NC man accused of bilking investors out of $1 million in Scotland County scam

By Sarah Nagem

A North Carolina man is accused of swindling more than $1 million from investors in a real estate scheme in Scotland County. 

Marshall Melton, a Greensboro insurance agent, told seven investors he would use their money to buy and renovate run-down properties in downtown Laurinburg to lease or resell, according to a civil lawsuit filed May 30 by the U.S. Securities and Exchange Commission. 

But Melton spent most of the funds on personal expenses including groceries, restaurants, credit card bills and services at an “anti-aging wellness clinic,” according to the lawsuit, which was filed in federal court in the state’s Middle District. 

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Melton and his company, Integrated Consulting & Management, fraudulently took money from the investors between 2016 and 2021 and spent about $340,000 to buy seven properties – two office buildings, three retail buildings, one restaurant building and a parking lot, the lawsuit says. 

But Melton did little or no work to renovate the properties, according to the lawsuit. 

Laurinburg, home to about 15,000 people in southeastern North Carolina, has put much focus on revitalizing its downtown. The city was designated a North Carolina Main Street Community in 2019 by the state Department of Commerce. 

Mayor Jim Willis said Melton’s failure to follow through on renovating the properties slowed progress downtown. “We’re finally starting to claw back,” he said. 

Melton’s company bought the former Market Furniture/McDougald building on Main Street and planned to turn it into “high-end apartments with a pub style restaurant downstairs,” The Laurinburg Exchange reported in 2017. 

Crews gutted the century-old building, which then collapsed during Hurricane Florence in 2018. 

Melton’s company also bought the former State Bank building on Main Street and an adjacent building that was owned by Willis and his wife, who had opened a deli there. Willis said Melton had promised to turn the bank space into a boutique hotel with an adjoining restaurant. 

Renovations had begun at the building but stopped, Willis said. 

“When (the workers) left, they just left windows open,” he said. “Pigeons were roosting in there.” 

The Border Belt Independent sent a message on Sunday to a Facebook account matching Melton’s name but did not receive a response. A lawyer for Melton was not listed in court documents. 

Melton has a history of fraud complaints, according to the lawsuit. He was accused in 1997 of misusing clients’ funds and pleaded guilty to state criminal charges related to state securities fraud, the lawsuit says. He served one year of a five-year sentence of supervised probation. 

In 2003, the Securities and Exchange Commission barred Melton “from association with various members of the securities industry,” the lawsuit says. 

The investors, who had an average age of 75, included a retired teacher and two retired physicians, one of whom had a wife who was diagnosed with Alzheimer’s disease. 

The lawsuit does not say whether the investors in the Laurinburg projects were local. It says Melton knew one of the investors, a retired teacher and her husband, from church where Melton volunteered as a counselor for “community members experiencing life difficulties.” 

The retired teacher had previously lost $60,000 she had given Melton for another project, according to the lawsuit, and gave him $100,000 for the Laurinburg properties. 

Melton met another investor, a software engineer, at a gym, the lawsuit says. 

In 2021, Melton transferred ownership of five of the downtown properties to two investors who had complained, the lawsuit says.

To complete the deal, Melton fraudulently convinced two other investors to give up their interests in the properties, according to the lawsuit. Melton allegedly told one he investor he would “get her something better” and informed another that he could only sell the property if the investor “exchanged his interests for a promissory note that Melton would then repay.” 

“Because Melton knew he was transferring the properties simply to mollify two other complaining investors, and would not receive anything other than a release in return, Melton knew that he would not get something better for one investor or repay the promissory note given to the other investor,” the lawsuit says. 

Willis said he’s still hopeful a developer will open a boutique hotel downtown. 

“It took me the longest time to figure it out,” he said of the alleged scheme. “I should have known something was up.” 

Marshall Melton’s company, Integrated Consulting & Management, bought seven properties in downtown Laurinburg, including the former State Bank building, according to a civil lawsuit filed May 30, 2023, in federal court.
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