Bank Of America Suit Alleges $13 Million Fraud

5:39 PM, Dec 6, 2006   |    comments
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Charlotte, NC -- Bank of America Corp. has filed a lawsuit alleging fraud in an eastern North Carolina land deal involving a former employee. The Charlotte-based bank filed a lawsuit in Mecklenburg County Superior Court in October accuses Loren Hamlin and two other men of defrauding the bank of $13 million. The bank says it is owed that money and is also asking for punitive damages. According to the bank's suit, Hamlin, a former vice president in the Kitty Hawk branch, developer Michael Lam and another man, Rex Tillett, used the money from the bank and other investors to buy land along the North Carolina coast. Tillett's attorney, Denise Walker, said her client has filed a counterclaim against the bank alleging deceptive trade practices. She said the bank's lawsuit "fails to allege any facts supporting the claims against him." According to the lawsuit, Lam, with help from Hamlin and Tillett, solicited investors in February to put in the bank to help obtain a loan to buy 600 acres in Perquimans County. The suit says the defendants diverted the money to buy the property and no loan was approved. In May, Blue Water Land Development Co., managed by Lam, bought the property for about $13 million, according to the lawsuit. Three months later, the firm contracted to resell the land to an investment firm for $32 million, the suit said. The lawsuit also names businessmen John "Skip" Dixon and Glenn Futrell as defendants. Futrell deposited about $7 million in the bank, while Dixon put in about $3.5 million, according to the lawsuit. In return, they were to receive fees from Blue Water, the lawsuit says. In a counterclaim filed in Mecklenburg County Superior Court last month, Dixon and Futrell accuse Hamlin, Lam and Bank of America of fraudulently using their money to buy property. They have asked for more than $10 million in compensatory damages, plus punitive damages. "Their money is gone," said their attorney, Brad Herring. In its suit, Bank of America contends it's not obligated to pay Dixon and Futrell, arguing that Hamlin, the former bank vice president, acted outside the scope of his duties. The suit says Hamlin was fired and his whereabouts were unknown. Ken Lucas, spokesman for the FBI in Charlotte, said that the agency is investigating possible financial fraud but declined additional comment. Bank of America spokeswoman Shirley Norton said the bank filed the suit so it could obtain proceeds from the sale of the property and "to have the court determine the rights and liabilities of all involved."

Associated Press

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