A former Charlotte real estate broker says that several years of litigation have taken a toll on him, causing him to have two strokes and lose the sight in one eye. Tony Brown Jr., the former owner of Realty World Genesis in Charlotte, in August surrendered his license to the N.C. Real Estate Commission in exchange for a dismissal of misconduct charges against him. The surrender was announced this week.
His legal trouble culminated last year in a U.S. Bankruptcy Court judge’s ruling ordering Brown liable for $667,350 in damages to each of three California firefighters who contended that Brown defrauded them.
In a telephone interview, Brown said he has no plans to reapply for his license after the three-year suspension ends.
“I’ve had a fantastic career in real estate. But I’m done,” he said. Brown, 48, also said he has not paid the firefighters their settlements and has no plans to appeal Judge J. Craig Whitley’s ruling. The time frame for appealing has passed, he said, adding that he also lacks funds.
Brown did not admit to or deny the allegations of misconduct in a signed consent to voluntarily surrender his license to the commission.
“I had the opportunity to have a hearing at the Real Estate Commission,” he said. “I opted not to. I just wanted to put it behind me.”
The firefighters filed a claim against Brown in Bankruptcy Court in April 2012, contending that he had falsely represented a real estate investment plan to develop a 13-lot subdivision on Albemarle Road. One of the firefighters said he had received an email in 2008 from Brown, asking if he wanted to help develop a residential subdivision in Mecklenburg County. Brown sought “about $500,000 for 12 to 18 months,” the emails said.
Brown offered to collateralize the loans by using the mortgage on his office building in Mint Hill and providing monthly interest on the loans, according to court documents. He told the investors the existing mortgage on the office building was $135,000, and that the building was valued at between $775,000 and $800,000.
According to the judge’s order, “the office building was actually encumbered by at least three prior deeds and the cumulative balance owed on the mortgage greatly exceeded $135,000. It also had a fair market value of far less than Brown represented.”
In the email, Brown wrote that the 3.8-acre investment property would have homes selling for about $150,000 to $170,000 and lots for about $35,000. He believed that the property could generate an income of $750,000 and a profit of $260,000 for the investment.
Having done business with Brown before, the three firefighters each loaned $150,000 to Brown. For five months Brown made interest payments to the three men, but then the payments slowed, according to court documents. Brown cited increased expenses for improvements to the property.
In May 2010, the investors flew to Charlotte to inspect the land.
“It was immediately obvious that little, if any, work had ever been done in terms of improvements Brown stated had been made,” the court documents said.
Brown said he spent 26 years of his life in real estate and received numerous awards for his work.
“I took my career very seriously,” he said. Things just got out of hand, he said.
“There was no intention ever of harming anybody,” he asserts. “It was just the way the economy affected us.”
In August 2011, Brown filed for Chapter 7 bankruptcy, according to public records, claiming nearly $1.4 million in liabilities.
In his October 2013 ruling, Judge Whitley granted the firefighters’ claim – under the N.C. Unfair and Deceptive Trade Practices Act – that objected to the discharging of Brown’s financial obligation to them. The judge found that each plaintiff suffered damages in the amount of $150,000, plus unpaid interest of $72,450. In accordance with N.C. general statutes, the judge tripled the plaintiffs’ damages due from Brown.
As for his future, Brown says he is taking a little time off to recoup from the pressures of the last five years.
“Stress is a killer,” he said.
Brown says he has no plans to pursue a second career in real estate.