Owner and Founder of Metro Dream Homes Sentenced to 150 Years in Prison in $78 Million Mortgage Fraud Scheme

Conspirators Spent Millions of Investor Funds for Their Own Purposes, Including to Employ Chauffeurs and Maintain a Fleet of Luxury Cars, Travel in Luxury to the NFL Super Bowl and NBA All-Star Game

GREENBELT, MD—U.S. District Judge Roger W. Titus sentenced Andrew Hamilton Williams, Jr., age 61, of Hollywood, Florida, today to 150 years in prison followed by three years of supervised release for his participation in a massive mortgage fraud scheme which promised to pay off homeowners’ mortgages on their “dream homes,” but left them to fend for themselves. On November 10, 2011, a federal jury convicted Williams on charges of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office; Maryland Attorney General Douglas F. Gansler; and Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation.

“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 U.S Attorney Rod J. Rosenstein. “Coordinated law enforcement is helping to hold the perpetrators accountable, but the real solution is meaningful oversight and auditing of lending decisions.”

“These individuals were responsible for shattering the dreams of countless hard working families during one of our country’s worst economic downturns,” said FBI Special Agent in Charge Richard A. McFeely. “The teamwork exhibited by all participating agencies throughout the joint investigation was exemplary.”

“Mortgage fraud is every bit as corrosive to American society as any street crime,” stated Eric Hylton, Special Agent in Charge, IRS-Criminal Investigation, Washington D.C. 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.”

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. MDH used a third-party company to pay investors to advertise the Dream Homes Program to friends and family. MDH encouraged homeowners to refinance existing mortgages on their homes in order to withdraw equity and generate the funds necessary to enroll their homes in the Dream Homes Program.

On August 15, 2007, the Maryland Securities Commissioner issued a cease-and-desist order to MDH and other related companies directing them to immediately cease the offering and sale of unregistered securities in connection with their promotion of the Dream Homes Program. However, Williams thereafter called meetings in which investors were told that MDH was earning up to $10 million in one month and that the company’s legal difficulties were the result of either misunderstandings or racial animus against company leaders. In October 2007, the Circuit Court for Prince George’s County, Maryland granted the commissioner’s motion to freeze MDH assets and appointed a receiver.

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 Anthony Hickson, age 49, of Commack, New York, the chief financial officer of MDH; Isaac Jerome Smith, age 49, of Spotsylvania, Virginia, the president of MDH; and Alvita Karen Gunn, age 34, of Hanover, Maryland, vice president of operations, were 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 also convicted of making a false statement in a federal court proceeding. Judge Titus sentenced Hickson to 120 months in prison, Smith to 70 months in prison, and Gunn to 60 months in prison.

Carole Nelson, age 53, of Washington, D.C., the chief financial officer of POS Dream Homes, previously pleaded guilty to money laundering, and Charlotte Melissa Josephine Hardmon, age 42, of Bowie, Maryland, pleaded guilty to conspiracy to commit wire fraud in connection with their participation in this scheme. Their sentencing dates are pending.

This prosecution is being brought jointly by the Maryland and Washington, D.C. Mortgage Fraud Task Forces, which are comprised of federal, state, and local law enforcement agencies in Maryland, Washington, D.C., and Northern Virginia. The task forces were formed to promote the early detection, identification, prevention, and prosecution of various kinds of mortgage fraud schemes. This case, as well as other cases brought by members of the task forces, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and help to ensure the integrity of the mortgage market and other credit markets. Information about mortgage fraud prosecutions is available on the Internet at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein praised the FBI, the IRS-Criminal Investigation, the Maryland Attorney General’s Office-Securities Division, and the Federal Deposit Insurance Corporation-Office of Inspector General for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorney Christen A. Sproule, who prosecuted the case.

Agents confiscate thousands of counterfeit goods at NBA All-Star Weekend

ORLANDO, Fla. — More than 2,500 counterfeit items were confiscated as the result of a joint operation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Orlando Police Department and the Orange County Sheriff's Office during the 2012 NBA All-Star Weekend in Orlando.

"Counterfeiters prey on sports fans at events like the NBA All-Star Game," said Susan McCormick, special agent in charge of HSI in Tampa, Fla. "I urge buyers to beware. Counterfeiting is not a harmless crime. Counterfeiting costs U.S. businesses more than $200 billion each year and accounts for the loss of more than 750,000 American jobs."

During the days leading up to the NBA All-Star Game, HSI agents operated in teams throughout the Orlando-area, targeting suspicious activity that might lead them to counterfeiters. HSI agents seized counterfeit items including t-shirts, caps and jerseys. The items are valued at more than $69,000. Ten individuals were arrested for possessing or offering to sell counterfeit NBA merchandise in violation of Florida state law.

