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Regulation and Compliance > Litigation

Ex-Advisor, Minister, Gets 10 Years for Real Estate Scheme

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A former advisor, certified financial planner and attorney who also moonlighted as a minister was sentenced to 10 years in prison for investment advisor fraud, securities fraud and two counts of mail fraud, according to court documents and the Justice Department.

Douglas Hawkins was sentenced on May 9 in U.S. District Court for the Eastern District of Kentucky, Central Division, in Lexington, by U.S. District Judge Karen Caldwell.

Hawkins, based in Lexington, faced up to five years in prison on one investment advisor count, up to 20 years in prison on one securities fraud count, and up to 20 years in prison on each count of mail fraud, according to Carlton S. Shier, IV, U.S. attorney for the Eastern District of Kentucky.

However, the court also had to consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing a sentence.

Neither Whitney True Lawson of True Guarnieri — the Frankfort, Kentucky-based law firm representing Hawkins — nor Accelerated Wealth — the last firm that Hawkins was affiliated with as an advisor rep according to the Securities and Exchange Commission’s website — immediately responded to requests for comment.

Hawkins was an advisor rep for Accelerated Wealth’s Lexington office from April 17, 2012, until Dec. 14, 2017, according to the SEC report. He also started his own firm, Douglas Hawkins Investment, in April 2012, and had been serving as a part-time minister for the Church of Christ in Lebanon, Missouri, since June 1995, the SEC report says.

In addition to the 120-month prison sentence, Hawkins was ordered to pay $1.6 million in restitution.

Under federal law, he has to serve 85% of his prison sentence and, after his release from prison, will be under the supervision of the U.S. Probation Office for three years, according to Shier.

Misleading Real Estate Deals

Hawkins was indicted by the Justice Department on Oct. 8, 2021, and convicted by a federal jury on Feb. 3, 2023.

According to the court documents, Justice Department and evidence at trial, while operating as an investment advisor, Hawkins encouraged his clients to invest in securities that were properties in Jackson, Mississippi.

In or about May 2013, Hawkins started an association with Oregon-based companies True Wholesale Houses and Portland Funding (both referred to as TWH through most of the indictment) that offered investors the option to purchase promissory notes backed by real estate deeds of trust. The TWH business model asserted that the pieces of residential real estate, securing the respective notes, would provide rental income to pay interest on the note.

Clients invested more than $2 million in the properties. Although Hawkins encouraged the investments, he withheld crucial information about the properties from his clients, including that many were uninhabitable, had burdensome rent collection and were frequently subjected to theft and vandalism.

Hawkins also didn’t tell his clients that their investment funds would be used for purposes other than the properties, including paying other investors and buying a Harley Davidson for an employee.

The investigation was conducted by the U.S. Postal Inspection Service and the Kentucky Department of Financial Institutions.

(Pictured: Douglas Hawkins)


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