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Entries in metro dream homes (1)

Tuesday
Jun282011

Pair Sentenced to Prison in $78 Million Ponzi Scheme

Two individuals were sentenced Monday for their role in a Ponzi Scheme promising to help homeowners pay off their mortgages.  Isaac Jerome Smith, 48, and Alvita Karen Gunn, 33, received sentences of six years and five years, respectively, along with orders to pay restitution to the nearly 1,000 investors that were defrauded.  The two were convicted earlier this year, along with a third co-defendant, Michael Anthony Hickson, who is due to be sentenced on July 1st.  Hickson was convicted of the same charges as Smith and Gunn, and was also convicted of perjury, which adds a potential five years to his sentencing recommendation.

The three operated Metro Dream Homes, which promised investors with a minimum $50,000 investment that the company would invest in ATMs, phone card kiosks, and flat-screen televisions displaying advertising at businesses.  These ventures would supposedly pay off the investors' mortgages in a short period of five to seven years.  

Unlike the typical Ponzi Scheme, in which investors received periodic interest payments, Metro Dream Homes promised to take over homeowners' monthly mortgage payments and pay off the mortgage within five to seven years.  The company went to great lengths to attract investors, including conducting elaborate presentations at luxury hotels in Washington, D.C., New York, and Beverly Hills.  More than 1,000 investors were found to have invested approximately $78 million in the scheme.  Thus far, two other individuals have been convicted of crimes relating to their role in the scheme, and currently await sentencing.