North Carolina Contractor ‘Like Family’ Turns Out to Be Fraudster, Court Awards $1.17 Million in Damages

RALEIGH, NORTH CAROLINA — What began as a trusting business relationship between a family and their friendly contractor ended in financial ruin and a court-ordered $1.17 million judgment after what a federal judge called one of the most “egregious cases of fraud and deceit” he had ever seen.

In a ruling by the U.S. Bankruptcy Court for the Eastern District of North Carolina, Judge David M. Warren found that contractor Dwight Elam defrauded Maria Brown-Lindsey and her brother, manipulating their trust and driving their company, B & M Realty, LLC, into bankruptcy. The court determined Elam had operated through a web of sham entities and false promises, all while pretending to be a licensed contractor.

A Family’s Trust Turned Into a Trap

The case began in 2013, when Brown-Lindsey and her brother inherited multiple rental properties from their late father. Hoping to increase their value through renovations, they met Elam — introduced by a tenant — who presented himself as a legitimate general contractor operating under his company, United Properties.

In reality, Elam was not licensed and had never been registered as a general contractor in North Carolina. His companies, including United Properties Plus, LLC and United Properties PL, LLC, were merely names on paper — with one already dissolved before he even met the family.

Despite this, Elam won the siblings’ trust, growing close to them on both a personal and professional level. Judge Warren wrote that the relationship had become “like family,” but that this closeness made Elam’s actions “even more abominable.”

“He was a deceitful and skillful scam artist,” the judge said, noting that Elam “played into the Lindseys’ emotions to extract thousands of dollars.”

False Promises, Fake Companies, and Stolen Funds

Elam’s deceit extended far beyond unlicensed contracting. Posing as an advisor, he convinced the family to form B & M Realty, LLC to manage their inherited properties. He also encouraged them to take out additional loans, promising that the borrowed money would fund major renovations.

Between October 2018 and December 2019, the family paid Elam roughly $140,000 directly and another $183,280 through loans he helped secure — loans backed by the properties themselves. But instead of completing the promised work, Elam diverted the money for his own use. The properties remained largely untouched while the family’s debt ballooned.

The mounting losses forced B & M Realty into Chapter 11 bankruptcy, where they later filed a lawsuit against Elam and his companies. The failed renovation scheme ultimately cost the family nearly all of their inherited properties, which were sold or surrendered to creditors.

Judge Pierces Corporate Veil, Holds Fraudster Personally Liable

In a decisive ruling, Judge Warren determined that Elam’s companies were simply extensions of himself — “fictitious fronting” designed to shield him from accountability. Using North Carolina’s instrumentality rule, the court pierced the corporate veil, holding Elam personally liable for the damages.

The court found clear violations of the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), tripling the damages to reflect the seriousness of the fraud.

In total, Elam was ordered to pay $1,173,710.53, including $1.13 million in trebled damages and $40,060 in attorney’s fees.

A Warning to Property Owners and Small Businesses

The ruling serves as a cautionary tale for homeowners and business owners across North Carolina. Legal experts say the case highlights how easily trust can be exploited — and how critical it is to verify contractor credentials.

The court and bankruptcy attorneys offered several lessons for avoiding similar scams:

• Verify contractor licenses. North Carolina provides a public online database where contractor credentials can be checked in minutes.
• Beware of unqualified advisors. Contractors are not attorneys; they should not provide legal or business formation advice.
• Question suspicious business structures. Multiple similar company names or dissolved entities are red flags for fraud.
• Keep detailed records. Contracts, payment schedules, and progress photos protect owners from financial abuse.
• Maintain boundaries. Personal closeness with a contractor should never replace professional oversight.

A Costly Lesson in ‘Trust but Verify’

Judge Warren’s ruling may offer some measure of justice, but it also underscores the limits of recovery when fraudsters spend or conceal stolen money.

“This case is a sobering reminder that trust without verification can be devastating,” the court noted. “Even when a court pierces the veil and awards damages, the financial loss may never be fully recouped.”

As President Reagan once said — and as this North Carolina case painfully proves — in business, it’s best to trust but verify.

To learn more about consumer protection and contractor licensing in North Carolina, visit SaludaStandard-Sentinel.com.