BALTIMORE — More than 1,000 people were defrauded out of about $70 million by a group advertising the dream of home ownership in what turned out to be a nightmare Ponzi scheme, federal and Maryland officials said Monday.
Five officers of Metro Dream Homes of Laurel, Md., including the company's founder, who lives in Hollywood, Fla., are accused of tricking homeowners into pouring money into the business with the promise that the revenue would be used to pay off their mortgages. The scheme ran from 2005 until October 2007, authorities said.
The indictment names company founder Andrew Hamilton Williams Jr., 58; financial officer Michael Anthony Hickson, 46, of Commack, N.Y.; president Isaac Jerome Smith, 46, of Spotsylvania, Va.; and vice president Alvita Karen Gunn, 31, of Hanover, Md. They had 48 hours to turn themselves in.
Gunn had an initial appearance Monday afternoon in U.S. District Court in Greenbelt, Md. Her attorney, Elita C. Amato, did not immediately return a call seeking comment. Other attorneys in the case also could not be reached for comment.
Prosecutors say the company marketed the mortgage program in seminars at luxury hotels in Maryland, Washington and Beverly Hills, Calif. An investor had to put up a minimum of $50,000 for each home. The company was then supposed to pay off their mortgages in five to seven years.
Investors were told they were investing in ATMs, television advertising and calling card kiosks that would raise money for the mortgage payments.
But prosecutors say those businesses never made any money. Instead, prosecutors say, the investments were used to pay company salaries of up to $200,000 and maintain a fleet of luxury cars and a staff of 10 chauffeurs.