Three Buncombe attorneys and others involved in a series of real estate transactions that stripped a former law enforcement officer of his house and more than $40,000 in equity have agreed to pay $116,000 to settle a civil complaint accusing them of fraud.
A guardianship for David Shroat, a former Asheville police officer and Buncombe sheriff’s detective who suffers from dementia, will receive the proceeds from the settlements, said Tikkun Gottschalk, an Asheville attorney who filed the complaint on behalf of Shroat’s legal guardian. The defendants admitted no wrongdoing, Gottschalk said.
Shroat’s case was profiled in Asheville Watchdog’s investigative series, Equity Erased. The story of how he lost his Arden house involved a Civil War-era property law that’s been widely abused and Buncombe attorneys and real estate investors who, according to the complaint, engaged in a scheme to take ownership of Shroat’s house and more than $40,000 in equity that belonged to him.
The complaint named five people as “fraud defendants” who signed, notarized and filed “false pleadings, affidavits and reports with the Buncombe County Clerk of Court” and “false deeds and other title documents.” The five were:
- Lisa K. Roberts, an investor whose companies forced a court-ordered sale of Shroat’s home, acquired the title to it and sold it a week later for a gain of more than $40,000. Roberts, who also goes by her married name, Roberts-Allen, faces 43 criminal fraud and forgery charges in real estate deals following The Watchdog’s reporting, including one involving Shroat’s property.
- Robert P. Tucker II, a real estate investor and attorney who had been involved with Roberts in other real estate deals for years. His company recorded a mortgage on Shroat’s property that, according to the complaint, “created a false lien and cloud on the title,” dissuading other buyers.
- Peter R. Henry, who had been Tucker’s attorney and was Shroat’s court-appointed guardian ad litem in the sale. Henry reported being “unable to locate” Shroat even though the complaint said Shroat was easy to find.
- Ilesanmi Adaramola, the attorney for Roberts’ companies who prepared court filings and official records that the complaint said contained “numerous false statements.” Adaramola faces six felony counts of notary fraud on real estate documents involving one of Roberts’ companies, including the purported mortgage from Tucker’s company on Shroat’s property.
- Kirk Booth, a real estate agent who was appointed commissioner over the court-ordered sale. Booth reported selling the property in court documents that he has since admitted were “incorrect.”
Booth, Henry, and Tucker have not been charged with any criminal wrongdoing.
Roberts’ husband, Gary Allen, was added as a defendant when, two days after the complaint was filed, Roberts transferred her home in Biltmore Park to him in an attempt to “hinder, delay and defraud creditors,” including Shroat, an amended complaint said.
Asheville Watchdog attempted to reach all of the defendants and their attorneys. Only Henry’s lawyer, Garland Byers of Rutherfordton, responded and declined to comment.
The settlements, which are not public court documents, totaled $116,227, Gottschalk said. He said he could not provide a breakdown of how much each defendant paid but that the payments came from all five plus two title insurers involved in the transactions.
“When we settle cases, all the agreements are always, ‘We deny we owe you anything, all your allegations are wrong, but in the interest of settlement, we’re going to pay some money,’ ” Gottschalk said.
Gottschalk said the settlements got Shroat “his money back” and then some.
“The people who took his equity paid more than they got for taking it,” he said.
Shroat’s guardian, Black Mountain attorney Victor Garlock, said Shroat owed back taxes after failing to file income tax returns for years due to his declining health and “was facing possible IRS garnishment of his Social Security benefits.”
“Now that I have the settlement proceeds, I will be able to pay Mr. Shroat’s tax debt and ensure that he will be able to continue to receive the care he needs,” Garlock told The Watchdog.
Shroat’s daughter, Lisa Ballew, said the payments are long overdue justice for her father, who lives in an assisted living facility in Asheville.
“Wonderful, that is wonderful,” she said.
Roberts gets $40,118, Shroat $0
Shroat lost his home through a web of real estate transactions that began in 2018 when he fell behind on his mortgage payments, triggering foreclosure proceedings. Shroat had purchased the home with his former girlfriend, Cathey Trimnal, who was no longer living in the house but was listed as a borrower on the mortgage.
Trimnal technically owned half the property, but Shroat had taken primary responsibility for the payments and upkeep, Gottschalk has said. Trimnal did not want a foreclosure on her record and accepted an offer from Roberts’ company, VLM Investments LLC, for $3,500 that included paying off the mortgage, according to Gottschalk.
A deed prepared by Adaramola transferred Trimnal’s 50 percent ownership of the property to VLM.
Adaramola, on behalf of VLM, then filed a petition in court under what’s known as the partition law to force the sale of the property.
The Jim Crow-era law, which has been exploited nationwide by investors to acquire real estate at below market value, allows any owner of a jointly owned property to ask the courts to order the entire property sold.
Shroat had moved out of the house by then, and Adaramola reported in a court filing that he could not be found. She requested a guardian ad litem, a “disinterested person” appointed by the court to find and 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.
Peter Henry was appointed Shroat’s guardian ad litem. Henry was Tucker’s lawyer and was being monitored by Adaramola in a 2016 North Carolina State Bar disciplinary action, and, according to Gottschalk, was not “disinterested.”
Henry reported in a court filing that “after diligently searching” for Shroat, he had been “unable to locate” him. “In fact his location was known,” the complaint said, “or was readily discoverable.”
