Article Overview
The former operator of one of the largest franchises of HomeVestors of America is set to plead guilty to federal wire fraud related to a Ponzi scheme that deceived investors interested in his real estate business. Federal authorities in Texas revealed that Charles Carrier defrauded approximately 80 individuals, resulting in losses of nearly $40 million since 2018. Although Carrier is set to plead guilty to one count of felony wire fraud involving a $200,000 transaction, he has acknowledged his involvement in the larger scheme and has agreed to make restitution. The court has yet to determine the exact restitution amount.
Legal and Franchise Consequences
The charge against Carrier carries the potential for a maximum 20-year prison sentence and substantial fines. A federal judge will be responsible for issuing the sentence. Carrier previously owned C&C Residential Properties, a successful franchise in the HomeVestors network known for its "We Buy Ugly Houses" slogan. In October 2024, HomeVestors terminated Carrier’s franchise upon receiving information about his fraudulent activities. The company has also filed a lawsuit against him for trademark infringement, though Carrier has yet to respond.
Background and Details of the Scheme
ProPublica previously reported on Carrier’s fraudulent activities, which involved swindling millions from numerous investors throughout Texas. These investors included both affluent businesspeople and older individuals who relied on the returns from their investments to meet daily expenses. Court documents show individual losses ranging from $35,000 to $11.6 million. The plea agreement was submitted in court shortly after ProPublica’s report.
Carrier borrowed funds from investors to support his house-flipping ventures, initially using the money to purchase and renovate older properties for profit. He assured investors that each loan was secured by a stake in a property and promised monthly interest payments of 8%-10%.
Financial Mismanagement and Fraudulent Practices
For many years, investors received their payments consistently. However, in 2018, Carrier began taking out multiple loans on single properties, issuing deeds that were never recorded, and accumulating debt exceeding the properties’ actual value. Court documents revealed that Carrier forged signatures and notary stamps to sell properties without informing the investors or paying off their notes. He admitted to using investor funds for personal expenses and to fulfill obligations to previous investors.
Reactions and Statements
The limitation of Carrier’s plea deal to a single charge has angered some victims. Ron Carver, an investor who incurred a $300,000 loss, criticized the agreement. The U.S. attorney’s office declined to comment on the ongoing case. Carrier’s attorney, Tom Pappas, stated that Carrier did not intend to defraud investors and attributed the business’s failure to changes in the real estate market.
Pappas emphasized Carrier’s commitment to repaying investors, indicating that restitution might be significantly less than the $40 million loss identified by prosecutors, as legal debates continue over the valuation of these losses. In February, Carrier agreed to an asset liquidation plan to allow prosecutors to manage the sale of his properties, with proceeds directed toward restitution.
Anticipated Outcomes
Carrier is expected to serve prison time. Pappas noted that depending on the calculated losses, imprisonment is a strong possibility, but efforts to compensate investors continue.
