Five years later: stories lead to federal indictment of former Dallas Cowboy Eugene Lockhart, seven others


Todd Bensman

A federal grand jury has indicted former Dallas Cowboys player Eugene “The Hit Machine” Lockhart and seven associates for a $20 million mortgage fraud scheme. (Dallas Morning News story)

The indictments stem from an FBI investigation propelled by a series of 2004-2005 stories aired and web published by the Dallas television station CBS-11 (read one here).

The stories documented how Lockhart and other former players associated with his company, Cowboys Mortgage, located straw home purchasers with good credit but low incomes and used celebrity to convince them to sign on as home buyers. Cowboys Mortgage promised to rent the homes and later sell them for profits in which the buyers would share.

Lockhart and his associates, however, extracted massive commissions from fraudulently inflated appraisals on the homes in those peoples’ names, and abandoned the properties. Banks and credit bureaus would then go after the unsuspecting buyers, who often had never seen the expensive homes bought in their names.

CBS-11’s investigative unit documented how Cowboys Mortgage employees, including Lockhart, seduced two naive buyers into the scheme with celebrity, promises of access to sports stars, home games and money. In two instances, CBS-11 showed houses to their “owners” for the first time, months after they supposedly bought them.

The Sept. 1, 2009 federal indictment said Lockhart and his associates carried out at least 54 such sales worth $20 million between 2001 and 2005, ending after the series of CBS-11 reports spurred FBI inquiries.

At the time, Lockhart and a criminal defense attorney he hired gave interviews at which they denied wrongdoing. Lockhart told CBS-11 he planned to fix deals that had inadvertently gone awry but that he had had little or no direct dealings with buyers or the deals.

It’s unclear why federal authorities took so long to indict Lockhart and his associates. One explanation provided to CBS-11 in 2004 was that the Dallas field office of the FBI had diverted many agents from mortgage fraud to counterterrorism efforts.

After the subprime mortgage meltdown helped set off a worldwide economic recession last year, the FBI prioritized mortgage fraud again.