Breach of trust

In February 2005, Juan Castillo and his wife, Theresa, were expecting their first child. The Castillos lived in an older home and wanted to remodel their kitchen before their daughter arrived. After seeing a full-page advertisement in the Southwestern Bell Yellow Pages, they hired “Mike” (a false name, it turned out) from Centex Building and Remodeling to do the work. They explained to Mike they wanted the work done before the baby arrived. Mike assured Juan and Theresa that he could get it done in time, and Juan gave him $8,000 as a down payment. Mike and some of his workers came to the Castillos’ home and gutted their kitchen. Once the kitchen was demolished, Mike disappeared.

After trying unsuccessfully to get Mike to finish the work or to get his money back, Juan was not surprised when he got a call from the Bexar County District Attorney’s Office about Centex Building and Remodeling. Juan was not alone in his remodeling debacle. More than 50 other people had been defrauded by Daniel Delafuente (a/k/a Mike), and new victims continued to come forward even after trial. A five-month investigation uncovered that Delafuente was at the helm of an elaborate home remodeling scheme that cost Bexar County homeowners over $500,000 and earned Delafuente 90 years in prison. Exposing Delafuente’s scheme, however, was not easy.
 

The first complaint

When the first complaint against this contractor came into our office, it was unclear who was the actor. The complainant was a homeowner, Ruth McClendon, who could not get the home improvement company to return and finish a job for which she had paid $20,000. The company name was Centex Building and Remodeling, and she believed the owner was Bernard Beckingham. The case hit my desk with the question, “Is this a civil dispute?” At first glance I thought it might be. There was a contract, and someone had come out to the home and done some demolition work.

We ran the name Bernard Beckingham for a criminal history and found nothing. We got his photograph from driver’s license records and put it in a lineup, but the victim could not identify him. It was only when we checked with the Attorney General’s Office and the Better Business Bureau that we realized there was more to this story. More than 10 complaints against Centex Building and Remodeling had been filed in a short time, and the allegations behind the complaints were all the same: The contractor was paid a large sum of money up front, he did some demolition, and then he disappeared. After we contacted the Yellow Pages, we learned that the $30,000 phone book advertisement for Centex Building and Remodeling had not been paid and had resulted in a default judgment against Bernard Beckingham.

Records from the AG’s office, Better Business Bureau, and Southwestern Bell Yellow Pages revealed numerous addresses and phone numbers. Linked to one of those addresses was the name Daniel Delafuente. A search on TCIC showed Delafuente had a criminal history; during that search, a deconfliction report came back indicating that two other law enforcement agencies were also investigating him. We further discovered Delafuente had several other remodeling businesses. We put his picture in a lineup, and the homeowner Ruth McClendon immediately identified him as Robert Gonzales, the man who took her money on behalf of Centex Building and Remodeling. Once Delafuente was identified as the contractor, we could focus our investigation, and the evidence and victims started pouring in.

The scam

The investigation revealed Delafuente had been running a remodeling scam dating back to 2002. At the early stages of his criminal enterprise Delafuente used his real name. However, after some of his victims started showing up on the doorstep of his $300,000 home, he began using aliases such as Robert Gonzales, Bernard Beckingham, Mike Hernandez, or just Frank. He was even found with a Texas driver’s license issued to Bernard Beckingham with his picture.

There was a real person named Bernard Beckingham. In fact, the real Bernard Beckingham had worked at one time for Delafuente. However, Beckingham was not the owner of any of the remodeling companies as Delafuente told several homeowners, and Beckingham did not know that Delafuente was using his name.  

In addition to using aliases, he used different company names. Most of them were recognizable names like Centex Building and Remodeling and Pulte Builders. Although Delafuente was not affiliated with the large home-building companies of Centex Homes and Pulte Builders, he often capitalized on their reputations and name recognition.
    Delafuente used the Yellow Pages to advertise his company’s purported services to ensure a steady flow of customers. He would contract with the Southwestern Bell Yellow Pages for full-page advertisements that cost $20,000–$40,000, then refuse to pay once the directory was already in print. Delafuente changed company names every year so he could continue to “buy” ads in the phone book and enlisted various family members to take out the advertisements on his behalf.

The advertisements were impressive—and false. They claimed Delafuente’s companies had been in business for over 20 years and were licensed, bonded, and insured. In 2002 it was Broadway Remodeling, in 2003 it was Ace Remodeling, and by 2004 it was Centex Building and Remodeling. By 2005 Delafuente had gotten so good at the scam, he had two shell companies listed in the phone book at the same time: Pulte Remodeling and Capital Remodeling. In fact, some victims had contacted both Pulte Remodeling and Capital Remodeling, not knowing they were both under Delafuente’s control.

When homeowners responded to an advertisement, Delafuente was almost always the person who came to their home for an estimate. He was consistently described as friendly, knowledgeable, and accommodating, and he always had the lowest price. Once the homeowner accepted his bid on a job, he would demand a large payment upfront. The amount varied between a third to half of the total contract price. Occasionally, he would convince homeowners to pay the full contract price upfront in exchange for a large discount.

