The Department of Justice announced that Bruce Kevin Hawkins, 52, of Desoto, Texas, recently pled guilty in a federal court in Texas regarding his role in a foreclosure rescue scheme that ran from February 2012 to January 2013 and bilked over $240,000 from homeowners facing foreclosures. Hawkins pled guilty to one count of mail fraud and faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Restitution and forfeiture could also be ordered.
Hawkins, who has been in custody since his arrest in January 2017, was indicted in December 2016 along with three co-defendants: Mark Demetri Stein, 36, of Carrollton, Texas; Richard Bruce Stevens, 51, of San Antonio; and Christina Renee Caveny, 37, of Dallas. In a six-count indictment, Hawkins, Stein, Stevens, and Caveny were charged with conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349, and with multiple counts of mail fraud, in violation of 18 U.S.C. § 1341. Stein and Stevens have pled not guilty; their trials are scheduled to begin in late August. Earlier in June, Caveny waived indictment and pled guilty to a criminal information charging her with conspiracy, in violation of 18 U.S.C. § 371. Caveny faces a maximum possible sentence of five years in federal prison, a $250,000 fine, restitution, and forfeiture. Sentencing proceedings for Caveny and Hawkins will be scheduled for a later date. United States District Judge David G. Godbey will preside over the trial and sentencings.
According to stipulated facts filed as part of Hawkins' guilty plea, Stein, Stevens, and Hawkins operated CBMS Innovative Real Estate Solutions, Texas Real Estate Services, and ERealty Mortgage Group, LLC, respectively, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive new home loans with reduced interest payments and lower monthly payments. Hawkins and the other conspirators falsely represented to homeowners that they had "investors" standing by who were ready to quickly purchase the homeowners' present loans from the lenders holding the current mortgages. To accomplish this, the defendants falsely represented that they would use investors to purchase the homeowners' loans from the original lenders at a greatly reduced price through a "short sale" process. Hawkins and the other defendants also falsely represented to the homeowners that the homeowners had the legal authority to transfer their deeds to the defendants.
The defendants demanded that the homeowners start making all future loan payments to them based on fraudulent so-called "loans," and they also told the homeowners to ignore late payment notices sent by lenders. As part of the scheme, the defendants conducted a fraudulent "closing" for each homeowner, causing the homeowner to pay a large down payment on the new "loan." The defendants also directed homeowners to sign faulty documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called "land trust."
The conspirators falsely represented to homeowners that they could "sell" the property back to the homeowners with new loans, even though the defendants knew they did not legally own the property. The defendants also instructed several homeowners to file for bankruptcy without following up with the bankruptcy process as an additional means to delay foreclosure and conceal the criminal conduct. The defendants concealed that all down payments and monthly mortgage payments collected from the homeowners were spent for the defendants' own personal benefit.
According to the Department of Justice, the scheme victimized at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes. The four defendants collected a total of at least $242,000 from the homeowners.
Foreclosure rescue schemes have often been the focus of enforcement actions by the Department of Justice. In 2014, two scammers from California pled guilty to a scheme that caused losses of more than $2.5 million. According to court documents, the two defendants have not yet been sentenced, pending the completion of remaining obligations under their plea agreements.
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