WILLIAMSBURG — In the summer of 2008, a few months after leaving his lucrative career as a financial adviser at Davenport & Co., Allen H. Whitehead III began placing calls to many of his former clients, asking to meet with them to discuss a business opportunity.
He was seeking well-heeled investors for his nascent firm, a cell-phone retailer called The Mobile Team LLC.
With his history of producing solid returns, Whitehead found many doors easy to open.
He provided prospective investors with the company's bullish projections, some of them showing that an investment in The Mobile Team could bring in annualized returns of 40 percent to as high as 152 percent, according to documents obtained by the Daily Press.
More than a dozen Virginia investors— many of them former Whitehead clients — signed on for amounts ranging from $10,000 to more than $300,000.
H. Ross Ford was one of the first to invest with Whitehead. The Williamsburg resident, lured by the prospect of big returns, plopped down $100,000 in July 2008.
The Mobile Team combined Ford's investment with a matching amount from another Williamsburg investor and $120,000 directly from Whitehead to form a separate limited liability company called Team Mobile IV.
The idea was to open five new stores in Hampton Roads shopping centers that would sell T-Mobile products directly to consumers. Each investor was supposed to get monthly checks based on the total net income of the stores, less a percentage diverted to The Mobile Team for operations.
Throughout 2008 and 2009, The Mobile Team set up eight of these LLCs, each with a separate pool of investors and its own group of retail stores.
The company eventually opened 31 stores, most of them in Virginia, Maryland and Washington, D.C., and moved its headquarters from a modest office space in Williamsburg to a lavish set-up in Glen Allen.
After Team Mobile IV's stores began operations in the summer of 2008, the monthly checks began coming in to investors, producing the strong returns Whitehead had pitched.
In first six months, Ford had already recouped nearly 10 percent of his total investment.
"I thought, this is great. We were getting super results," Ford said.
Based on that early success, Ford decided in February 2009 to invest in another batch of stores gathered under an LLC called Team Mobile VI.
Similar scenarios played out with other investors over the first half of 2009.
After much consternation and discussion with his wife, Pressley "Pete" McCance, a 78-year-old, self-described conservative investor who had worked more than 30 years for Alcoa, agreed to invest what was then the minimum amount — $25,000. He cut a check in January 2009.
"Allen Whitehead had been such a conservative individual who had become extremely successful in the financial market, and I didn't believe he would have left his job unless he had really done his homework on this new company," said McCance, a longtime Whitehead client who grew to become his friend.
"We made our decision to invest totally based on Allen. We never would have made that same decision with someone I didn't know and trust."
He, too, began receiving monthly checks that seemed to validate the wisdom behind his investment and his trust in Allen Whitehead.
A change in fortunes
But inside The Mobile Team's offices, it was becoming clear to executives that the business was rapidly unraveling.
The company was losing roughly 40 percent of its customers per month, and it was falling behind on rent and its payments to T-Mobile and other vendors, according to a court filing.
"The company had a successful launch, but then floundered 12 months later," Whitehead wrote in a court filing.
Whitehead began to pull money out of his retirement account to keep the firm solvent, a move he described later in court papers as "necessary … to meet a financial crisis."
By April 2009, Ford's monthly checks stopped coming.
The next month, McCance stopped receiving checks.
Same for Williamsburg-area residents Perry Moore, Sean Allburn, Ron Lynde, Linda Digges and others.
Investors began pressing Whitehead and The Mobile Team's other executives for an explanation.
When they didn't get one, they demanded the detailed financial documents they were entitled to review under the operating agreements they signed when making their investment.
They said they never got those, either.
Allburn, Whitehead's former colleague, said the dearth of answers and information coming from The Mobile Team left him "shocked and disgusted."
"We all began to get extremely concerned with what in the world was going on," McCance said. "I sent e-mails, made telephone calls, and none of them were returned. It was at that point that I realized this was not the Allen Whitehead I knew when he was with Davenport."
Problems at home
Around the same time Whitehead's business was falling apart, his personal life appeared to be, as well.
He left Kristy, his wife of 17 years, in January 2009 after starting an affair with Mobile Team colleague Joyce Price, who at the time was married to the company's co-founder and chief operating officer, Christopher Price.
In June 2009, Christopher Price left the company. Days after his departure, three more of the firm's top executives departed, including the directors of finance, accounting, and training and development, according to a court filing.
Joyce's son from an earlier marriage, Trever Bybee, stayed on as CEO.
Whitehead moved out of Williamsburg and bounced between the Richmond area and the Middle Peninsula. Many of his close friends and former colleagues said they never heard from him again.
Kristy Whitehead filed for divorce in May 2009. She said in the filings that the Allen Whitehead she knew was gone.
For Allen, "Family was always first, devotion to his wife and two children," Kristy wrote in the filing. "Now it was about getting as many investors as possible.… He became obsessed with finding money."
The 5,400-square-foot house they had built in Ford's Colony a few years earlier sold for $659,000 in 2009.
Whitehead stopped visiting his children. He stopped returning friends' calls. He stopped attending the church where he once had been a very public figure. He effectively vanished from Williamsburg.
No one knew what to make of the vast change they saw in Whitehead, and they still struggle to explain it.
"The change in his character is so far from who he was to who he is now, it is scary," Kristy Whitehead wrote in her divorce petition.
In his response filed in court, Whitehead defended his actions.
"Despite what Kristy thinks, I am that same person," he wrote. "Those who have known me before and after (the marital) separation would recognize me as the same person."
Whitehead wrote he was "plagued by the stress of handling phone calls and text messages from old friends and acquaintances who are chastising me for my behavior."
Even David Anderson, his business partner for 12 years, couldn't get Whitehead to return his call.
"There are many people hurt in this process — his family, people who trusted him with resources, and his friends," Anderson said. "I'm saddened by the whole situation."
Investors grew restless. They eventually banded together and hired an attorney to help sort out the affair.
But by then, it was too late.
Tomorrow: Running from the wreckage.Copyright © 2015, The Baltimore Sun