Pinetown: An investment deal gone wrong - WECT TV6-WECT.com:News, weather & sports Wilmington, NC

Pinetown: An investment deal gone wrong

Reported by Casey Roman - bio|blog|email
Posted by Debra Worley - email

WILMINGTON, NC (WECT) - Investing your money can sometimes be a game, and if you're playing for high returns, you're often playing with high risks.

Jim Springer has worked hard his whole life.  When he made a little extra money he found Wilmington Financial Advisor Ken Waters to set up a local investment deal.

Waters was well known in the Wilmington area from his local radio show "Financial Freedom" on the Big Talker FM. He was involved in numerous community events and was friends with most of his advisees.

He offered Springer, and about 20 other investors, a deal they couldn't refuse.  He called it "Pinetown."  He said the company was investing in a 45-acre plot of land in Beaufort County, owned by a group of people that needed money to have it timbered.

Pinetown is a limited liability company that was formed in 1997 for the purpose of investing in real estate and securities according to documentation from the NC Secretary of State.

In 2001, The Secretary of State notified Pinetown of its failure to file annual reports for 1999 and 2000. In June of 2003, after numerous delinquent annual reports, the Secretary of State dissolved the company. It was reinstated in June 2005.

Waters promised a 20% return for $150,000 investment from Springer.  He promised if the owners couldn't pay, Springer and the other investors would have rights to the property.  It sounded like a win-win situation so Springer handed over a check.

Springer soon began to feel like the deal was too good to be true, but he was already in the game without putting anything down on paper.  Springer tried to get out of the deal.  He repeatedly called and wrote Waters, demanding "since you cannot provide this paperwork for me I must cash out, please take me out of Pinetown."

So, Waters wired Springer's investment, plus interest, to Puerto Rico where he was on vacation.  "When I saw the money in the account, there was a great relief," said Springer.  He took his money and bought his dream home.

"It felt like I had actually beat Ken at his own game," said Springer.  "Little did I know Ken was still playing."

The money transferred to Springer was actually a loan against his own brokerage account.  According to paperwork from Multi-Financial, a company Waters represented at one time, Springer signed for the loan, even though he was in Puerto Rico.

With a closer look of the document, you can see that it is, in fact, Springer's signature, but the handwriting on the rest of the form isn't his.  Now, he wants to know who forged the paperwork.

"It's a good question how this paperwork is here, how this documentation is in place," said Springer.  "I would very much like to ask Ken Waters these questions."

But, Waters will never be ever to answer those questions because he got out of the game before he need to pay his players by taking his own life. 

According to authorities, Waters drove to an Atlantic Beach Condo July 17, two weeks before the Pinetown payout date.  Waters placed a charcoal grill in a tent inside the garage of the condo and committed suicide from carbon monoxide poisoning.

Authorities found the book "Suicide" by Geo Stone near the tent which outlined the methodology of Waters' death. They also found a receipt in the book that shows he purchased it in February.

He left a note that mentioned his money troubles, but whatever Pinetown was and whatever it was worth - he took to the grave.

Martin Ramey, who represents five of more than 20 other investors, said there's nothing for the investors to go after besides the estate. 

In a letter, Waters' lawyer said she hasn't found any Pinetown documentation or real estate.  As of July 31, which was the pay date for investors, there was only about $34,000 left between the three bank accounts tied to the company's three different names.

The letter read:

We have been unable to locate documents evidencing the formation of Pinetown LLC or Pinetown Investments LLC. We have been unable to locate any real estate owned by Pinetown...We have located a bank account in the name of Pinetown Investments LLC. The balance as of July 31, 2009 is $538.42...There are two bank accounts in the name of Pinetown Investment Group LLC with balances of $30,447.35 and $3,083.65 as of July 31, 2009.

His lawyer also said there isn't enough money left to pay the investors - so it seems as if the game is over.

"His clients don't win, they've lost considerable sums of money - but more so, the clients have lost trust," said Ramey.

Many of the people who invested in Pinetown had known and worked with Waters for years. They were friends with his family and knew him on a personal level.

The land associated with Pinetown, was owned by Waters at one time. However, that parcel of land was sold to 3-B Farms, Inc. for about $65,000 last spring.

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