A guardian for a former law enforcement officer has filed a complaint in court accusing three Buncombe attorneys and two others of fraud in a scheme to illegally sell his house and keep more than $40,000 in proceeds that belonged to him.
The complaint, filed on behalf of David Shroat, is among the first attempts to recoup money for a homeowner in real estate deals exposed by Asheville Watchdog in its investigative series, Equity Erased.
Shroat, a former Asheville police officer and Buncombe sheriff’s detective, was showing signs of dementia, according to his lawyer, when in 2018, his Arden house was sold through a series of property transfers and court actions. Shroat owned more than $40,000 in equity but came away with nothing.
The complaint names as “fraud defendants” the following people:
— Lisa Roberts, who has described herself as a housing advocate and is currently facing nine felony fraud charges in other real estate deals.
— Robert P. Tucker, II, a real estate investor and attorney who had worked with Roberts for years.
— Peter R. Henry, Tucker’s attorney who was also appointed to represent Shroat’s interests in the sale of his property.
— Ile Adaramola, Roberts’s attorney who notarized and filed what the complaint describes as documents with “numerous false statements.”
— Kirk Booth, a realtor who oversaw the court-ordered sale of the property.
“The Fraud Defendants carried out their scheme by preparing, signing, notarizing, and filing false pleadings, affidavits and reports with the Buncombe County Clerk of Court” and by “filing false deeds and other title documents,” according to the complaint, filed by Asheville attorneys Tikkun Gottschalk and Robert Deutsch on behalf of Victor Garlock, Shroat’s legal guardian.
None of the five named defendants responded to requests for comment from Asheville Watchdog.
Opportunity for profit
The scheme, according to Gottschalk and public records, began with the filing of a mortgage foreclosure.
As Asheville Watchdog found in Equity Erased, Roberts, Tucker and other investors often scoured new mortgage or tax foreclosure filings in Buncombe County court for leads on properties to purchase and flip for a profit.
Shroat, who jointly owned his house with his then girlfriend, Cathey Trimnal, had fallen behind on his mortgage payments.
“Like many people, he had a number of personal and health problems, which made it hard for him to manage his financial affairs,” Gottschalk told Asheville Watchdog.
Foreclosure proceedings began on April 16, 2018, with a public court filing. Also a matter of public record are mortgages and the property’s value, and those showed a potential for profit.
“It’s pure math,” Gottschalk said. “You say, ‘All right, I’ve found this mortgage foreclosure. The debt is $140,000; the tax value is $249,000. Even if it’s in horrible condition, there’s something to gain if I can get a deed from one of the owners.’ ”
Roberts contacted Trimnal, and according to Gottschalk, told her she worked in “low-income housing” and urged Trimnal to sell her interest to provide a home for “a nice, needy family.”
Shroat, then 71, had paid many of the expenses on the house, and Trimnal felt the house was more Shroat’s than hers, Gottschalk said. “She didn’t want a foreclosure on her record,” he said. “She wanted out of it.”
Trimnal did not respond to messages seeking comment but spoke to Gottschalk and provided him documentation showing Roberts offered her $3,500 for moving expenses and said she would pay off her portion of the mortgage, which would release Trimnal from the foreclosure proceedings.
Trimnal accepted the offer. But her moving expenses weren’t paid, and her portion of the mortgage was not paid off, until almost seven months later when Roberts sold the house to another buyer.
On May 22, 2018, a deed prepared by Adaramola transferred Trimnal’s 50 percent interest to VLM Investments LLC, Roberts’s company. Two days later, a new mortgage, prepared by Tucker, was recorded on the property, purportedly a loan to VLM Investments from 740 Biltmore Avenue Group, Tucker’s company, for $125,000.
Gottschalk said he has found no evidence that any money was loaned or paid back, but the mortgage created a public record that could deter any buyer who might want to purchase the house. One reason to do that, Gottschalk said, is “to make it look like the property was underwater in terms of debt to value.”
Forced sale sought
At this point Roberts’s company owned Trimnal’s half of the property, but Roberts needed Shroat’s half to sell it, Gottschalk said. “She either didn’t want to deal with him, she couldn’t deal with him,” he said. “She may have called him, and he didn’t respond.”
As Tucker had done in several cases uncovered by Asheville Watchdog, Roberts made use of a Jim Crow-era law that’s been exploited nationwide by investors to acquire real estate at below market value. The partition law allows any owner of a jointly owned property to ask the courts to order the entire property sold.
On June 5, 2018, Adaramola, on behalf of VLM Investments, filed a partition case against Shroat to force the sale of his interest.
As Asheville Watchdog previously reported, VLM, the initials of Roberts’s late grandmother, was incorporated in 2017 with Adaramola as registered agent and Roberts’s uncle, Eddie George of Gary, Ind., listed as chairman. But George said in an October 2018 complaint to the North Carolina Secretary of State that he had no knowledge of VLM and did not sign the legal documents bearing his name.
“As far as I can tell, Lisa Roberts had total control of VLM,” Gottschalk said.
Gottschalk obtained documents from Kirk Booth through a subpoena and shared them with Asheville Watchdog. Among them are emails from an account used by Roberts. One is signed Lisa Roberts-Allen, another “VLM,” and two “Eddie George” — all from the same email address.
Shroat can’t be found, court is told
On July 12, 2018, Adaramola wrote in a partition filing that VLM lacked “any information” on Shroat’s whereabouts and requested a guardian ad litem, a “disinterested person” appointed by the court to represent the interests of unlocatable parties in property cases.
