LUMBERTON — A former attorney for Robeson County has been disbarred after pleading guilty to bank fraud in June.
Joseph Hal Kinlaw served as county attorney for 23 years. He resigned in 2013 after it became public that he was being sued for more than $18 million in unpaid loans.
Kinlaw pleaded guilty to bank fraud on June 1. At sentencing, which has not yet been scheduled for court, he faces up to 30 years in prison and five years of supervised release, as well as a fine of $1 million and restitution payments.
According to the U.S. Attorney for the Eastern District of North Carolina, Kinlaw set up real estate investment and development entities on behalf of investors and used those entities to obtain loans from BB&T and First Citizens Bank.
“BB&T and First Citizens Bank extended loans to these entities under the auspices that the entities would be engaged in the development of residential real estate in various subdivisions in the area of Camp Lejeune in Onslow County,” the statement says.
Kinlaw then falsified descriptions and releases of the loan collateral, the U.S. Attorney’s Office said in a statement announcing his plea.
“Kinlaw was able to use the collateral for other real estate investment activities and loans. By fraudulently releasing the banks’ collateral before the banks’ loans had been satisfied, Kinlaw was able, in several instances, to convey the collateral to third parties for value and continue the scheme,” the statement said.
Kinlaw used unrelated funds to make the loan payments, the statement said, in some cases using proceeds from one loan to pay off another. The banks stopped loaning money to Kinlaw and the loans went into default. Because Kinlaw used falsified collateral information, the banks were not able to recapture their losses through foreclosure.
Kinlaw surrendered his attorney’s license to the North Carolina State Bar on July 12, and on July 22 he was disbarred.
Sarah Willets can be reached at 910-816-1974 or on Twitter @Sarah_Willets.