Carolina Investors Exec Granted Parole

After spending less than one year of his five-year sentence in prison for securities fraud, a former executive of Pickens-based Carolina Investors was granted parole Wednesday by the South Carolina Parole and Pardons Board,WSPA reported.

Jack Sterling, convicted in 2009 in one of the state's biggest-ever fraud cases, will instead serve 200 hours of community service and six months' home detention. Sterling had been free on bond while appealing his conviction. But after the state Supreme Court rejected his appeal last year, he had been serving time at Livesay Correctional Institution in Spartanburg since last April.  

Sterling is one of a handful of executives convicted of defrauding investors in the wake of the 2003 collapse and $275 million bankruptcy of Carolina Investors and its parent company, Columbia-based HomeGold Financial Inc.

 He has served approximately five years of a 20-year sentence. Sheppard was turned down for parole last month at the behest of SC Attorney General Alan Wilson, according to WLTX. Wilson's office also had opposed parole for Sterling.

An estimated 12,000 people — most from the Upstate and many of them elderly — lost an estimated $278 million when Carolina Investors failed in 2003.

Carolina Investors initially offered investors returns of up to 8.5 percent, guaranteeing most of its loans only went to people who had enough collateral. But the company was taken over by HomeGold in 1995, and the new firm used the money from Carolina Investors to make high-risk mortgage loans nationwide, The State newspaper reported.

Within four years, HomeGold owed more to Carolina Investors depositors than the company was worth. After the collapse, the investors got back just 18 cents on the dollar after authorities seized bank accounts and sold off assets, according to The State report.

More here.