BEFORE THE RVARY HEARING COMMISSION OF THE WAKE COUNTY THE NORTH CAROLINA STATE Plaintiff COMPLAINT. RANDY A. CARPENTER, Attomey, Defendant Plaintiff, complaining of the Defendant, alleges and says: 1. Plaintiff; the North Carolina State Bar (“State Bae”), isa body duly ‘organized under the Invs of North Carolina and isthe proper party to bring this proceeding under the authority granted it in Chapter 84 ofthe General Statutes of North Carolina, and the Rules and Regulations of the North Caroling State Bar (Chapter | of Title 27 of the North Carolina Administrative Code). 2. Defendant, Randy A. Carpenter (“Carpenter”), was admitted to the North Carolina State Bar in 1997, and is, and was a all times refered to herein, an atomey at Jaw licensed to practice in North Carolina, subject tothe laws of the State of North Caroling, the Rules and Regulations ofthe North Carolina State Bar and the Revised Rules of Professional Conduct. ‘Upon information and belief: 3. During all or part ofthe relevant periods referred to herein, Carpenter was ‘engaged in the practice of In in the State of North Carolina and maintained a law office in Spruce Pine, Mitchell County, North Carolina and/or Newland, Avery County, North Carolina 4. During all ofthe relevant periods referred to herein Carpenter was also a licensed surveyor and engineerin North Carolin. Beginning in about October 2001 Porter”) began realestate development act project knovn asthe Village of Penland, wnthony Porter (hereinafter “A. jes in Mitchell County, North Carolina on a 6. The Village of Penland projeet encompassed va ‘acquired by the developers in Mitchel! County, North Carolina, including subdivisions such as River Pointe, Penland Reserve, Penland Heights, Falling Waters, Diamond Lake, Crystal Lake, Penland Village, and Winery Heights. The project was also at timesreferred 10 as Communities of Penland. The phrase “Village of Penland” wil be used in this complaint to refer to all development of land in Mitchell County, North Carolina by the developers identified below between about October 2001 and December 2007, 7. __A. Porter was the developer forthe Village of Penland projec, along with Frank (“Skip”) Amelung and Richard Amelung, who will be referred to jointly ‘throughout this complaint as “the developers”. 8. The developers operated by and through various entities, including but not limited to Peerless Property Management, In.; Peerless Real Estate Services, Ine Village of Penland, LLC; Communities of Penland, LLC; Penland Investment Group, LLC; Bailey's Peak Investment Group, LLC; SDT, LLC: COP Land Holdings, LLC; and MFSL Land Holdings, LLC. The developers also called themselves “Te Peerless Development Group” and “The Peerless Group.” The term “developers” inthis complaint will encompass any such entities and trade names by and Uurough which the developers operated 9. Carpenter, who had performed surveying, engineering, and/or legal services for A. Porter on a previous project known as Bear Ridge in early 2001, began performing surveying, engineering and/or leal services on the Village of Penland project inabout October 2001 10. Carpenter performed the surveying for the Village of Penland project from ‘about 2001 througls 2007 11. Caepenter certified and filed the plats with the Mitchell County Register of Deeds for the Village of Penland in which he defined the lots that would comprise the Village of Penland and its various subdivisions. 12. Carpenter certified and filed plats forthe Vilage of Penland preceding the sole of the lots and throughout the time during which lots were being sold. 13. Between about 2002 through 2007, the developers communicated with potential purchasers of lots in the Village of Penland, including through certain marketing ‘materials. The Village of Penland was marketed as an area suitable for residences. Marketing materials stated that development of subdivisions for retrementsecond homes, ‘was part of the on-going project to develop The Village of Pesland. The developers’ marketing included communications to potential buyers of intended amenities and nearby attractions geared toward residenta| living, including but not limited to a four-acre lake, shopping, a village market, fine dining, an equestrian center, tennis courts, rafting, trout fishing, movie theater, golf course, and proximity tothe Penland School of Cras, 14, Carpenter was aware thatthe developers were marketing Village of | Penland lots as suitable for residences between about 2002 and 2007. 15, Carpenter was aware that the developers were making statements to potential buyers regarding construction of amenities forthe Village of Penland between bout 2002 and 2007.16. Carpenter was aware that despite such representations between 2002 and 2007, the marketed amenities were not being constructed andthe adverse lake had to be drained due to failure to comply with applicable regulations 17. Carpenter met with potential buyers and made representations to them, ‘conceming amenities and improvemens that would be done by the developers. ‘Carpenter made such representations to potential buyers despite his knowledge that the ‘developers had not and were not making these improvements despite past promises to do 18, Carpenter Jed potential buyers o believe the lots i the development were suitable for residences, despite his knowledge that certain lots did not have communal sewer and were not suitable fora septic system at the time ofthe closings 19. Carpenter sent letters to certain lenders stating that he had examined the {ots being purchased and that were being used as security forthe loan and thatthe property was suitable for an in-ground septic absorption system for a specified type of residence (e.g a three-bedroom home) (hereinafter referred to asthe “septic lett"). 20. ‘These septic letters contained misrepresentations because Carpenter had not inspected the lots at issue and evalusted the factors relevant under applicable regulations forthe specific lotsa issue and/or te lots were not suitable at that time for an in-ground septie absorption system, 21. Carpenter knew the septic letters he was executing and providing to lenders were false. 22, Carpenter did not notify the lenders ofthe false nature ofthe septic letters 23. Carpenter was the closing attomey for most of the real estate transactions for the Village of Penland, closing several hundreds of lot purchase transactions. 24, Asclosing atiomey, Carpenter represented the buyerfborrower and the lender, 25, Carpenter closed these transactions involving Village of Penland lots despite his knowledge thatthe buyers and/or lenders had false information regarding the suabilty of the lots for residences atthe time ofthe closings 26. Carpenter closed transactions involving Village of Penland lots despite his ‘knowledge thatthe buyers had false information regarding the status of construction of amenities marketed to benefit the lts at issue, 27. The lenders designated the amount of the loan and the amount of money 10 bbe provided by the buyer/borrover, 28, _HUD-1 Settlement Statements were prepared by Carpenter or a non- attorney under Carpenter's supervision for each transaction that stated the amount of the Joan and the amount due from the buyeriborrower as designated by the lender.