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.
Without input from Shroat, a court clerk ordered his property to be sold and appointed Kirk Booth, a real estate agent whom Gottschalk said Roberts knew, as the sale commissioner.
Booth reported in court documents that he held a sale on Oct. 8, 2018, at the property and sold it to another one of Roberts’ companies, Asheville Home Funding, Inc., for $145,000. “There were no other bidders,” one document says.
Other buyers were likely deterred from bidding, Gottschalk argued, because of a purported mortgage between Tucker’s company and VLM. Dated the same day as the deed from Trimnal to VLM, the document said VLM borrowed $125,000 from Tucker’s company with the property as collateral.
Gottschalk said he found no evidence that any money was lent or paid back, but the mortgage created a public record that investors and potential buyers could review. The mortgage made it “look like the property was underwater,” Gottschalk said, by having more debt on the house than it was worth.
That mortgage is the basis of one of the criminal charges against Roberts and Adaramola. It was purportedly signed by Roberts’ uncle, Eddie George of Gary, Ind., who was listed as chairman of VLM in North Carolina corporation records. Adaramola notarized the mortgage, affirming that George signed it in her presence.
But George said in a complaint to the North Carolina Secretary of State that he was unfamiliar with Adaramola or VLM and that the mortgage and other deeds and documents purportedly signed by him and notarized by Adaramola in Buncombe “were executed without my knowledge or consent.”
A special prosecutor with the Secretary of State, the agency that investigates notary fraud and that brought the charges against Adaramola and Roberts in 2022, was appointed last week to handle the cases.
Sale never happened, commissioner now says
The proceeds of the court-ordered sale of Shroat’s house were to be divided between the 50/50 owners, Shroat and VLM, after costs, according to a court order.
A “final report” filed in court by Booth said the $145,000 paid by Asheville Home Funding went to Wells Fargo to pay off the mortgage and an equity line in Shroat’s and Trimnal’s names, and $7,250 went to Booth for a “commissioner’s fee.” There was no money left over.
But the complaint said the final report and other documents signed by Booth contained “numerous false statements” and that Asheville Home Funding never actually paid the $145,000 purchase price.
In a “corrected final report” Booth submitted in December 2022, four years after the purported sale and seven months after the complaint was filed, Booth said the information in the original report “is not correct to the best of my knowledge.”
He said in the corrected report that he “was not present at any real estate sale” of the property on Oct. 8, 2018, and had “no knowledge of” Asheville Home Funding paying $145,000 or the purported payoffs to Wells Fargo as part of that transaction. He said he did not receive a commissioner’s fee.
The original report, Booth wrote, was prepared by Adaramola, “and I followed her direction regarding its contents and its filing.”
In a response to the complaint, Booth said “he signed documents prepared by Defendant Adaramola that he now understands contained incorrect information.”
One of those was a “commissioner’s deed” on Nov. 30, 2018, that said Booth held a sale on Oct. 8, 2018, and that the high bidder, Asheville Home Funding, had paid $145,000. The deed gave Asheville Home Funding 100 percent ownership of the property.
A week later, the company sold it for $210,000.
After paying the Wells Fargo mortgages and other costs, the closing statement showed Asheville Home Funding received $40,118. Booth received $6,300, Adaramola $2,500, and Trimnal $3,500.
Shroat came away with nothing.
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. Email skestin@avlwatchdog.org.
Asheville Watchdog gratefully acknowledges the assistance of the Duke University School of Law’s First Amendment Clinic.
I continue to appreciate the reporting related to the “Equity Erased” series. Evidently, a monetary settlement can remove the darkest stain.
The use of a “petition to partition” seems to have been the tool of choice for these nefarious doings. I’m wondering if there have been (or might be) any changes in North Carolina law to address them?
When a party to a lawsuit cannot be found, the appointed guardian ad litem represents their interests and must use all reasonable means to locate them. That guardian should file an affidavit, served on the other parties, detailing the steps taken to find the missing person. If the guardian is not truthful in the affidavit, or has not made a reasonable effort, that is not the judge’s fault. The judge is not required to hire Magnum, P.I., to track someone down, and dishonesty or lack of effort are not peculiar to petitions to partition. However, if there is no affidavit in the court file, or if the affidavit is not specific and the judge holds no inquiry, then you might lay the blame on the person with the black robe.
So the three white guys weren’t charged with any criminal wrong doing? Hmm
This case is indicative of the poor state of education and general standard of living in NC. This type of situation is destined to be repeated as long as average people have no advocate to speak for them in complex transactions. Where are the agencies that could provide legal counsel? Where are the pro bono attorneys and what if anything are they doing to assist folks like these victims? It’s an on-going case of the educated taking advantage of the uneducated, the affluent taking advantage of the poor and those who are part of the legal system compromising it for profit at the expense of others.
Just an annoying occasional cost of doin bidness in the world of Lisa Roberts. In the long term she wins big.
Thank you for covering this. Fraud is usually committed quietly, with little public notice.
It is such a shame that the thieves paid so little penalty for this rare incidence of actually being caught. No disbarment, no admission of guilt, no prison and $116,000 divided seven ways (less than $17,000 a piece) is a trivial cost of doing business.
Yes!
Thank you!