At the time, court clerks in Buncombe selected guardians based on recommendations from the parties involved.
Henry “could not have been ‘disinterested,’ ” Gottschalk said. “No way.”
On Aug. 10, 2018, Henry wrote in a court filing that “after diligently searching,” he had been “unable to locate” Shroat.
Shroat, as Asheville Watchdog found, was living with a new girlfriend, Kelly Southerland, in Asheville and, having retired from the Buncombe Sheriff’s Office only eight months earlier, was still well known in the law enforcement community. His last job at the sheriff’s office was at the front desk in the same courthouse where the partition case was heard.
“In fact his location was known (or was readily discoverable),” Shroat’s complaint says.
Shroat never attended a hearing in the partition case because, Southerland told Asheville Watchdog, he never knew about it.
On Sept. 27, 2018, a court clerk granted VLM’s request to sell the property and appointed Kirk Booth, a realtor whom Gottschalk said Roberts knew, as the sale commissioner.
Emails obtained by Gottschalk show Booth sought instructions from Adaramola and submitted documents in court prepared by her and Tucker.
“Can you send me the paper work (sic) that describes the commissioner’s duties…?” Booth wrote to Adaramola on Sept. 28, 2018.
Adaramola sent a description and replied, “I am going to draft the final account once the sale is confirmed and you will need to sign and file with the clerk.”
In another email Tucker wrote to Adaramola, “I made some corrections to the Report of Sale. It’s good to go now.”
Roberts gets $40,118 … Shroat $0
On Oct. 8, 2018, Booth reported in court that he had sold the property for $145,000 to Asheville Home Funding, another of Roberts’s companies. “There were no other bidders,” Booth wrote in a court filing that said he had disbursed $137,750 to Wells Fargo for mortgage payoffs and $7,250 to himself for a “commissioner’s fee.”
Gottschalk alleges that sale never occurred. “The purported grantee/purchaser,” the complaint says, “never paid the purchase price.”
Roberts, through Asheville Home Funding, bought Shroat’s interest “basically for nothing,” Gottschalk told Asheville Watchdog. “They made it look like it was sold for $145,000, but it wasn’t because that was never paid.”
On Nov. 30, 2018, a deed prepared by Adaramola and signed by Booth transferred the property to Asheville Home Funding. On the same day, a mortgage satisfaction was recorded on the purported $125,000 loan from Tucker’s company to VLM. Tucker had signed the document nearly four months earlier.
“Tucker held on to the cancellation of his mortgage until late in the game to make it look like there was still debt exceeding the home’s value,” Gottschalk said.
One week later, on Dec. 7, 2018, Asheville Home Funding sold the property for $210,000. A closing statement shows Shroat’s mortgages were paid off. Booth received $6,300, Adaramola $2,500, and Trimnal $3,500 for “cleaning.”
After other costs, the remainder of the proceeds, $40,118, went to Asheville Home Funding.
Shroat’s take: $0.
Investigations ongoing, Shroat seeks compensation
Shroat’s complaint alleges the “Fraud Defendants conspired with each other to fraudulently obtain” his property and “kept for themselves” all of his equity.
The defendants — Tucker, Adaramola and Henry as attorneys, Booth as a realtor, and Roberts as a notary public — held professional licenses that carried “the obligation to be honest and candid,” the complaint says. The defendants “committed professional malpractice by their acts and omissions.”
The North Carolina Secretary of State, which investigates notary fraud, is leading an ongoing criminal investigation into real estate transactions involving Roberts, Tucker and possibly others. The North Carolina State Bar and the Consumer Protection Division of the North Carolina Attorney General are also investigating.
Besides the five individuals, Shroat’s complaint names as “Fraud Defendants” Asheville Home Funding, VLM Investments, 740 Biltmore Avenue Group, and Home Advocates and Limitless Outreach (HALO), another one of Roberts’s companies. The entities “had no legitimate business purpose separate and apart from this scheme and other similar schemes to acquire interests in real property for the personal benefit of the individuals,” the complaint says.
Shroat’s former house sold again in 2020 for $315,000.
The complaint seeks to return ownership of the property to Shroat or award him compensation and damages for his losses “through the fraudulent conduct of the Fraud Defendants.”
Holding fellow attorneys to account
Shroat, now 75, lives in an assisted living facility. In February 2021, he was declared incompetent and appointed a guardian, Victor Garlock, to manage his financial affairs. The incompetency order noted that Shroat was indigent.
“He was vulnerable,” Gottschalk said. “He had a lot of equity in his house … and they took advantage of it.”
Shroat’s loss “represents thousands of dollars that currently are not available for his care as he ages and his dementia worsens,” Garlock said. “It was also a very large percentage of his personal wealth that he spent his career in law enforcement accumulating.”
Gottschalk said he had no qualms about accusing fellow attorneys of fraud.
“As a lawyer, I live and breathe the obligation of being an officer of the court, being a person in the community who upholds and supports the justice system,” he said. “And when I see other lawyers who have been vested with that same authority and responsibility misusing it and taking advantage of people who are unfamiliar with the system, who are not lawyers, who don’t know how to protect themselves, I have no problem with holding them to account.”
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Sally Kestin is a Pulitzer Prize-winning investigative reporter.
Asheville Watchdog gratefully acknowledges the assistance of the Duke University School of Law’s First Amendment Clinic.