U.S. Attorney Erin Nealy Cox (center) announces the guilty plea of former Dallas City Council Member Carolyn Davis, and the indictment of Dallas developer Ruel Hamilton.

Former Dallas City Council member Carolyn Davis pleaded guilty to taking bribes from a local developer, the U.S. Attorney’s office announced Friday.

AmeriSouth Realty Group founder and CEO Ruel Hamilton was indicted on two counts of bribery as well, officials said. Documents for both Davis’ plea and Hamilton’s indictments were unsealed Friday.

US Attorney Erin Nealy Cox told reporters Friday that her office has “relentlessly” addressed public corruption cases in the last 14 months.

“And today, the reckoning continues,” she said.

Carolyn Davis

Davis admits to taking bribes while she was Housing Committee chair, sometime between November 2013 and June 2015. Her plea agrees that she took $40,000 from a developer for her assistance in getting an affordable housing project passed.

While Davis’ charges do not name Hamilton directly (he is called Person A), Hamilton is charged with two counts of bribery regarding local government receiving federal benefits.

Davis’ official charge is conspiracy to commit bribery concerning programs using federal funds.

“In return for the money — plus the offer of a consulting contract once her tenure at the City Council concluded — Council Member Davis admits she lobbied and voted for the authorization of a $2.5 million development loan to fund the Royal Crest housing project, along with a City of Dallas resolution supporting 9 percent tax credits for Royal Crest, which was competing with another project,” the DOJ’s press release said.

On its website, AmeriSouth touts 14 projects in six Texas cities, including Royal Crest. (more…)

  • SEC charges come two months after the Texas State Securities Board charged Christian Custom Homes CEO Phillip Carter with fraud
  • Agency alleges Carter and two co-conspirators defrauded more than 270 investors
  • Christian Custom Homes and several other companies owned by Carter are now under control of new manager

A little more than two months after the state of Texas charged Frisco-based Christian Custom Homes CEO Phillip Michael Carter with several fraud charges, the Security and Exchange Commission announced it too would charge him and two other alleged co-conspirators with fraud.

Phillip Carter, left; Shelley Carter, right.

In November, the Texas State Securities Board announced the indictments of Carter, and his wife, Shelley Noel Carter, on assorted state fraud charges stemming from alleged misuse of investor funds meant to go to real estate development ventures. Carter was also indicted in Collin County Court on charges stemming from the sale of fraudulent promissory notes, along with Richard Gregory Tilford of Arlington, who is alleged to have raised $6 million from investors. Carter’s wife, Shelley, was charged with money laundering and misapplying investor funds.

Bobby Eugene Guess

The state’s indictment against Carter alleges that he raised nearly $17.5 million from nearly 100 investors, primarily elderly Texans, for real estate development projects through Texas Cash Cow Investments Inc. and North Forty Development LLC.

One of Carter’s sales agents, Bobby Eugene Guess — had been served with a target letter from the U.S. Attorney’s Office informing him that he was under investigation for mail fraud, money laundering, and securities fraud, and in July he was sentenced to 12 years in state prison.

Guess, a former wealth manager, also hosted the radio program “Dollars & Sense” on WBAP.

The state charges for Tilford and both Carters remain pending.

The SEC Alleges ‘Multi-Million Dollar Offering Fraud’

The SEC’s announced it was charging Carter, Guess, and Tilford for conducting “multi-million dollar offering fraud.”

The agency alleged that the three raised almost $45 million from more than 270 investors across the country by selling short-term, high-yield promissory notes that were issued by shell companies that the SEC alleged were intentionally created to confuse investors. (more…)

We know the City of Dallas is aiming to strengthen its Citizens Police Review Board, the entity which examines alleged inappropriate police behavior within the Dallas Police Department against citizens.

In fact, I am fairly certain this is a done deal and will happen within the next two to three months.

Dallas City Council likes to tell citizens what they are going to do, before they do it, even though they know they are going to do it, under the guise of “informing”. And so the fifth in a series of public education meetings enlightened North Dallas Tuesday night at Gateway Church on Hillcrest Road at Willow Lane. The well-attended and, at times, contentious meeting, brought together three northern city council Districts (11, 12 and 13) as citizens voiced concerns over giving the board new teeth, subpoena power, creating a potentially political bureaucracy, and, as one attendee said, “insulting police by assuming that they are doing something wrong in the first place.”

In fact, we were told that Dallas has far fewer complaints against police than other cities of similar size, which the board said was because many people in Dallas are afraid to say anything negative about police. (I’m told that up until now, there has not even been a form to fill out.) Some at the meeting didn’t know the board even existed. The CPRB representative, Paul Hille, filling in for chair Dr. Brian Williams (appointed by Mayor Rawlings), had to explain to the large, mostly police friendly group, that not everyone considers the police friendly.

I daresay a vote for police pay raises in this group would have been a slam-dunk. (more…)

For those who are laundering ill-gotten gains via real estate transactions, regulators are about to make life much, much harder. 

Geographic Targeting Orders (GTO) are temporary regulations put in place by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). The overall point of the orders is to understand and curtail money laundering, tax evasion, and terrorism financing on certain types of transactions. “Geographic” means the orders target specific areas versus the entire country.

On Nov. 15, FinCEN expanded a GTO on residential real estate transactions purchased in cash (actual cash, various checks, and virtual currencies) by foreign shell companies and domestic LLCs mostly. This latest expansion now includes the Dallas-Fort Worth area along with 11 other metros – Boston; Chicago; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

The GTO requires Title Companies to not only report on the transaction, but the actual selling price and the identity of the beneficial owner of the property (person with over 25 percent ownership of the LLC) and the person representing the LLC. Identities are verified via copies of passports, driver’s license, or other government-issued I.D. The country of origin of the LLC or shell company is immaterial with reporting required regardless of the LLC’s incorporation location. Why title companies? They’re a common element in real estate transactions and so act as a clearing house for information.

