Moncure consents to bankruptcy case
By BILL FREEHLING
A local real estate investor under investigation for fraud has officially entered Chapter 7 bankruptcy protection.
James Ashby Moncure on Thursday consented to the bankruptcy process rather than contesting it. The 41-year-old Stafford County native is represented in the bankruptcy case by Robert M. Marino of the Redmon, Peyton & Braswell LLP law firm in Alexandria.
An involuntary Chapter 7 case was filed against Moncure Monday by five members of the Higginbotham family, three of whom live in Spotsylvania County. They are represented by Reston-based attorney Donald F. King of the Odin, Feldman & Pittleman firm.
A trustee will now be appointed by a federal bankruptcy court judge in Richmond. The trustee will identify, secure and potentially sell assets, and distribute any proceeds to creditors.
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 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.
Brent and Doris Higginbotham of Spotsylvania and their three children claim in the bankruptcy filing that Moncure owes them $2.66 million from six separate promissory notes made between 2010 and 2013.
Moncure is required to file a list of the names and addresses of all creditors within seven days, King said, and within 14 days must file schedules of assets and liabilities and a statement of financial affairs. He can request an extension.
King said people owed money by Moncure must file a claim in the bankruptcy case within 90 days. He said a notice will be sent to all creditors asking them to file claims.
A meeting of creditors will be scheduled in about 30 days; Moncure will be required to attend and submit to an examination by the trustee and creditors.
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.
Police have learned that Moncure received a loan for $100,000 just 10 days prior to the email being sent.
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 16 different properties, most of which are in the area, according to a financing statement filed in Fredericksburg Circuit Court. The properties are owned by Moncure himself or through limited liability companies including Moncure Valley, Saranna, Quantico Business Center, Quantico Business Center II, Moncure Brothers and Minor Moncure.
Moncure and his brothers also own a property at 2698 Cedar Creek Road in the Arrington area, according to Nelson County land records.
Union First Market Bank and a division of the Silver Cos. are among those with claims against Moncure, according to court documents. Silver is developing the QCC, which is on land the Moncure brothers received from Stafford in a land swap finalized a decade ago.
Silver Capital, a division of the development firm, this past August lent Moncure $400,000 in the form of a promissory note, according to the financing statement. The loan was to be repaid with proceeds from sales of real estate Moncure owns.
Union First Market Bank made four separate promissory notes to Moncure and Saranna between July 2012 and October 2013 totaling roughly $1.94 million, according to a confession of judgment filed March 11 in Caroline County Circuit Court. The judgment requires Moncure to pay the bank 18 percent interest.
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 to noteholders, 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.
Bill Freehling: 540/374-5405