Once Delafuente had the money, he would send one of two workers to do demolition. Apolonio Hernandez was identified at almost every home and was often the only worker who would show up. On some occasions Delafuente sent his brother Rudy Delafuente, who was also identified in some of the cases as being a “worker.” Regardless of who was sent, the work, if any was done, consisted primarily of demolition. As Delafuente grew bolder in his scheme, he began to take large payments upfront and do nothing at all.

If demolition was done, it was done for several reasons. The first was to demand a second payment from the homeowner. When the homeowner would inquire about why they had to pay more money, Delafuente would point to the demolition as evidence that the job was in progress. Almost uniformly he would tell the homeowner he could not complete the job without more money. The homeowner, seeing the house partially—and in some cases completely—demolished, would agree to pay the second or final payment on the contract.

Another reason for the demolition was to convince a third party that the nature of the dispute was in fact civil. On more than one occasion homeowners called police to complain about the loss of their money and the condition of their home. Delafuente would claim that the homeowner had made too many changes to the contract, which was why he could not complete the project. The police often believed the cases were civil contract disputes, and charges were not filed. Even the Attorney General’s Office initially believed the nature of these complaints to be civil. It was not until the continuous pattern of activity was revealed that Delafuente’s crime became evident. He was committing theft.

The charges

Delafuente and his crew were charged with engaging in organized crime to commit theft over $200,0001 and theft over $200,000.2 He was charged based upon his participation as the front man in the operation. Apolonio Hernandez and Rudy Delafuente were charged based upon their work posing as the construction workers in the scheme. Joshua Delafuente, Daniel’s 22 year old son, was charged because all the profits of the criminal enterprise were hidden in his name, making Delafuente judgment-proof to all his victims.

Both charges are 1st-degree felonies. The decision to charge both was one of trial strategy. With the organized crime charge, we had the ability to put on evidence of the structure of the criminal enterprise as well as details of its members’ participation to further the crime. Essentially, it broadened the range of admissible evidence at trial.

Even though the investigation uncovered more than 50 victims, the indictment alleged only half that number in an attempt to simplify what could easily become overwhelming. As alleged, the indictment was eight pages long and took almost 45 minutes to read. The jury charge on guilt/innocence took twice as long to read due to the application paragraph. Additionally, after hearing from 10 victims, it was clear the jurors had heard enough, and putting on all 50 victims in our case in chief could have resulted in losing the jury’s interest.

Trial preparation

Preparation for the trial of this case began from day one. Once I realized the scope of the crime, I knew that it had to be put together in a trial-ready fashion during the early investigation stages. This was not the type of case that could be organized later for trial. There were too many victims, witnesses, documents, defendants, and bank accounts to go back later and organize. In fact, once the investigation was complete, the file consisted of more than 10 boxes plus one trial notebook.

As the investigation unfolded, I put the information into a working spreadsheet. The victims went in the spreadsheet as they were discovered, and additional details of the crime were added as we learned them. Once complete, this spreadsheet allowed me to have the names, contact information, dates, type of evidence, amount of theft, and details of the specific crime for each complainant in one document. The document proved invaluable and did not take long to make because I entered the information as I obtained it. In fact, I used a modified form of this spreadsheet as my witness list for trial.

Trial

In one last attempt to con the citizens of Bexar County, Daniel Delafuente decided to represent himself at trial. Before trial he went through two hired attorneys. It was only after the jury was selected that Delafuente decided to fire his last lawyer and plead his own case.

Delafuente’s self-representation allowed the jury to see firsthand how he conned the victims. Watching this trial was like reading a textbook on con men. Delafuente was fast-talking and would talk in circles trying to confuse the issue. He had an excellent memory dating back to 2002 and recalled details about each victim that I had a hard time remembering, despite my handy spreadsheet. He also had a chameleon-like demeanor that changed from minute to minute depending on the victim or witness he was cross-examining.

Delafuente acted differently with various victims. Generally with the older victims, he was polite and respectful; however, he would go over minute details with them that they could not remember. With the female victims he exploited their lack of knowledge in the area of carpentry and would discuss the demolition, asking them if they knew the value of the work he had done. Additionally, he became more confrontational with the women and tended to be more intimidating when they were on the stand. With the male victims, he was more deferential but would try to relate to them as fathers or husbands. He also frequently talked about personal matters that he had learned from the victims during his encounters with them in some attempt to personalize himself.

Several interesting things happened during this trial. One that stands out involves Delafuente’s use of fake names. About half of the victims knew Delafuente by an alias he had used. During the cross-examinations of these victims, they addressed Delafuente by his fake name. The exchanges would begin with Delafuente asking the victim, “Isn’t it true you made too many changes to the contract?” and the victim would respond “No, Robert, I never made any changes,” “No, Mike, I didn’t do that,” or “No, Frank, that is not true.” It was interesting that Delafuente never corrected them, and it reminded the jury that these victims had been lied to from the start.

