of dollars in fines. A federal judge will decide the sentence.
Carrier owned Dallas-based C&C Residential Properties, one of the most successful franchises in the HomeVestors chain, which is known for its “We Buy Ugly Houses” slogan. HomeVestors terminated Carrier’s franchise in October 2024, after receiving a tip that he had been defrauding investors. It has since sued him for infringing on the company’s assiduously protected trademark. Carrier has not yet responded to the lawsuit.
In a story published this month, ProPublica detailed how Carrier bilked millions of dollars from scores of investors across Texas, including both wealthy businesspeople and older adults of more modest means who depended on the investment income for daily expenses. According to new court documents, losses to individual investors range from $35,000 to $11.6 million. The plea agreement was filed in court two weeks after the article was published.
Carrier took loans from investors to finance his house-flipping business, initially using the money to buy and renovate older houses to sell for a profit. Carrier promised each loan would be secured by an ownership interest in a house and that he would pay 8%-10% interest in monthly installments over the course of the loan.
For many years, investors received reliable monthly payments. In 2018, however, Carrier started taking out multiple loans on individual properties, sometimes providing investors with deeds he never recorded and racking up debt far beyond the value of the houses, according to court documents. Carrier also admitted to forging signatures and notary stamps so he could sell properties without notifying the investors or paying off their notes, according to court documents. Carrier admitted to using investor money to “pay personal credit card balances, business operating expenses and interest obligations to earlier investors,” according to court documents.
Series Timeline
April 18, 2023
We sent HomeVestors of America questions about the findings of our reporting. Soon after, the CEO praised the reporting in a meeting with franchise owners but added that the company would “bury” the story once it was published.
May 11, 2023
Despite HomeVestors’ promise to hold its franchises to the highest ethical standards, we found some used deception and targeted the elderly, infirm and financially vulnerable while offering to buy their homes for far below market prices.
May 15, 2023
Five families discussed their experiences doing business with HomeVestors franchises, including a man who later died while waiting to be kicked out of his home. Some franchises had sued homeowners after they tried to unwind their deals.
June 13, 2023
The head of the Consumer Financial Protection Bureau cited ProPublica’s reporting before a U.S. Senate committee and called for more oversight of HomeVestors’ practices.
July 1, 2023
Despite HomeVestors’ efforts to “bury” ProPublica’s reporting, millions read the investigation and more than 40 media outlets featured our work, including The Washington Post, The Dallas Morning News and Apple News Today.
Aug. 1, 2023
Shortly after ProPublica asked for comment on reporting that showed a top HomeVestors franchise owner had stayed involved in operating the business despite a felony conviction, HomeVestors CEO David Hicks stepped down.
Jan. 24, 2024
HomeVestors continued to reform business practices in response to ProPublica’s reporting, including requiring franchises to provide homeowners considering selling to them with a disclosure that allows deals to be terminated within three days.
The fact that Carrier’s plea deal contains only a single charge left some victims even more angry.
“That’s ridiculous,” said Ron Carver, who lost $300,000 and whose father lost $200,000 before he died. “They will let him plead out and he might get a slap on the wrist.”
A spokesperson for the U.S. attorney’s office said they can’t comment on a pending case.
Carrier’s lawyer, Tom Pappas, said it wasn’t Carrier’s “intention to defraud anybody of their money.”
“Pretty much all of his money was put into his business to try and make it successful so investors would be successful,” Pappas said, adding that Carrier didn’t fund a lavish lifestyle. Without providing details, Pappas said changes in the real estate market “overtook” Carrier and “the thing just got away from him.”
Although Carrier agreed to plead to only one count, the entirety of the fraud identified by prosecutors will be considered by the judge during sentencing.
Pappas said Carrier is “committed to repaying every investor every dollar he can to make them whole.” Pappas said he expects the restitution will likely be “much lower” than the $40 million in losses identified by prosecutors, as the lawyers are wrangling over the value of the investors’ losses. In February, Carrier signed an asset liquidation agreement allowing prosecutors to oversee the sale of his remaining properties, with the proceeds going toward restitution.
Pappas said he expects Carrier will serve time in prison.
“Depending on the amount of the loss, there’s a strong possibility he may go to jail,” he said. “But again, we are doing everything we can to make everybody as whole as we can.”
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an 525 PP
How a 'We Buy Ugly Houses' franchise left a trail of financial wreckage across this red state
lost Investments: People who invested with a Dallas HomeVestors franchise, once touted as the largest, accuse the owner of operating a scheme that cost them tens of millions of dollars.
- Red Flags: HomeVestors says its franchises follow best business practices. But investors say lax oversight allowed the “We Buy Ugly Houses” brand to be used to further the scheme.
- Company Responds: HomeVestors has denied responsibility for the franchisee’s actions, saying its franchises are independently operated. It has sued the franchise owner.
These highlights were written by the reporters and editors who worked on this story.
Ronald Carver was skeptical when his investment adviser first tried to sell him on an “ugly houses” investment opportunity eight years ago. But once the Texas retiree heard the details, it seemed like a no-lose situation.
Carver would lend money to Charles Carrier, owner of Dallas-based C&C Residential Properties, a high-producing franchise in the HomeVestors of America house-flipping chain known for its ubiquitous “We Buy Ugly Houses” advertisements. The business would then use the dollars to purchase properties in which Carver would receive an ownership stake securing his investment and an annual return of 9%, paid in monthly installments.
“Worst case, I would end up with a property worth more than what the loan was,” Carver said of the pitch.
Carver started with a $115,000 loan in 2017. And sure enough, the interest payments arrived each month.
He had worked three decades at a nuclear power plant, and retired without a pension and before he could collect Social Security. He and his wife lived off the investment income.
The deal seemed so good, Carver talked his elderly father into investing, starting with $50,000. As the monthly checks arrived as promised, both men increased their investments. By 2024, Carver estimates they had about $700,000 invested with Carrier.
Then, last fall, the checks stopped. The money Carver and his father had invested was gone.
Carrier is accused of orchestrating a yearslong Ponzi scheme, bilking tens of millions of dollars from scores of investors, according to multiple lawsuits and interviews with people who said they lost money. The financial wreckage is strewn across Texas, having swept up both wealthy investors and older people with modest incomes who dug into retirement savings on the advice of the same investment advisor used by Carver.
As early as 2020, Carrier had begun taking out multiple loans on individual properties — some of which he never owned. In cases reviewed by ProPublica, as many as five notes were recorded against a single property, far exceeding the property’s value. Carrier also failed to properly record many deeds that were supposed to secure the loans, accumulating more debt than he could ever repay while investors remained unaware they had no collateral for their investments.
“It’s incalculable the amount of damage this guy did,” said one investor who lost about $1 million and asked not to be named to avoid embarrassment and not to interfere with a criminal investigation into Carrier’s scheme. “He’s ruined some lives.”
Carrier, who declined an interview request, said in a brief phone conversation that he’s not trying to avoid responsibility for the harm he caused. “When this thing finally stopped, it was completely driven by me saying ‘enough’ and going to the people and saying, ‘Here’s the mess I’ve created,’” he said. “This is a mess created by me.”
Series Timeline
April 18, 2023...
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