The owner and founder of Metro Dream Homes has to serve 150 years in prison for his role in leading a $78 million mortgage fraud scheme.
Through the fraudulent scam, Andrew Williams, Jr. promised to pay off homeowners’ mortgages on their “dream homes,” but never fulfilled his guarantees. Last November, Williams was convicted of wire fraud and conspiracy to commit money laundering.
According to evidence presented during the defendant’s trial, Williams and co-conspirators targeted homeowners and prospective buyers to participate in their fraudulent scam beginning in 2005. In exchange for a minimum initial investment of $50,000 and an “administrative fee” of up to $5,000, the Dream Homes Program promised to make the homeowners’ future monthly mortgage payments and pay off the entire mortgage within five to seven years.
Representatives of the program told investors their investments would be used to fund money into automated teller machines, flat screen televisions that would show paid business advertisements and electronic kiosks that sold goods and services.
To show investors that the program was a success, Metro Dream Homes made presentations at luxury hotels in Washington, New York and Los Angeles.
However, the conspirators never advised the investors that the program never generated any meaningful revenue. The conspirators used funds from investors to pay the mortgages of investors that participated in this scam since it began.
Additionally, the conspirators failed to tell investors that their investments were being used for the personal enrichment of MDH employees. Williams used the money to pay for MDH salaries as high as $200,000 a year as well as employees’ mortgages, hire chauffeurs to drive luxury cars used by the defendants, travel accommodations to the 2007 Super Bowl and National Basketball Association All-Star Game and pay off investors in a failed investment Ponzi scheme.
“This case exemplifies the egregious mortgage fraud schemes that flourished in the lending free-for-all that contributed to the bubble and collapse of the housing market,” said Rod Rosenstein, U.S Attorney for the District of Maryland. “Coordinated law enforcement is helping to hold the perpetrators accountable, but the real solution is meaningful oversight and auditing of lending decisions.”
As a result of the scheme, more than 1,000 investors in the Dream Homes Program invested approximately $78 million. When Williams and his co-conspirators stopped making the mortgage payments, the homeowners were left to attempt to make the mortgage payments MDH had promised to make in full.
Michael Hickson, the chief financial officer of MDH; Isaac Smith, the president of MDH; and Alvita Gunn, vice president of operations, were already convicted by a federal jury of fraud conspiracy, wire fraud, and conspiracy to commit money laundering in connection with their participation in the mortgage fraud scheme. Hickson was sentenced a prison term of 10 years, while Smith has to serve 70 months in prison and Gunn has to spend five years in jail.
“Mortgage fraud is every bit as corrosive to American society as any street crime,” stated Eric Hylton, special agent in charge of the Internal Revenue Service’s Criminal Investigation Washington DC field office. “This type of fraud has far-reaching economic consequences and severely thwarts recovery from the foreclosure crisis, leaving homeowners in dire financial situations and financial institutions with uncollectible loans.”
