Forsyth clerk of Court candidate has history of financial woes
Jeff L. Polston, the Republican candidate for Forsyth County Clerk of Superior Court, was accused of fraud stemming from his bankruptcy filing on Oct. 12, 2005.
In a Jan. 11, 2007 filing in US Bankruptcy Court for the Middle District of North Carolina, C. Edwin Allman III, a trustee of Lexington State Bank, alleged that Polston committed fraud by not reporting income as required by his bankruptcy agreement YES! Weekly obtained the public records from a local political consultant who requested anonymity due to their involvement in local elections.
The Forsyth County Clerk of Court has jurisdiction over matters relating to the probate of wills, and the administration of estates, including appointing personal representatives, auditing their accounting, and removing them from office if necessary, according to the NC Courts website. The Clerk receives and disburses money collected each year from court fees and fines and presides over other legal matters including adoptions, incompetency proceedings, condemnation of private lands for public use, and foreclosures. The Clerk is responsible for all clerical and record-keeping functions of the district and superior court.
Court documents show that Allman claimed that in March 2004 Polston began negotiations with Jeff White and White Diversfied Inc. to sell Polston’s “Hire a Hubby” business and assets. White agreed to pay $50,000 for the business, paying $5,000 up front, and $45,000 in a promissory note with payments made over time. Polston had received $9,750 at the time he filed for bankruptcy, leaving $35,350 on the promissory note.
“At the time of his bankruptcy filing, Polston knew exactly what remained due under the note,” Allman stated in court documents. “However, he chose not to disclose the value of the note on his bankruptcy petition…. Polston’s valuation of this asset was therefore false, known to Polston to be false, and it was done with the intention of deceiving his bankruptcy trustee and the court.”
Allman claims that within a few days following his bankruptcy filing in October 2005, Polston received a payment of $750 under the promissory note. Polston also received payments from White Diversified in subsequent months. Allman’s petition also claims that Polston failed to deliver a copy of the promissory note to the bankruptcy trustee and his creditor, Lexington State Bank.
Polston’s attorney, Robert Price, denied the allegation of fraud at the time.
“At no time did the debtor intend to deceive or defraud the trustee by paying the bank what he believed it was legally entitled to,” Price stated in court documents. “It was only after the trustee requested that he recover all of the documents and he went to the office of the closing attorney, John Combs, did he learn for the first time, that in fact Lexington State Bank was not in possession of the note, but Mr. Combs was in possession of the note.”
At the time of Polston’s bankruptcy filing in 2005, he owed creditors nearly $150,000, including a debt of $69,800 owed to Lexington State Bank. Allman alleged that Polston failed to report additional income, which would have violated the terms of his bankruptcy agreement Polston did not report any additional income in his court filing, in violation of his bankruptcy agreement. Polston did not return phone calls seeking comment for this story.
Court records from Bay County, Fla., reveal that Chase Manhattan Mortgage Corp. foreclosed on Polston’s Lynn Haven, Fla., home in September 2002 and received title to Polston’s property in April 2003.