A federal jury has convicted Andrew Hamilton Williams, Jr., age 60, of Hollywood, Florida of fraud conspiracy, wire fraud and conspiracy to commit money laundering in connection with a massive mortgage fraud scheme which promised to pay off homeowners’ mortgages on their “Dream Homes,” but left them to fend for themselves.
“Metro Dream Homes was an egregious fraud scheme, and an excellent example of the principle that financial schemes that sound too good to be true are usually scams,” said Maryland U.S. Attorney Rod J. Rosenstein.
“This case shows that the appearance of success can be a mask for a tangled financial web of lies,” said IRS Special Agent in Charge Jeannine Hammett. “Ponzi schemes can thrive for a time on false claims about how the money is being invested and where the returns are coming from. But that time is gone, and as this verdict shows, it's time for those responsible to face judgment.”
According to evidence presented at the two-week trial, beginning in 2005, Williams and his conspirators targeted homeowners and home purchasers to participate in a purported mortgage payment program called the “Dream Homes Program.”
In exchange for a minimum of $50,000 initial investment and an “administrative fee” of up to $5,000, the conspirators promised to make the homeowners’ future monthly mortgage payments, and pay off the homeowners’ mortgage within five to seven years.
Dream Homes Program representatives explained to investors that the homeowners’ initial investments would be used to fund investments in automated teller machines (ATMs), flat screen televisions that would show paid business advertisements, and electronic kiosks that sold goods and services.
To give investors the impression that the Dream Homes Program was very successful, Metro Dream Homes spent hundreds of thousands of dollars making presentations at luxury hotels such as the Washington Plaza Hotel in Washington, D.C., the Marriott Marquis Hotel in New York, New York, and the Regent Beverly Wilshire Hotel in Beverly Hills, California. Metro Dream Homes had offices in Maryland, the District of Columbia, Virginia, North Carolina, New York, Delaware, Florida, Georgia and California.
According to trial testimony, Williams and his co-conspirators failed to advise investors that the ATMs, flat-screen televisions and kiosks never generated any meaningful revenue. The defendants used the funds from later investors to pay the mortgages of earlier investors.
Evidence showed that MDH had not filed any federal income tax returns throughout its existence. The defendants also failed to advise investors that their investments were being used for the personal enrichment of select MDH employees, including Williams, to:
- pay salaries of up to $200,000 a year as well as their mortgages;
- employ a staff of chauffeurs and maintain a fleet of luxury cars; and
- travel to and attend the 2007 National Basketball Association All-Star game and the 2007 National Football League Super Bowl, staying in luxury accommodations in both instances.
Nor were investors told that investor funds were used to:
- pay off investors in a prior failed ATM investment venture called Bankcard Group;
- make multiple donations of up to $50,000 each to charitable organizations to give MDH the appearance of being financially successful; and
- transfer millions of dollars in investor funds to third-party businesses for purposes not disclosed to investors.
Trial testimony showed that Williams and his co-conspirators arranged for early Dream Homes Program investors, whose monthly mortgage payments had been paid by MDH using the funds of later Dream Homes Program investors, to attend recruitment meetings to assure potential investors that the Dream Homes Program was not a fraud.