"The NBA is committed year-round to protecting both our fans and legitimate, tax-paying retailers from being victimized by counterfeiters seeking to profit illegally from the public's enthusiasm for the NBA," said Ayala Deutsch, senior vice president and chief intellectual property counsel for the NBA. "We greatly appreciate the tireless efforts of HSI, the Orlando Police Department and the Orange County Sheriff's Office throughout All-Star Weekend and are pleased to have their support in working to address this important issue."

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling, and distributing counterfeit products. HSI investigations focus not only on keeping counterfeit products off U.S. streets, but also on dismantling the criminal organizations behind this activity.

To report or learn more about intellectual property theft, visit IPRcenter.gov.

ICE announces results of 'Operation Strike Out'

Massive sports memorabilia bootlegging: just another day on the job for American police officers! Get the latest and best police news as it happens!

WASHINGTON - With the conclusion of Major League Baseball's 2011 World Series, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the National Intellectual Property Rights Coordination Center (IPR Center) have announced the results of "Operation Strike Out." This one-month operation, which commenced at the beginning of the American League and National League Championship Series, has resulted in the seizure of 58 commercial websites that sold and distributed counterfeit sports paraphernalia. HSI special agents have also seized 5,347 items with a manufacturer's suggested retail price (MSRP) of $134,862.

"HSI and the IPR Center have made a major dent in these criminals' plans to profit from fan enthusiasm surrounding a very exciting seven-game World Series - both in U.S. cities and in cyberspace," said ICE Director John Morton. "Counterfeits products represent a triple threat by delivering shoddy and sometimes dangerous goods into commerce, by funding organized criminal activities, and by denying Americans good-paying jobs. Homeland Security Investigations and our partners at the IPR Center will continue to work together to keep all types of counterfeit products off our streets."

Website seizures

The seizure of the 58 domain names is the seventh phase of "Operation In Our Sites," a sustained law enforcement initiative to protect consumers by targeting counterfeiting and piracy over the Internet. In June 2010, the IPR Center began "Operation In Our Sites." Since the launch of this operation in June 2010, the IPR Center has seized a total of 200 domain names and redirected those domain names to a seizure banner.

Previous website seizures include:

•First phase: 10 domain names

•Second phase: 82 domain names
•Third phase: 10 domain names
•Fourth phase: 18 domain names
•Fifth phase: 5 domain names
•Sixth phase: 17 domain names

The 58 domain names seized in this phase of "Operation In Our Sites," were all commercial websites engaged in illegally selling and distributing counterfeit sports paraphernalia. During the course of the operation, federal law enforcement agents made undercover purchases of sport jerseys from online retailers suspected of selling counterfeit goods.

Once the materials were confirmed to be counterfeit or otherwise illegal, ICE HSI special agents obtained seizure orders from federal magistrate judges for the domain names of the websites that sold or distributed the items. In most instances, the counterfeit goods were shipped directly into the United States from suppliers in other countries using international express mail. The 58 websites have all been shut down and now show a banner stating that the domain name of that website has been seized by federal authorities. The seizure banner on the seized sites has received nearly 75 million individual views.

The seized counterfeit items infringed on the copyrights or trademarks owned by: Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League.

Eighty-six of the 200 domain names seized have now been forfeited to the United States government. Through the forfeiture process, individuals who have an interest in the seized domain names are provided a period of time after the "Notice of Seizure" to file a petition with a federal court and additional time after the "Notice of Forfeiture" to contest the forfeiture. If no petitions or claims are filed, the domain names become property of the U.S. government.

In April 2011, the IPR Center launched a public service announcement (PSA) that appears on each of the 86 forfeited domain names. This video has received nearly 200,000 individual views on ICE's YouTube page, educating the public about the economic impact of trademark counterfeiting and copyright infringement. The PSA helps deter future crimes and raises awareness.

The "Operation In Our Sites" portion of "Operation Strike Out" was spearheaded by the National Intellectual Property Rights Coordination Center (IPR Center); as well as HSI offices in Baltimore; Denver; Detroit; El Paso, Texas; Houston; Seattle; St. Paul, Minn.; and in coordination with the following U.S. Attorneys' Offices: Southern District of Texas, District of Colorado, Eastern District of Michigan, Western District of Washington, Western District of Texas, District of Minnesota and District of Maryland.

Last week, "Operation In Our Sites" received recognition by the International Association of Chiefs of Police (IACP). The IPR Center received an IACP Award for Excellence in Criminal Investigation for its work in targeting counterfeiting and piracy on the Internet. The award recognizes quality achievement and innovation in managing and conducting criminal investigations with the goal of sharing information to advance the art and science of criminal investigations.

