Updated May 31, 2024

Charles Carrier, who ran one of HomeVestors of America’s largest franchises, has agreed to plead guilty to federal wire fraud for allegedly orchestrating a Ponzi scheme that defrauded‍ investors of⁢ nearly $40 million.

according to federal prosecutors in Texas, ⁢Carrier defrauded 80 victims as 2018. While Carrier will ‍plead guilty to one count of felony wire fraud involving a⁤ $200,000 transfer, he has admitted to the larger scheme as part of the agreement. He ⁢also agreed to pay restitution, though the amount is yet to be determined.

The charge carries a maximum prison sentence of 20 years and potential millions of dollars in fines. A federal judge will determine the sentence.

Carrier’s company, Dallas-based C&C Residential Properties, was ⁣a top franchise‍ in‍ the HomeVestors chain, known for its “We Buy Ugly Houses” slogan. HomeVestors terminated Carrier’s franchise in October 2024 after receiving a tip about the fraud. The ‍company has since sued Carrier for trademark ⁢infringement. Carrier has not yet responded to the lawsuit.

A recent report detailed how Carrier allegedly bilked ⁤millions from investors‍ across Texas, including wealthy individuals and older⁢ adults relying on investment income. Court documents show ⁢individual losses ranging from $35,000 to $11.6 million. The plea agreement was filed two weeks after the report’s publication.

Carrier obtained loans from investors to fund ‍his house-flipping ⁤business, initially using the funds to buy and renovate houses for resale. He promised investors an ownership interest in a house securing each loan,with monthly interest payments of 8%-10%.

for years, investors received consistent payments. ⁢However,in 2018,Carrier allegedly began taking out multiple loans ⁤on single properties,sometimes providing investors ⁤with ⁣unrecorded deeds and accumulating debt exceeding the properties’ value,according to court documents. Carrier also admitted to⁣ forging signatures and notary stamps to sell properties without informing investors or paying off their notes. He used investor funds for personal credit ‍card balances, business expenses, and to pay earlier investors, court documents state.

Some victims expressed anger that Carrier’s plea deal involves only one charge.

“That’s ridiculous,” said Ron Carver,who lost $300,000,while his deceased father lost $200,000. “They will let him plead out and ⁣he might get a slap on the wrist.”

A spokesperson for ⁤the U.S. ‍attorney’s office declined to comment on the pending case.

Carrier’s lawyer, Tom pappas, said his client did not intend to defraud anyone.

Pappas said Carrier invested most of his money‍ into the business to ensure its success for ⁤investors. He ⁤added that changes⁣ in the real estate market‍ overwhelmed Carrier, causing the situation to spiral out of control. He denied Carrier funded a⁢ lavish lifestyle.

Even though Carrier agreed to plead to only one count, the judge will consider the full scope of the fraud during sentencing.

Pappas said ⁣Carrier is committed to repaying investors as much as possible. He anticipates the restitution will be lower than the $40 million identified by prosecutors, as lawyers negotiate the value of investor losses. In February, Carrier signed an asset liquidation agreement allowing prosecutors to oversee the sale of his remaining properties for restitution.

Pappas anticipates Carrier will serve prison⁢ time.

“Depending on the amount of ⁤the loss, ther’s a strong possibility he may go to jail,” he said. “but again, we are doing everything we can to make ‍everybody as whole as we⁢ can.”

What’s next

The court will‍ determine the amount of restitution Carrier must pay and his prison sentence.