In September 2010, Phelps was accused of making a fraudulent transfer of $8.1 million in assets from his companies over time. He used the money acquired from promissory notes to help buy Chinqua Penn Plantation in Rockingham County, two corporate jets, cigar-manufacturing equipment and a 2008 Maserati Quattroporte.
The Mocksville businessman and convicted felon was sentenced to a little more than three years in prison and ordered to pay $5.1 million in restitution during his sentencing hearing before a U.S. District Court judge in Mississippi.