Raleigh Attorney Pleads Guilty To Federal Fraud Charges

GREENSBORO, N.C. – Raleigh attorney Joseph Lee Levinson pleaded guilty to conspiracy to make false statements to federally insured financial institutions, announced Ripley Rand, United States Attorney for the Middle District of North Carolina. He will be sentenced by United States District Judge James A. Beaty, Jr., in Winston-Salem on May 19, 2016. 

Joseph Lee Levinson pleaded guilty to one count of conspiracy to make false statements to federally insured financial institutions in violation of Section 1014 of Title 18 of the United States Code. This charge carries a maximum sentence of five years in prison and a $250,000 fine. Levinson remains out of custody on pretrial release pending sentencing.

From 2005 until 2010, Jotham Walker Pruitt and other individuals operated a marijuana “grow” operation in Orange County, North Carolina. The operation involved the production of marijuana inside houses in the vicinity of the Town of Hillsborough, Orange County, North Carolina. Levinson is a licensed attorney practicing in Raleigh and is a college friend of Jotham Pruitt. Levinson conspired with Jotham Pruitt to obtain mortgage funding for properties to be used as “grow houses,” knowing full well that banks would not loan money to Jotham Pruitt if they knew that the houses were to be used for illegal purposes. Levinson and Jotham Pruitt prepared loan applications to Long Beach Mortgage Corporation and SunTrust Bank falsely representing that the properties would be used for legal purposes, such as a residence or as rental property, when in fact both knew that the houses would be used to grow marijuana. Levinson acted as closing attorney for purchase of the first two grow houses used in the operation. 

Levinson also conspired with Jotham Pruitt to present false leases to Countrywide Bank, N.A., to support Pruitt’s application for mortgage funding to purchase a third grow house. Levinson provided Jotham Pruitt with a sample lease to use as a template in creating false leases to present to Countrywide Bank, N.A., showing that previous properties purchased by Jotham Pruitt were rental properties occupied by tenants. In fact, these properties were being used to grow marijuana.  

The grow operation ceased in December 2010. Upon completion of the business, Jotham Pruitt ceased making payments on the mortgages on the grow houses, including those he had purchased with the aid of Levinson. The houses were foreclosed on by the lending banks at a total loss of over $250,000. 

Jotham Pruitt has pleaded guilty in the United States District Court for the Middle District of North Carolina to related charges. Charges remain pending against other individuals indicted in connection with the scheme.

The case was investigated by the Orange County Sheriff’s Office and Internal Revenue Service - Criminal Investigations in conjunction with the United States Attorney’s Office for the Middle District of North Carolina.

Case Number 1:15CR413-1

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