Real estate acquisition through receivership


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No 4 Morning Circle, Buffalo Creek Club, Rockwall, Texas

“All for Hall from Rockwall…” – campaign slogan of veteran Congressman Ralph Hall

Rockwall, TX –  Stephen Warren sat in the back of a police cruiser in front of the mansion he had finished building out on a cul-de-sac at an exclusive golf course community, handcuffed, under arrest, charged with the aggravated sexual assault of his own wife.

From where he sat, he could see moving vans lined up, their crews poised and waiting for the signal to begin loading the contents of his home.

Only moments before, police had come to his door “about the family violence.” He told them, “You must have the wrong house.”

They had a warrant for his arrest, an instrument based solely on an affidavit filed by his wife, herself the recent subject of a domestic protection order in a family violence complaint that left him and his daughters in the home and her enjoined from coming within 500 feet of the property, contacting members of the family.

Following a tearful reconciliation, she moved back in. Within five days, she had arranged his arrest for allegedly raping her.

Stephen Warren was strictly enjoined from coming to his house or contacting his family.

Within 2 weeks, she filed suit for divorce.

The story behind just how Stephen Warren lost an exclusively located mansion valued at $1.3 million is a study in allegations of political influence, shady dealings and fraud, financial trickery of the most refined variety – something that could never take place without a high degree of collusion between cops and courts, banks and corporations, federal regulators and Congress.

Stephen Warren’s marriage to Leslie Cavanaugh, who was then a Southwest Airlines flight attendant, came off the rails within a few months of their wedding when she went incognito on out of town layovers between flights. There were a couple of months when he says he could not locate her.

When he found out she was staying in a hotel in Little Rock, he took a flight on a buddy pass, knocked on her door, and when she answered his knock, she denied him entry to the room.

Then she demanded he turn over his wallet, which she kept, leaving him bereft of money, ID, credit cards, and all the other hip pocket impedimenta of a traveling man on the move. He was a long way from home, which at the time, was the Metroplex. He now operates a building firm at Midland.

It was to be only the first of several times an allegation of rape surfaced in their relationship. When Leslie Warren threatened to call the police and complain he had raped her in her hotel room, a room he says he never entered because there was someone else there, someone she did not want him to see, he felt he had no choice but to turn and go.

His temporary salvation came when an airport courtesy van driver loaned him enough cash to catch a bus to the Metromess.

In pre-trial hearings involving the pending divorce, Judge Brett Hall of the 382nd State District Court at Rockwall ordered their home placed into a voluntary receivership. He stated at the time it was his concern that nothing should happen to Mrs. Warren’s home during the turbulent course of a contested divorce involving serious criminal allegations of rape. He is the son of former U.S. Representative Ralph Moody Hall (R-District 4), who left Congress when he was well into his nineties, one of only two members left to have served in World War Two.

A long-term member of the Texas Senate, Hall represented a staunchly conservative constituency from what was once known as the right wing of the Democratic Party, the party of Lyndon Johnson, John Connally, Sam Rayburn before he went down to defeat in the latest mid-term primaries. He started his political career as the County Judge of Rockwall County. During the latter days of his congressional career, he went on record voting against amendments that would have precluded unlimited military detention of prisoners deemed by the President to be enemy combatants under the provisions of the National Defense Authorization Acts of 2012 and 2014 – among other interesting evolutions of America’s extreme turn to the right following 9/11. Chairmanships of key committees on petroleum, aerospace, science, and technology were attached to his diadem.

During the chaotic year of 2001, the energy trading corporation known as Enron failed following the deregulation of energy. Enron had a lot of problems, chief of which was an extremely abstruse, very crooked means of accounting of its assets – and a very blurry line delineating them from liabilities.

When securities rating agencies caught on that Arthur Andersen – one of the “big five” among the nation’s public corporation auditing CPA firms – was in collusion with Enron executives, they derated the company’s securities to a point where its profit and loss posture was no longer tenable or sustainable. Enron filed for bankruptcy. At the time, it was the largest corporate bankruptcy restructuring on record, and marked the failure of the largest auditing firm ever when Arthur Andersen pleaded guilty to a felony federal offense alleged by the Securities Exchange Commission. Because a convicted felon may not sign off on an audit of a public company, that kicked one of the grand daddies of accounting to the curb of that fabled street paved with gold, Wall at Broad, New York, New York.

One part of its system consisted of “special purpose entities” carried on the corporation’s books as grossly overrated, in order to hide the true dimensions of the corporation’s debt. These shell companies are used to manage risks related to specific assets. Enron chose to issue only minimal information regarding the assets, accounting for the debt as a part of the asset, a no no on any man’s balance sheet. These “entities” are limited partnerships, funded by independent equity investors.

When it became clear that Enron’s claims that it had hedged its debt through ownership of hundreds of these special purpose entities, a close examination of the books showed it had merely attempted to hide its debt by financing the hedge with its own stock; the securities rating agencies downgraded their paper, and investors took it in the shorts for megabucks.

