'Ponzi Scheme' Turned Dream Homes to Nightmares
Five charged for alleged scheme that promised to pay off mortgages.
April 27, 2009— -- They were presented as investment opportunities, with live marketing pitches at luxury hotels in Beverly Hills, Calif., and Washington, D.C., for a plan that claimed to return enough money to pay off the mortgage on a dream home.
But in reality, the plan was nothing more than a mortgage fraud Ponzi scheme, investigators say. The accused fraudsters allegedly deceived individuals to invest in sham business ventures, claiming that the revenue would be used to make payments on their home mortgages.
But authorities say that the investments weren't profitable, and instead left more than 1,000 people who had poured a minimum of $50,000 each into the alleged Ponzi scheme scrambling to make mortgage payments they believed were taken care of, while the company's executives drew six-figure salaries, were chauffeured around in luxury cars and traveled in style to 2007 NBA All-Star Game and Super Bowl.
The Justice Department announced today that five people are now facing charges that they promoted complicated plans under a network of companies, known collectively as "Metro Dream Homes," an alleged scheme that targeted homeowners and those ready to purchase homes.
A federal grand jury indicted Andrew Hamilton Williams Jr., 58, or Hollywood, Fla., Michael Anthony Hickson, 46, of Commack, N.Y., Isaac Jerome Smith, 46, of Spotsylvania, Va. and Alvita Karen Gunn, 31, of Hanover, Md., who served as executives in the company. They face conspiracy, wire fraud, bank fraud aiding and abetting and money laundering charges.
Prosecutors have charged a fifth defendant, Carole Nelson, 50, of Washington, D.C., in separate charging documents known as a criminal information.
According to the charging documents, the more than 1,000 individuals invested as much as $70 million, but once Metro Dream Homes stopped making the mortgage payments the homeowners were left having to make their own payments.
The alleged scheme purported to be a mortgage payment plan and required investors to pony up $50,000 per home involved in the program, plus fees of up to $5,000.