During the course of the trial, 350 exhibits were admitted and just over 40 witnesses were called. The direct examinations of the victims were structured the same way for each victim so that the jury knew each time what to expect. We asked the same series of questions of each victim and admitted the same type of evidence for each victim in the exact same format.

The outline of the direct examination was as follows:
    1) What work did the victim want done and why?
    2) How did s/he find the defendant’s company?
    3) Upon what name, description, and advertisement did the victim rely?
    4) Who initially came out to the house, what name did he use, and what things did he say to entice the victim to sign a contract (to identify Delafuente in court)?
    5) What were the terms of the contract, when was work to begin, and how much was to be paid?
    6) How much money was paid upfront and why?
    7) Who came out to the house and what names did they use (to identify the other participants)?
    8) How much additional money was given to Delafuente and why?
    9) What was the difference in ability to contact Delafuente after the money was given compared to when he was trying to get them to sign the contract?
    10) What damage was done to the victim’s home (plus photos of the damage) and how did it affect the victim’s ability to live at home?
    11) Where did the money come from that Delafuente took?
    12) Had the victim been able to get the work done or his/her home repaired? If not, why not? If yes, how much did it cost?

During the course of the trial we admitted numerous photos showing the demolition Delafuente did to his victims’ homes. Once admitted, these photos were tacked onto a posterboard that remained in the courtroom throughout the trial. As each victim testified, photos of that home were added to the posterboard. By the end of the trial we had two large poster boards filled with photos of Delafuente’s destruction.

To keep the exhibits organized during trial, they were maintained in different stacks. For example, all the contracts Delafuente gave to the victims were kept in one stack, all the false advertisements in another stack, photo line-ups of co-defendants in another, and so on. This organization allowed us to quickly find exhibits later for use with other witnesses or during argument.

The jury returned a guilty verdict in four minutes. Delafuente, a con artist to the end, delayed the reading of the verdict by asking that his pastor be allowed to stand with him when it was read. Surprisingly, Delafuente was completely unfazed by the verdict; when I passed him in the hall later he said to me, “Good job.”

During punishment I again decided to exercise restraint and put on only six additional victims of Delafuente’s home-remodeling scam. Some of those victims included a pastor from a low-income neighborhood whose church lost $18,000 and an elderly man Delafuente tried to con while out on bond for the offense. The jury also learned during punishment that Delafuente had sexually assaulted his 15-year-old niece a year earlier.

It took the jury longer to return the verdict on punishment, approximately two hours. However, it was worth the wait. Delafuente got 90 years in prison and a $10,000 fine on both counts.

Lessons learned

This case was a reminder not to underestimate the human side of financial crimes. The majority of my career I have prosecuted violent crimes, and their affect on victims and their families is obvious. However, financial crimes can have a less obvious yet substantial impact on the victims that can last for years after the criminal act has ended.

In this case, most victims were never able to get their homes finished because they could not afford it after Delafuente stole their money. These people see the damage done to their homes everyday. Other victims are still paying off home improvement or home equity loans that they took out to pay Delafuente. They are reminded each month when they write the check of how they were conned. Other victims lost the feeling of confidence and safety in their own home after Delafuente came in, took their money, and damaged the place.

While at the hospital for his baby’s birth, Juan Castillo continued to call “Mike” to finish his home project. However, three months after giving Mike their money, Juan had to bring his newborn baby home to an upstairs bedroom in his mother-in-law’s house because his own home was unlivable. When he finally moved back into his own house, Juan and his wife sterilized and washed baby bottles in a small bathroom while his family helped him put his kitchen back together. Juan cannot forget the way Delafuente damaged his home and affected what should have been a joyful time in their lives.

Juan Castillo was not the only person whose life was affected by Delafuente in a way that went beyond the loss of money. Delafuente destroyed Emma Chamberlain’s back apartment where her sister had been living. As a result Emma’s disabled sister has no permanent place to live, and Emma Chamberlain is still paying off a $44,000 loan. Billie Arredondo, a disabled woman, felt ashamed and contemplated suicide after Delafuente stole approximately $20,000 from her and her husband and left her modest home damaged. Judith Grimes spent Thanksgiving and Christmas of 2004 in a hotel because her home was left unlivable and in some places without a roof after she gave Delafuente $50,000 to improve her house. Marilyn Weininger paid Delafuente to do a room addition so that her elderly father could live out his final years in her home. She could not afford to get the work done after Delafuente took her money, and her father died a year later in a nursing home. These are just a few examples of the harm he caused these victims.

Since prosecuting Delafuente, I do not evaluate cases the same way. When asked, “Is this a civil dispute?” I hesitate to conclude it is without investigating. Even if it is as simple as an Internet search, a criminal history check, an inquiry with the Attorney General’s Office, a Better Business Bureau search, or a county records assumed name search, I urge any prosecutor to look more closely at these types of cases. You never know if lurking behind what appears to be a contract dispute is another Daniel Delafuente.

Endnotes

1 Texas Penal Code §71.02.
2 Texas Penal Code §31.03.