Correction:In video posted on WCNC.com for this story we showed a photograph of a man named Bryan Drum. The Bryan Drum in the photograph is *not* the same Bryan Drum who worked as a bank manager for BB&T. We regret the error and apologize to Mr. Drum.
CHARLOTTE, N.C. -- A federal "whistleblower" lawsuit filed by the Cleveland County sheriff's deputy who tipped the FBI to one of the biggest land fraud deals in North Carolina history goes to a federal judge this week.
Amy Stroupe is suing BB&T, the bank where she once worked, saying she should get reinstated in her job plus back pay.
As part of her lawsuit, Amy claims a bank manager was involved in the scheme.
Amy first began investigating financial crimes as a deputy. She says she found it satisfying helping victims of fraud. So in 2005 she took a second job at the BB&T bank branch in Shelby, N.C.
On a day she'll never forget, a colleague called her into his office and told her he had information she needed to look into.
She recalls: "He told me, he said, 'Amy, this is going to be the biggest case you will ever work."
Related Stories: • •
Little did Amy Stroupe know then, she had stumbled into one of the biggest land fraud schemes in state history. Her colleague told her at the time that BB&T had loaned over $20 million to a land development deal near Spruce Pine called the Village of Penland.
It would prove to be an elaborate con by the developers, luring investors from around the country with the promise of big profits without having to put their own money down. Instead, investors borrowed that money from lenders like BB&T -- supplemented by second mortgages for the remainder of the investment.
Amy says she saw one red flag after another. She says, "These were unusually small lots -- .14 acres. They're not going to be able to build a house there." The North Carolina Attorney General later concluded the lots were too small to support a well or sewer system.
But Amy says the biggest red flag was that developers were making mortgage payments for investors. "They were making the loan payments…which is crazy," she said.
So Amy got in the car and drove up to see the land in Mitchell County for herself. She says she reached an inescapable conclusion -- no way was the land worth the tens of millions of dollars the bank was loaning on the property.
Along Penland Road near Deer Park Road north of the Estatoe community, Amy found an empty lake, gravel roads and steep lots selling for more than six times their appraised tax value.
That's when Amy says she tried to sound the alarm at BB&T. But she says bank managers would not stop the loans. So she picked up the phone and called the FBI.
Agents came to the bank. But when they did, something strange happened. The same bank that hired Amy as a corporate investigator to find fraud shut her out of the meeting with the FBI.
Amy says she was told she wasn't welcome in the meeting, because she says she was told, "... 'If they ask you a question you'll answer them.'"
Amy alleges as part of her suit that, "... they (BB&T managers) did not want the FBI to know how involved Bryan Drum was with the developers."
Bryan Drum was a vice president at BB&T, a branch manager at the same Shelby branch where Amy worked.
The developers of the Village of Penland had worked closely with Drum. They sent him a letter via FedEx dated Feb. 8, 2006, spelling out the investment scheme.
A loan officer in the Shelby branch, Michael G. Smith, says he found the letter at the printer. "I was able to intercept it and make a copy," Smith says.
Michael Smith says he did his own research. He was the man who first tipped Amy about the developer's fraud.
"I was wanting to protect the bank. That was my entire motive in bringing this to light," says Smith.
And why did Michael Smith take the case to Amy? Why didn't he report it himself? "I had some concerns based on the size of what I had discovered, um, as far as who else might be involved -- how far up the chain it went," Smith says.
To date, no one at BB&T has been charged with a crime in connection with the Village of Penland.
But all three developers mentioned by name in the February 2006 letter to BB&T's Vice President Bryan Drum, including the signer, Neil O'Rourke of Apex, N.C., Anthony "Tony" Porter and Frank A. "Skip" Amelung, have pled guilty to federal charges of perpetuating a "massive fraud."
Amy alleges that "Bryan Drum was aware they were doing it that entire time."
Michael G. Smith says in the final months of the Village of Penland, virtually all of Bryan Drum's loan business came from the Village of Penland.
He says BB&T had given Drum accolades more than once for lending more than $1 million a month.
"You're a superstar if you can do a million a month," Smith says. When I asked him if Drum was doing that volume of business in Shelby, Smith answered, "Absolutely. Consistently."
Amy's lawsuit claims that volume of business gave bank management a motive to protect Bryan Drum.
Reached by phone, BB&T's litigation practice manager Mark Booz flatly denied Amy's claims saying, "If someone's done something wrong they suffer appropriate consequences regardless of their status in the organization."
Drum now works for another lender. Reached by phone he referred questions about the Village of Penland to his Shelby attorney, John Church, who told me by phone, "He (Drum) has not been charged criminally. As far as I'm concerned he's just some poor witness who got caught in the middle of this Penland situation."
When I tried to ask John Church about the February 2006 letter to his client -- a letter from a developer now bound for 39 months in federal prison -- Church hung up on me.
As for Amy, BB&T fired her. "They listed poor performance," Amy says. "However, I never had been given any negative evaluations."
BB&T attorney Mark Booz told me, "Nobody was terminated because they were blowing the whistle." Booz said, "She (Amy) was not a whistleblower. Her job was corporate investigator. She was just doing her job."
But an attorney representing Amy in her federal whistleblower lawsuit, Judy Hoyer, says Amy qualifies as a whistleblower and should be eligible for protection under federal law. "Amy was not the first person to know about this," Hoyer says. "But there's this corporate mentality that you close ranks. And as long as the bank is making money it goes on."
Booz, the BB&T attorney, adamantly denies this, saying, "BB&T has cooperated fully with the FBI and all other government agencies with respect to the Village of Penland.
That "village" is now little more than weeds.
North Carolina Attorney General Roy Cooper shut down the Village of Penland more than two years ago. Cooper concluded it wasn't a development at all but a massive scheme by the developers.
This week Amy's case goes to a federal judge to decide.
She says she wants her job back and she wants to let other employees of the bank know that "if you do the right thing you're not going to be retaliated against."
Investors have sued BB&T and other banks, which loaned a total of about $120 million at the Village of Penland.
To add a comment, please register or login.