UNFINISHED BUSINESS: Multiple homeowners claim NC builder took bank draws, cash and left their homes unfinished

LINCOLN COUNTY, N.C. ( QUEEN CITY NEWS ) – The only thing I could hear on Furnace Road Extension this April morning was the wind whipping the house wrap outside of Lisandra Flores’ unfinished home. The birds were soaking up the warmth of the morning sun and the wind helped clear the dew that had settled overnight.

The opening where the two-car garage door was supposed to go was a gaping opening, showing off the framing job inside. There wasn’t a single piece of drywall screwed to any of the wall studs.

The spot where the heat pump was supposed to go was marked with a copper line and a PVC pipe dangling from a hole drilled through the brick foundation.

There was no heat pump anywhere on the property.

The home looked abandoned, but a phone call weeks later revealed this building was a young family’s dream home. A family that, for the past three years, were packed into a relative’s home waiting for their house to be finished.

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Flores said it took her builder months to break ground at the site after they closed on the lot in September 2021. It took the builder six months to get the foundation, framing, and roof built, according to Flores.

After $189,000 in bank draws from their construction-to-perm loan, Flores said the work stopped. The loan became a permanent mortgage after the construction completion deadline passed. Although the house was never finished, the Flores family’s made mortgage payments on the $189,000 loan for the past three years.

A home they can’t live in.

The Flores’ fired their builder, Distinctive Homes and Development Group, in January 2024. The building permits show the original contractor was Blackmon Custom Builders, Inc. Building permits show Distinctive Homes took over as the general contractor from Blackmon in August 2023.

The N.C. Secretary of State Records lists Mario Cotto and Parathazathel Mohanan as managers and chief financial officers of Distinctive Homes and Development Group. A Davidson man named Gerome Blackmon is listed as the president of Blackmon Custom Builders.

The Flores purchased the lot from The Lion Real Estate Group. State corporation filings show Cotto listed as the chief executive officer for that limited liability company, according to the most recent filing.

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In September 2023, the Flores and three other families were hit with a lawsuit from Robinson Builders Mart, a builder supply company in Newton, N.C. The lawsuit named the families and their properties as defendants, claiming the contractor, identified as Parathazathel Mohanan in the lien lawsuit, purchased $132,463.65 in building materials from the supply company and never paid the bill.

The Flores’ building permit shows Blackmon’s firm as the contractor at the time of the final invoice dated July 13, 2023. County records show Blackmon was removed and replaced by Distinctive Homes and Development Group on August 11, 2023. Gerome Blackmon is not listed as a defendant in the lien litigation. Cotto’s is not listed as a defendant but is listed in the certificate of service, along with Cotto’s business office address in Denver as a person and location to be served with filings in the lawsuit.

The filing also contains a document titled ‘Personal Guarantee’ with Mohanan’s signature and an email address for Distinctive Homes and Development Group. The document was part of a credit account at Robinson Builders Mart, where Mohanan promised “full and prompt payment of all indebtedness.”

The filing shows $18,441.68 in materials purchased for the Flores home, but the invoices were never paid. The other defendant families owed the balance of the unpaid debt, with one Gastonia family facing a lien of $83,508 in unpaid invoices.

The building supply company later removed the families as defendants, leaving Mohanan as the only named defendant in the lawsuit. In October 2023, a $155,189.45 judgment was issued against Mohanan. The amount included the unpaid invoices for building materials, as well as $20,242 in attorney fees.

On December 7, 2023, a certificate of judgment satisfaction was filed in the Lincoln County Courthouse, showing Mohanan paid the judgment.

The Flores home still sits unfinished today. They hired a new contractor, who took over the job in March. The Flores’ home is now closer to completion than it’s ever been.

$326,000 FOUNDATION

You can flick a 16-penny nail from the Flores’ front porch and hit what was supposed to be Lisa Labelle’s dream home. She found the lot in July 2023. Out front was a realtor sign, with a woman named Joy Cotto as the listing agent.

Labelle thought the view of the Lincoln County hills was the perfect spot to sink her savings and had her realtor contact Joy Cotto to begin negotiations. Joy and Mario are married, and Labelle said that the conflict was disclosed to her, and she signed a document acknowledging it.

She purchased the lot and hired Mario Cotto’s The Lion Real Estate Group in September 2023 to build a $429,580 home. A foundation was already on the lot. Labelle said she wired Cotto $158,000 in August 2023 to a Wells Fargo account. But, after closing on the lot in September, Labelle said Mario Cotto seemingly disappeared.

“Nothing had been done,” Labelle told Queen City News Chief Investigative Reporter Jody Barr. “Kept driving to the lot on the weekends, nothing’s going on. Nothing’s happening. I’m finding this strange and I’m driving out there and I’m never seeing any type of work being done on any of the houses. And that was a red flag. Why am I not? I see all these half-built houses, why do I never see tradesmen?”

Labelle said she then turned to her realtor for answers, “And I start saying to my real estate agent something strange here, and she’s calling Mario,” and Labelle said those calls went unanswered for weeks.

Labelle got tired of waiting. By this time, the bank had disbursed $168,000 in additional construction loan draws to Cotto, according to Labelle.

“In between that time when I realized that something was terribly wrong,” Labelle said. She called her loan officer at Truliant Federal Credit Union to find out what she could do to move the builder. She said her loan officer was no help.

“I emailed a disbursement agent at Truliant and said there’s fraud—I think there’s fraud going on here. I think I’m being—a fraud is being committed against me. And this builder, here’s the history, here’s, you know, here’s all the information. And I knew that if I did that, when you yell fraud at a bank, they have to investigate it,” Labelle told QCN. “And that did work. And I think that raised some flags at the bank.”

The following day, framers were driving nails and sawing floor joists at Labelle’s lot. It took two days for the framers to install the floor system and partially frame two garage door walls. Labelle said the crews disappeared and no one ever showed up again.

Labelle fired Mario Cotto in January and filed multiple complaints against him with state and federal agencies. She also filed complaints against Joty Cotto with the N.C. Real Estate Commission and Canpoly Realtor Association in Charlotte, accusing Cotto of ethics violations by knowing about the delays with all of her husband’s builds and hiding that from Labelle at closing.

Our research shows the Cottos are involved in 22 properties in two subdivisions in Lincoln County. One is located off Furnace Road Extension, the other on Church Hill Lane near Maiden. Lincoln County building department records show only one certificate of completion.

The rest remain unfinished still today.

Our ‘Unfinished Business’ investigation uncovers the network of people and companies involved in the Cotto housing development business and the legal troubles surrounding them—including a law enforcement investigation underway into what’s crushed the American dream for so many people in Lincoln County.

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