CHARLOTTE, N.C. -- A lawsuit alleges a Charlotte bank committed fraud and negligence in connection with a $100 million real estate scheme.

The North Carolina attorney general stopped the Village of Penland development in Mitchell County, saying developers sold the overpriced lots by promising investors a profit without investing their own money.

The scheme used inflated appraisals and phony second mortgages.

A Charlotte couple got a $500,000 loan from First Charter, now Fifth-Third bank, for some of those lots.

"We have not been able to establish that anybody from the banks did any sort of due diligence that the general public would expect," said Michael Barnes, an attorney for the couple.

The lawsuit alleges First Charter, as well as other banks, were either active participants, negligent in not knowing about it, or both.

Examples cited in the lawsuit include the bank being a "preferred lender" and the lot prices all being the same.

"We're alleging that when you see a half-acre lot at the bottom of the mountain is worth the same as a two-acre lot at the top of the mountain, that should have raised a red flag," Barnes said. "As a banker, you should ask the question of the appraiser as to what he or she was thinking and doing when they wrote that."

Fifth-Third has countersued the couple to get its money back. The bank did not return WCNC's call.

Both sides are due in court on Wednesday.

The attorney general says the money went for other projects and lavish trips, not to the people who took out the loans.