Before Metro Dream, A 2001 Ponzi Accusation

"That situation just didn't turn out the way we'd like, but it was a very, very good situation that turned us to a point that we feel it strengthened us instead of weakened [us] in the long haul," he said.

When a Dream Homes participant buys a house, the deal calls for 10 to 15 percent of the sales price to be given back by the seller at closing. That money, in turn, is invested in various businesses run by Metropolitan Grapevine, based in Laurel. Metropolitan Grapevine says its businesses include sales of automated teller machines, sales of prepaid debit cards, Internet communications services and video ad sales.

No one involved with the organization has been able to explain to me how the home-sale transactions, made for more than the asking price and with 10 to 15 percent cash givebacks, get through the appraisal and loan-underwriting process. Some of that information is proprietary, Dream Homes executives told me.

The program is very active in Prince George's County, and its leaders say they have made recent presentations in Fredericksburg, Charlotte, and Los Angeles. However, officials told me they are trying to manage its rapid growth. "If everybody knew about our program, everybody in the world would be running in to get this great deal," Williams said.

The big draw to participants in the program is that Dream Homes pays their monthly mortgage principal and interest at an accelerated pace that's supposed to pay off the loan balance in five to seven years. Because it has only been in business since 2006, it has not yet paid off any of its participants' homes, according to Metropolitan Grapevine Chief Financial Officer Michael Hickson. "But we are going to be paying off several homes over the next several months," he said.

Metropolitan Grapevine is a private company, so it is not required to hold annual stockholder meetings or publish detailed financial reports. The public cannot examine its books, so there is no way for an outsider to verify its assets. But exploration of the materials published on the Web sites for its various businesses, and the comments Williams made to a group of participants in June, suggest that this business model may be encountering some problems.

In addition to Dream Homes, the Metropolitan Grapevine network covers a number of businesses, including:

· HelloWorld, a video e-mail and webcast service, which has a multilevel marketing component that allows participants to earn residual commissions based on the earnings brought in by the newcomers they recruit.

· CIPCARD, a prepaid debit card program. CIP stands for Communities in Partnership, and according to the Web site, the organization will give back 75 percent of its net operating revenue to charity. The Web site does not disclose the fees associated with use of the card. Clicking on the "Fee Disclosure" link shows only an unrelated Internet privacy disclaimer. The site includes the statement "FDIC Insured," even though it is not a bank.

· POScafe, a business that involves processing credit and debit transactions for businesses that accept those cards as payment, earning fees from both the consumer and the merchant. POS stands for Point of Sale; it markets to small businesses willing to give floor space to its multi-function ATMs, which, in addition to dispensing cash, sell prepaid telephone cards. The machines also can carry video advertising.

I clicked on POScafe's Web site link to get directions to nearby ATMs but did not get directions to any POScafe facilities. Instead I was directed to an ATM locator for the Internet banking firm NetBank Inc., headquartered in Alpharetta, Ga. Jimmy Locklear, public relations director for NetBank, said the company has no record of contracts or agreements with Metropolitan Grapevine. "We will likely ask them to remove our logo from their Web site," Locklear said.

Williams told me last week that the organization's finances are discussed openly with its partners, who are welcome to attend monthly meetings. Partners include the people who have bought homes through the program.

When I attended one of those meetings in June, I saw none of the trappings of a typical board meeting. There was no written agenda, no financial report, no PowerPoint presentation, no numbers on paper whatsoever.

At that meeting, Williams told participants that ad sales for the company's ATMs were not going as well as planned.

Williams addressed what he called "challenges" facing the company. "You, my partners, I haven't given you guys the kind of attention that perhaps you've deserved," he said. Williams said that, locally, nearly 250 ATMs were already in place but that a company Metropolitan Grapevine had a deal with to sell advertising on those machines (at a minimum of $350 per ad) hadn't "stepped up to the plate" to sell ads.

"Who's mad at us? You are," Williams said. "You should be getting income off these machines." Others were upset, he said, including, "the merchants where we placed these machines, because just like we promised you income, we promised them income as well. We promised them income, and they're not getting it."

Williams asked those present to help sell advertising on the machines and to recruit friends and family members to help sell ads. "This is not just my company," he said. "I shouldn't have to make all the decisions. I shouldn't have to do all the work. After all, we're paying you. When your company needs help, you help your company."

One participant asked Williams if the absence of advertising on those 250 or so ATMs meant their mortgages would stop being paid. Williams replied that $2.4 million of revenue per month was paying their mortgages but didn't identify the source of that revenue.

Williams told the group he had called the meeting to ask them for two things: "Just a little more time, that's the first thing," he said. "And a little more patience, that's the second thing. But most of all, I'm going to need your cooperation in helping us get this operation off the ground."