As a veteran Marine captain with previous experience at a large investment-management company and a website picturing his young family, money manager Stephen Peters attracted a couple hundred clients over the last decade. Now, the founder of Raleigh-based VisionQuest Capital faces federal charges of allegedly defrauding investors of about $15 million. In addition, the Securities and Exchange Commission has charged Peters, 44, with diverting $4.4 million of his clients’ money to help buy a horse farm in Wake County, art, jewelry and a vacation home in Costa Rica.
“As we all know, there are two sides to every story, and Mr. Peters very much looks forward to telling his side through the vigorous defense of this case,” says Wes Camden, Peters’ Raleigh attorney. “He denies the charges against him and looks forward to having his day in court.”
Formerly a senior vice president at Oaks, Pa.-based SEI Investments, Peters started a wealth-management business in Raleigh in 2005 then added a financial-advisory business in 2008. The company raised $11.2 million in capital in October 2016, bought investment firms in Charlotte and Richmond, Va., and set a goal of managing $1 billion by 2021, Peters told the Triangle Business Journal.
Last July, the FBI confirmed it was investigating VisionQuest after officials searched the executive’s home and office, seizing his cellphone. In late December, Peters was charged with investment-adviser and wire fraud; the sale of unregistered securities; engaging in monetary transactions in criminally derived property; and corruptly endeavoring to influence a federal agency. “Peters stole large portions of the investor proceeds and carried out a Ponzi scheme on investors,” according to the indictment. The SEC maintains Peters “spent at least $4.9 million to make Ponzi payments to earlier investors.”
The filing notes that Peters’ VisionQuest sold $15 million worth of notes promising investors an 8% annual return, or 9% if the money was reinvested. With 10-year Treasury bills yielding less than 2.7%, such returns are obviously attractive. The SEC noted many of Peters’ clients were risk-averse retirees seeking a safe income stream.
In July, VisionQuest made a court filing noting it had not missed payments to investors, many of whom are “high net worth, sophisticated individuals already engaged in multiform wealth-management strategies.” The filing explained Peters’ strategy of selling unsecured notes to investors and using that money to develop low-income housing projects. “Unfortunately, some of these investments were unsuccessful,” the filing noted, prompting a shift in strategy to instead buy money-management firms. “The implication of wrongdoing at VisionQuest has led boarders to remove their horses from his family stables, his employees to leave his companies, and longtime clients and investors to demand the return of their funds.” Damage to his business and reputation “likely is irreversible,” according to the filing.
In with the new
Raleigh developer Jack Morisey can claim the title of infill kingpin after the National Association of Home Builders honored his Oakdale at Mordecai project as the nation’s best of its genre at the group’s January annual conference. Infill, which is jargon for replacing old properties with new ones in inner-city neighborhoods, is among real estate’s hottest trends because of the popularity of urban living. Infill hadn’t been a priority for Morisey’s Community Properties, which has developed a couple dozen suburban-oriented neighborhoods around the Triangle since the 1970s. That changed in 2015, when Morisey paid $6.6 million for a 7.5-acre site that included 71 apartments a mile north of the state Capitol. After knocking down the apartments, he worked with homebuilder Chip Robuck to design a community that’s been an aesthetic and financial success: 49 of the project’s 56 units have been built or sold for an average of $624,000.
Infills inevitably raise gentrification issues, and the new project replaced apartments affordable to people of modest means. But Morisey says the aging Kip-Dell Homes properties would have needed massive rehab and much higher rents.
Association judges liked how Morisey and Robuck designed the development to blend with historic homes in the popular Mordecai and Oakwood neighborhoods. Buyers include both young professionals and empty nesters who want to live near Raleigh’s revitalized downtown and Person Street districts, Morisey says. If his name is familiar, there’s a reason: His father, Johnny, co-owned Fonville Morisey Realty, one of the city’s biggest residential real-estate brokerages, from 1973 to 2006. He now works with his son.
By David Mildenberg
MORRISVILLE — Conduent will invest $2.7 million and create 200 jobs at a global technology and innovation hub. Average annual salary will be $100,000, nearly double Wake County’s $53,783. The Florham Park, N.J.-based business-services provider was formerly part of Xerox.
MORRISVILLE — Flextronics Americas will lay off 138 workers by the end of May. Affected positions include engineering technicians, machine operators and supervisors. The electronics manufacturer is a division of Singapore-based Flex.
RALEIGH — Sprout2 raised $4.5 million from 203 investors. The company is the successor to Sprout Pharmaceuticals, which was acquired in 2015 by Valeant Pharmaceuticals. The Canada-based drugmaker divested the company in 2017. Sprout2 makes Addyi, a treatment to enhance the female libido.
RALEIGH — INC Research has rebranded as Syneos Health. The contract-research organization acquired Boston-based inVentiv Health in August in a $4.6 billion deal. Syneos employs more than 21,000 people worldwide.
DURHAM — Stent-maker Tryton Medical named Carl St. Bernard chief executive officer. He comes from Johnson & Johnson Vision, where he was vice president of its U.S. surgery business. St. Bernard succeeds interim CEO and Tryton co-founder Richard Davis.