Federal Grand Jury Indicts Four for Running “Foreclosure Rescue Scheme” That Exploited Vulnerabale Homeowners Facing Foreclosures
DALLAS — A federal grand jury in Dallas returned an indictment yesterday charging four individuals with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, the indictment charges each of the defendants, Mark Demetri Stein, 36, of Carrollton, Texas, Richard Bruce Stevens, 51, of San Antonio, Texas, Bruce Kevin Hawkins, 52, of Desoto, Texas, and Christina Renee Caveny,37, of Dallas with one count of conspiracy to commit mail fraud and five counts of mail fraud.
The defendants are expected to make their initial appearance before U.S. Magistrate Judge Paul D. Stickney later this week.
The indictment alleges that the defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.
According to the indictment, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, 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 a new home loan with a reduced interest payment and reduced monthly payment. The conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.
Furthermore, the conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.
As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”
Further, according to the indictment, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each count charged in the indictment carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. Restitution could also be ordered.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. With the charges in this indictment, 25 defendants have been charged as part of that initiative. Sixteen have been convicted, one resulted in a mistrial, and eight are pending trial.
The Dallas FBI is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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