DISBARRED LAWYER INDICTED FOR CREDIT CARD DEBT ELIMINATION SCHEME
Gig Harbor Man Defrauded Struggling Consumers Providing False “Credit Help”
BRUCE HAWKINS, 50, a now disbarred attorney, who used to practice in Gig Harbor, Washington, was arrested this morning after being indicted by the grand jury for Mail Fraud and Money Laundering. The eight count indictment returned under seal in April 2009, details how HAWKINS allegedly promoted a fraudulent debt elimination scheme from 2002 to 2005. HAWKINS took fees from more than 1000 debtors after falsely representing that he could eliminate their credit card debt. HAWKINS took in more than $880,000 through the scheme. He will be arraigned on the indictment this afternoon at 2:30 at the federal courthouse in Tacoma, Washington.
According to the indictment, HAWKINS used his status as an attorney to promote his false legal theory that national banks could not lend credit, and therefore consumers did not have to repay their credit card debt. HAWKINS also falsely claimed that consumers did not have to abide by the credit card agreement limiting who could arbitrate disputes with the bank. Over the internet and in interviews HAWKINS falsely claimed his program could eliminate or reduce credit card debt. HAWKINS sent debtors who paid his fee to arbitrators who were complicit in his scheme. These arbitrators earned a $139 fee for issuing an “award” on behalf of the debtor. The next step in the program was for the debtors to “confirm” these unenforceable arbitration awards in court. None of the “awards” were ever confirmed and many debtors ended up in bankruptcy. HAWKINS directed the debtors to send him all the correspondence from the banks and other court records, but he rarely appeared in court with the debtors, directing them to represent themselves. HAWKINS allegedly paid a fee to other co-conspirators for every debtor they sent to his “program.”
HAWKINS allegedly failed to disclose to the debtors that numerous lawyers had contacted him regarding his false legal advice, and failed to disclose that none of the debtors who used his program had ever had their debt eliminated. When banks refused to accept the “arbitration award” the debtors presented, HAWKINS told them to just keep trying. HAWKINS claimed the banks would ultimately have to pay the debtor $1,000 for every time they contacted the debtor for payment. HAWKINS even set up his own arbitration company, Commercial Arbitration Forum, Inc. (CAFI), where he could make the bogus arbitration awards. Even after banks informed CAFI it would not submit cardholder disputes to the entity for resolution, HAWKINS continued to make “arbitration awards.” In 2003 and 2004, HAWKINS made arbitration awards for more than 1000 debtors, earning more than $100,000. HAWKINS sold CAFI to a friend who operated it as Solomon Arbitration Group (SAG). HAWKINS continued to send debtors to SAG for the bogus “arbitration awards.”
HAWKINS was disbarred by the Washington State Bar Association February 3, 2006. Read the report on the disbarment.
If convicted HAWKINS faces up to 20 years in prison and a fine of $500,000 or twice the amount involved in the money laundering transactions, whichever is greater.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Tessa M. Gorman.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.