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Feds Charge Metro Dream Homes Officers

"What ever happened to Andy Williams and Metro Dream Homes?" I've heard that question countless times from former participants since Maryland authorities shut the operation down in August, 2007. That shutdown came only days after the second of two columns I wrote questioning how the organization could pay off participants' home mortgages in seven years or less, as promoters promised. The program was marketed mostly by word of mouth, through families, church members and other people in a position of trust, and many participants were left with mortgages they could not afford.

Though Dream Homes operated in several states, it was particularly active near its D.C.-area base, with many participants in Prince George's County, the District and Fredericksburg.

Now we know what happened to Andy Williams. As Henri Cauvin reports for The Post, Williams and three other top Dream Homes participants have been indicted by a federal grand jury in the alleged mortgage fraud scheme, which the Justice Department says was worth $70 million.

According to a Justice Department announcement, charges have been filed against the following officers of Metro Dream Homes:

  • Andrew Hamilton Williams Jr., 58, of Hollywood, Fla., founder and owner.

  • Michael Anthony Hickson, 46, of Commack, NY, chief financial officer.

  • Isaac Jerome Smith, 46, of Spotsylvania, president.

  • Alvita Karen Gunn, 31, of Hanover, Md., vice president of operations.

All four face maximum sentences of 20 years in prison on charges of fraud conspiracy; 20 years on each of 15 counts of wire fraud, and 20 years on charges of conspiracy to commit money laundering. Hickson also faces a maximum sentence of five years for making false statements. Smith also faces a maximum sentence of 30 years for bank fraud, which the Justice Department said arose from alleged misrepresentation of his income to get a bank loan to buy a new car -- a Bentley.

The announcement also said "information has been filed" on a fifth alleged participant, Carole Nelson, 50, of the District, chief financial officer of POS Dream Homes, one of the many business names the organization used. Another commonly used name was Metropolitan Grapevine.

The announcement said the operation ran from 2005 to 2007, and worked this way:

"To participate, an investor had to provide a minimum of $50,000 for each home enrolled in the program, in addition to an 'administrative fee' of up to $5,000. In exchange, the program promised to make the homeowner's future monthly mortgage payments, and pay off the homeowner's mortgage within five to seven years. Thereafter, the homeowner and MDH would own an equal interest in the home.

"...The indictment further alleges that Dream Homes Program representatives explained to investors that the homeowners' initial payments would be used to fund investments in automated teller machines, flat-screen televisions that would show paid business advertisements, and 'Touch-N-Buy' electronic kiosks that sold telephone calling cards and other items. The defendants allegedly told some of the investors that they should not worry about the price of the homes or monthly mortgage payments because MDH would make mortgage payments on their behalf."

After I wrote the columns, I heard from many insiders telling tales of big spending by officers. The Justice Department announcement touches on that point as well. It says the defendants allegedly failed to advise investors that their investments were being used for the personal enrichment of select employees, including the defendants, to pay salaries of up to $200,000 a year as well as their mortgages;keep a staff of 10 chauffeurs and a fleet of luxury cars, and to stay in luxury accommodations when attending the NBA All-Star game and the Super Bowl in 2007.

Charges are not convictions, of course. But that doesn't mean lessons can't be learned from the Dream Homes saga: Don't get drawn into anything that promises an unusually big payoff, no matter how much you trust the person making the pitch.

By Elizabeth Razzi  |  April 28, 2009; 6:00 AM ET
Categories:  Foreclosure , Mortgages  
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