ABC11 Eyewitness News I-Team Troubleshooter Diane Wilson exposed the scam when it first happened more than a year ago. The multi-million dollar mortgage scheme ripped off Triangle residents and banks.
Douglas Scott Allen pleaded guilty Friday to five counts of obtaining property under false pretenses of more than $100,000. The charges relate to a rent-to-own scam with a company Allen owned called Saving Carolina.
In all, investigators say the scheme happened throughout the Triangle and involved 16 houses that Saving Carolina found buyers for.
"There was an act of fraud to obtain the mortgage loan, specifically false verification of employment, false verification of income to entice the loan or banks or loan officers to approve the loan to allow the mortgage to be closed and property be purchased," the prosecutor told the court Friday.
Prosecutors say once Allen got the home financed, Saving Carolina would find renters and promise them the dream of home ownership through rent to own.
"We don't have perfect credit; this was a program that helped people," victim Sherry Williams said. "We thought it was a great opportunity to own a house."
Saving Carolina put Williams in a Raleigh home and despite Williams making monthly rent payments to Saving Carolina; she received a foreclosure letter in the mail. She learned her rent payments weren't being made to the mortgage company.
The bank foreclosed on the home she dreamed of owning and she was forced to move out.
"It's heart breaking, it really is," Williams said. "The kids love it. We love it."
Besides Triangle residents losing out, investigators say the banks lost big.
"All together with these five properties, [the] total amount of fraud in this case is over $800,000 between the five loans and by the time you add the 11 other properties in Durham, you're talking about a multi-million dollar type of fraud deal," the prosecution said.
Despite the scheme being multi-million dollar, investigators say the people behind Saving Carolina didn't make all that money -- it was the banks that lost big. Prosecutors say Saving Carolina made money by getting kickbacks from builders whose houses they used and by collecting those rent payments.
A judge sentenced Allen to a minimum of almost four years to a maximum of six years behind bars. Allen still has 11 charges pending in Durham relating to the rent to own deal.
Besides Allen, three others have been convicted for their involvement.
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