(more…)

Christian Custom Homes president Phillip Carter in a still from a promotional video. Carter, several associates, and his wife were indicted recently for fraud.

Investors were lured by brochures, radio interviews, and email invitations for dinners, where they could learn about “9% investment return opportunities” with North Forty Development and Texas First Financial. Instead, hundreds saw their money allegedly spent on anything but real estate development.

Phillip Carter, left; Shelley Carter, right. (Photos courtesy Texas State Securities Board)

The president of Frisco-based Christian Homes, Phillip Michael Carter, and his wife, Shelley Noel Carter, were indicted Tuesday on assorted state fraud charges stemming from alleged misuse of investor funds meant to go to real estate development ventures, the Texas State Securities Board announced Wednesday.

Phillip Carter was also indicted last week in Collin County Court on charges stemming from the sale of fraudulent promissory notes, along with Richard Gregory Tilford of Arlington, who is alleged to have raised $6 million from investors.

Carter’s wife, Shelley, was charged with money laundering and misapplying investor funds.

The indictment against Carter alleges that he raised nearly $17.5 million from nearly 100 investors, primarily elderly Texans, for real estate development projects through Texas Cash Cow Investments Inc. and North Forty Development LLC.

“Carter and Tilford told investors their money would be used to develop commercial and residential properties,” the TSSB said.

But instead of using those funds for revenue-generating investments, Carter used them for things like paying personal expenses and paying off a personal Internal Revenue Service tax lien. (more…)

Tarrant

Photo courtesy Tarrant County

Longtime Tarrant County Justice of the Peace Jacquelyn Wright has had her fair share of controversy in the 28 years she’s served in that position.

But that controversy may be outpaced by Wednesday’s news that a grand jury indicted Wright, 77, on four felony charges related to homestead exemptions she claimed.

It is alleged that she falsely claimed the exemptions on homes she did not live in to avoid paying property taxes on a home on Ivy Hill Road in Fort Worth, the indictment said. Her claims spanned from 2010 to 2018, when she falsely applied for and received a homestead exemption in 2015, 2016, and 2018 for the Ivy Hill Road home. (more…)

Manafort’s Long Island Home at 174 Jobs Lane, Water Mill, New York

In the first of two trials, former Trump campaign chairman Paul Manafort was found guilty in August on eight of 18 counts of fraud. All that kept him from being found guilty on all 18 counts was a lone juror.

The “witch hunt” had found another witch. Not eager for a potentially worse repeat at his upcoming second trial, Manafort cut a deal with the feds pleading guilty (admitting his witchcraft) and agreeing to surrender a bunch of assets including some real estate some are valuing at $22 million.

In a “birds of a feather” twist, Manafort’s spec builder son-in-law Jeffrey Yohai filed for bankruptcy in 2016 as four multi-million dollar (unsold) spec homes fell into foreclosure. The whole affair also ignited lawsuits by Dustin Hoffman and others claiming Yohai was running a Ponzi scheme. No stranger to legal troubles, Yohai and wife Jessica Manafort were sued for running an illegal Airbnb operation from their three New York apartments – in the middle of divorce proceedings.

But hey, it’s easy to get lost down a rat hole, let’s just concentrate on what the elder Manafort is forfeiting … over on SecondShelters.com.

And he apparently had a 20 year grudge against the doctor, renown Houston cardiologist Dr. Mark Hausknecht, who was shot to death as he rode his bicycle to work on July 20. He has his own brokerage, Pappas Realty Company, which he apparently ran out of his Westbury house at 5003 Stillbrooke Drive.

The suspect, Joseph James Pappas, is also a retired deputy constable who has had an active Texas real estate license since July of 1992. 

Pappas apparently tried selling a cache of weapons and ammunition online days after the killing, which may have helped Houston police find him:

A seller using the same phone number as the alleged killer posted listings for two tactical vests, a Smith & Wesson .38-caliber revolver,  a $4,500 semi-automatic FN rifle, two sets of ballistic door panels for a Crown Victoria and a box of ammunition  – items totaling thousands of dollars.

It’s unclear whether the guns listed for sale included the weapon used in the doctor’s fatal shooting.

According to KPRC, Pappas had a document notarized on July 19, the day before the shooting, to allow him to transfer his home’s deed to a woman in Ohio. Houston police are now saying Pappas may be suicidal: “He is dangerous. He is capable and, if you spot him, please call 911.” 

KPRC dug up more about Pappas, including a problem he had years ago with a former employer who characterized him as a “loose cannon”:

His record shows he worked with Harris County Precinct 2 and Precinct 7. He was first paid for his services, and later was listed as a volunteer reserve.

Pappas held an armed law enforcement job for more than 30 years, until 2013.

Pappas is not married and has no kids.

His friends called him “Joey” and he was living in the same Westbury home where he grew up. The home was raided Wednesday morning by police.

Out of the well-kept home, Pappas runs a real estate brokerage under his own name. His neighbors said he is meticulous about his own home’s lawn maintenance.

Pappas also had a business application to run a concealed handgun instruction academy, so it seems he had certain skills with a gun.

Although no criminal convictions were found, in Pappas’ past there was perhaps an inkling of trouble decades ago.

In a 1986 lawsuit Pappas filed against an employer, Channel 2 Investigates found an odd excerpt: Pappas was characterized as a loose cannon who was “barred from attending meetings … because of various inappropriate activities,” the lawsuit read.