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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.
Trustee appointed in Moncure case
A Richmond bankruptcy attorney has been appointed as trustee in the case of a Fredericksburg-area real estate investor under investigation for fraud.
As trustee in the Chapter 7 bankruptcy case of 41-year-old James Ashby Moncure, Lynn L. Tavenner of the Tavenner & Beran PLC law firm will be tasked with identifying, securing and potentially selling assets, and distributing any proceeds to creditors.
Tavenner will oversee a meeting of Moncure creditors scheduled for 10 a.m. May 16 in Suite 4300 of Richmond’s federal courthouse at 701 E. Broad St.
That 341 meeting will give Tavenner and creditors an opportunity to ask Moncure questions about his financial affairs and the information in his bankruptcy papers. Any creditor or other member of the public is allowed to attend.
An involuntary Chapter 7 case was filed against Moncure on Monday by five members of the Higginbotham family, three of whom live in Spotsylvania County. Moncure on Thursday consented to the bankruptcy process rather than contesting it, thereby officially putting himself in bankruptcy protection.
Moncure is represented in the bankruptcy case by Robert M. Marino of the Redmon, Peyton & Braswell LLP law firm in Alexandria.
Moncure is required to file a list of the names and addresses of all creditors within seven days, and within 14 days must file schedules of assets and liabilities and a statement of financial affairs. People owed money by Moncure must file a claim in the bankruptcy case within 90 days. A notice will be sent to all creditors asking them to file claims.
Moncure is being investigated on claims that he borrowed money from people and did not use the funds for the stated purpose of making real estate investments in the Fredericksburg area. On March 4, he sent a long email to noteholders indicating that he would not be able to repay the promissory notes.
Since the email went out, Fredericksburg police and the FBI have been jointly investigating the case under code sections involving obtaining money by false pretense and securities fraud. Detectives have now identified about 45 people whose total losses exceeded $15 million, according to Fredericksburg police.
Though no charges have been filed, police say there could ultimately be a separate charge for each victim. Police say they know Moncure’s current whereabouts.
Since the investigation began, police have obtained warrants to search Moncure’s residence at 1200 William St. in Fredericksburg as well as nine banks for financial records.
Moncure withdrew “large amounts of cash” from several banks the day before the email went out, according to a search warrant affidavit filed in Fredericksburg Circuit Court, and also wired about $1.286 million from one account to several others this past January.
Several investors were told that the money would be used for land investment near the Quantico Corporate Center development in North Stafford.
In addition to being a QCC partner with his two brothers, Moncure owns all or parts of at least 17 properties, most of which are in the Fredericksburg area. The properties are owned by Moncure himself or through limited liability companies including Saranna, Quantico Business Center, Quantico Business Center II, Moncure Brothers and Minor Moncure.
The Higginbotham family, Union First Market Bank and a division of the Silver Cos. have already filed formal claims against Moncure for money he borrowed and hasn’t repaid.
Another attorney for Moncure, Steven T. Webster of Alexandria, said in an email this month that he has been asked to make “appropriate arrangements” to repay Moncure’s lenders. He asked the community to withhold judgment until all the facts are known.
It is unclear how the borrowed money was used. In his March 4 email, Moncure referenced that he used an Ameritrade account and became overextended. The email also noted the risks of leverage and the options market.
Depending on the outcome of the case, there is a chance that Moncure noteholders could take advantage of a provision in the U.S. tax code that allows victims of fraudulent investments to take an ordinary deduction in the amount of the theft loss during the year in which the scheme was discovered—2014 in this matter.