The article about a federal mortgage fraud investigation misstated the charge against one of the defendants. Carole Nelson was charged with money laundering, not wire fraud.
Five Charged in Federal Mortgage Fraud Probe
Tuesday, April 28, 2009
It was a mortgage fraud and a Ponzi scheme, and it was, prosecutors say, a moneymaker.
In just a couple of years, the Dream Homes Program stole at least $70 million from more than 1,000 people, many of them in Prince George's County, by promising to pay off their mortgages in exchange for investments of at least $50,000, prosecutors said.
After the operators were shut down by the Maryland attorney general in 2007, federal officials began investigating Metro Dream Homes. Yesterday, the Justice Department announced that the company's owner and four other people have been charged with participating in a massive fraud.
Instead of investing customers' money in ATMs, telephone card kiosks and other business ventures, the defendants used some of the millions coming in from new investors to make mortgage payments for earlier ones, prosecutors said.
Millions more went to finance a life of indulgence for the defendants, the Justice Department said, including annual salaries of as much as $200,000, a fleet of chauffeured luxury cars and tickets to the 2007 Super Bowl and the NBA All-Star Game.
Charged in the case are Andrew Hamilton Williams Jr., 58, of Hollywood, Fla., who was the founder and owner of Metro Dream Homes; Michael Anthony Hickson, 46, of Commack, N.Y., chief financial officer; Isaac Jerome Smith, 46, of Conyers, Ga., president; Alvita Karen Gunn, 31, of Hanover, vice president of operations; and Carole Nelson, 50, of the District, chief financial officer of a related company.
All of the defendants but Nelson were charged in an indictment unsealed yesterday, accusing them of conspiracy, wire fraud, conspiracy to commit money laundering and other offenses. Nelson, who is accused of wire fraud, was charged in a criminal information, a court document that can be filed only with the defendant's consent, typically as part of a plea agreement.
The U.S. attorney's office for Maryland said it could not provide names of attorneys for the five defendants, and efforts to contact the defendants by telephone were unsuccessful.
The charges, announced yesterday by Assistant Attorney General Lanny A. Breuer and U.S. Attorney Rod J. Rosenstein, mark another major mortgage fraud prosecution in Maryland, among the states hardest hit by scams exploiting the troubled real estate market.
In his first news conference as the head of the criminal division, Breuer said the case was an indicator of the Justice Department's determination to go after the criminals who have tried to profit from mortgage fraud.
Enticed by the prospect of buying a home or paying off a mortgage, hundreds of people flocked to Dream Homes information sessions held in hotels in the District, Maryland and even Beverly Hills, Calif. Articles in The Washington Post in 2007 described elements of the scheme. The Maryland securities commissioner issued a cease-and-desist order later that year.
Dream Homes promised to take over the mortgage payments of any homeowner who made an investment of at least $50,000 and to see that the note was paid off in five to seven years. At the end, the promoters said, ownership would be shared by the original homeowner and Metro Dream Homes.