The disparity in power relations was never so starkly delineated. Since you pays your money and you takes your chances, investors had to trust somebody. They chose to believe Arthur Andersen, a household name through its status as a perennial advertiser on big game pro football broadcasts and PGA tournaments.

Here’s where Stephen Warren comes in.

He acquired No. 4 Morning Circle on Buffalo Creek Golf Club from a defunct investors group controlled by Enron by assuming a $550,000 “wrap-around” note. He spent another quarter of a million dollars of his own money, built the home out, and when he received a certificate of occupancy, moved in.

Within 30 days, the divorce was filed,” according to Warren. “This is all on file; you can look it up.”

In an exclusive interview he recalled that after his arrest for allegedly raping his wife – a charge that never was aired in a court when the District Attorney determined he had no case other than the affidavit filed by his wife – he was not allowed to come anywhere near his home. He didn’t know until much later that all his possessions inside the home were gone, including family heirlooms such as a baby grand piano. “I have no idea what happened to those things.” Presumably, the moving company loaded them out and whisked them away to he knows not where.

Judge Hall appointed a receiver – a local real estate agent. During the time he was estranged from his family and his property, the bank foreclosed. He lost a quarter million in “hard dollars” and his sweat equity in a home he had acquired at a greatly discounted rate.

Warren knows not who paid the price, or how much, but those who brokered the deal saw nothing but pure profit.


There is a third time his ex-wife accused him of rape. She gave an affidavit alleging he committed the aggravated sexual assault of his oldest daughter by inserting a blue object in her vagina. When a special prosecutor learned there was no DNA on the object, he dismissed the indictment because – again – he had only his ex-wife’s affidavit.

In that case, the Special Prosecutor was acting for DA Ray Sumrow, who was then facing two counts of theft by a public servant for stealing $10,000 worth of computer equipment and theft by conversion of $68,000 in office funds he had deposited in his personal bank account. Sumrow received a 15-year sentence in 2008 and made parole after serving 20 months.

By that time, Warren’s ex-wife had become Mrs. Leslie Cavanaugh Bird, wife of Daryl Bird, a real estate financial operator with a paper trail resembling the course of the Platte – a mile wide and an inch deep.

According to Warren, the couple moved in together immediately following his arrest for allegedly raping his ex-wife and her filing to divorce him.

In depositions taken October 1,2015, his attorney Cynthia Clack asked if Daryl Bird had been employed by entities known as Lone Star Tavern Private Club, Inc., of The Colony, Texas; had he been involved with a company in Jamaica; was he employed for five years by GE Real Estate; what was his involvement with Lone Star Funds; had he been a Vice President at PNL Company, 2100 Ross Ave., Dallas; was he once employed by Goldman Sachs Commercial Mortgage Capital?

In each case, he responded by saying “I hereby invoke my spousal privilege not to testify against my wife.”

Leslie Bird is facing a contempt of court action that includes 121 counts of defying court orders by not allowing Warren to visit or have possession of his children. Potentially, each count could result in a six month stay in the County Jail. The judge has set the hearing for January 8, 2016. Truth or consequences. 

According to financial reporting services, the companies mentioned in the deposition questions asked by Warren’s attorney Cynthia Clack, questions which Bird refused to answer, are involved in performing these diversified financial services:

PNL Companies – a “real estate venture capital company and purchaser of special situation assets, particularly sub-performing real estate loans…PNL (‘profit n loss’) invests in high yield debt and equity for land development deals and the repositioning of existing commercial buildings throughout the U.S. and Canada, with a typical transaction size of $3m-$5m.”

GE Real Estate – “operates as an investment arm of General Electric Capital Corporation…provides real estate capital and services to real estate owners and investors. The company offers financing, equity, and servicing solutions, including intermediate to long-term mortgage financing; restructuring and acquisition capital; niche equity investments/joint ventures; capital market secularization and placements; and asset management services meeting the needs of a dynamic real estate environment…”

Lone Star Funds – “was founded by John Grayken. From 1993 to 1995, Mr. Grayken was Chairman and CEO of Brazos Partners L.P., a joint venture between the Robert M. Bass Group and the Federal Deposit Insurance Corporation, that resolved approximately 1,300 ‘bad bank’ assets resulting from the U.S. savings and loan crisis in the early 90’s…Lone Star Funds is a US private equity firm that invests in distressed assets both in the US and internationally…Lone Star has to date organized fifteen private equity funds with total capital commitments since inception of over $59 billion as of June, 2015. Lone Star’s investors include corporate and public pension funds, sovereign wealth funds, university endowments, foundations, fund of funds and high-net-worth individuals…”

Having claimed these connections in internet notations about his career, he refused to answer any questions about it when deposed.



3 thoughts on “Real estate acquisition through receivership”

  1. House was never worth more than $675,000 on the tax rolls. Warren was foreclosed out for not making his note payment. If this story were true he would have sued his divorce counsel. The one he screwed out of over $1 million in his 2011 bankruptcy filing. Check it out “its in the files”.

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