'Hard goods' seizures

ICE HSI special agents operated in multiple teams to identify stores and vendors selling counterfeit trademarked items. These teams - operating in Dallas; Detroit; Milwaukee, Wis.; and St. Louis - have seized 5,347 items of phony World Series-related memorabilia along with other counterfeit Major League Baseball and sports related items to date totaling $134,862. Ball caps, t-shirts, jackets, tickets and other souvenirs are among the counterfeit merchandise and clothing confiscated. Three individuals were also arrested on federal and state counterfeiting violations.

The breakdown of seized items include:

•Dallas: 270 items with an MSRP of $6,934

•Detroit: 913 items with an MSRP of $16,120
•Milwaukee: 106 items with an MSRP of $3,180
•St. Louis: 4,058 items with an MSRP of $108,628

IPR Center

The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

Website operator indicted for illegally streaming copyrighted sporting events

Get the latest and best law enforcement news!

Site was seized during third phase of "Operation In Our Sites"

NEW YORK — The operator of a website that allegedly streamed live, copyrighted sporting events on the Internet illegally was indicted on Oct. 22, 2011, for criminal infringement of a copyright.

Bryan McCarthy, 32, of Deer Park, Texas, is charged with one count of conspiracy to commit criminal copyright infringement and one substantive count of criminal infringement of copyright. The case is being investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigation (HSI).

"McCarthy will now have to answer for allegedly stealing a product that never belonged to him. He knew and should have known the events being broadcast were copyright-protected," said James T. Hayes, Jr., special agent in charge of HSI in New York. "American business is threatened by those who pirate copyrighted material. We will continue to target those who steal the ideas of legitimate and creative businesses."

According to the indictment, between 2005 and Jan. 31, 2011, McCarthy operated channelsurfing.net and provided links on that website to various live streams of copyright-protected sporting event telecasts without authorization, such as a telecast of a basketball game that was protected by a copyright held by the National Basketball Association (NBA).

On Feb. 1, 2011, HSI agents seized channelsurfing.net, as part of an ongoing ICE HSI investigation into websites that illegally streamed copyrighted sporting telecasts and pay-per-view events. The investigation into McCarthy revealed that he made more than $90,000 in profits from online merchants who paid him to advertise on the website. Since the seizure, the website has been redirected to a seizure banner, which has received more than 1.3 million hits. The seizure banner notifies website visitors that a federal court order has been issued for the domain name and explains that willful copyright is a federal crime.

According to the seizure affidavit, channelsurfing.net was an online portal to pirated telecasts of sporting events of the National Football League, the NBA, the National Hockey League, World Wrestling Entertainment, and the Ultimate Fighting Championship. All of these organizations hold the copyrights to the televised broadcasts of their respective sporting events.

Visitors to channelsurfing.net would simply click on one of a number of links to begin the process of downloading or streaming an illegal broadcast of a sporting event. The website contained links to various live television channels as well.

McCarthy registered the channelsurfing.net domain name in December 2005 and operated the website out of his home in Texas until the time of its seizure. At the time it was seized, channelsurfing.net was one of the most popular websites that streamed illegal content.

If convicted on the charges in the indictment, McCarthy faces a maximum of five years in prison. This case is being handled by the Southern District of New York's Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The National Intellectual Property Rights Coordination Center (IPR Center) is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

To report IP theft or to learn more about the IPR Center, visit IPRCenter.gov.

Secretary Napolitano Announces "If You See Something, Say Something™" Campaign Partnership with NBA

Washington, D.C. - Secretary of Homeland Security Janet Napolitano today joined National Basketball Association (NBA) Commissioner David Stern to announce a new partnership between the Department of Homeland Security's (DHS) "If You See Something, Say Something™" public awareness campaign and the NBA—an effort that will help ensure the security of fans, players and employees by encouraging fans to identify and report suspicious activity.

"Every citizen plays a critical role in identifying and reporting suspicious activities and threats," said Secretary Napolitano. "Our partnership with the NBA to bring the "If You See Something, Say Something™" campaign to professional basketball events throughout the nation is a vital part of our efforts to ensure the safety of players, employees and fans."

The "If You See Something, Say Something™" campaign—originally implemented by New York City's Metropolitan Transportation Authority and now licensed to DHS for a nationwide campaign—is a simple and effective program to engage the public and key frontline employees to identify and report indicators of terrorism, crime and other threats to the proper transportation and law enforcement authorities.

The "If You See Something, Say Something™" campaign partnership with the NBA will "tip-off" during the NBA's "Jam Session" events and NBA All Star Game this coming weekend in Los Angeles, with the "If You See Something, Say Something™" message appearing on TV monitors and other print materials around the arenas. During today's announcement, Secretary Napolitano and Commissioner Stern also applauded the critical efforts of the City of Los Angeles—including Mayor Antonio Villaraigosa, the Los Angeles Police Department and iWatch campaign in providing robust security at this weekend's events.

Over the past six months, DHS has worked with its federal, state, local and private sector partners, as well as the Department of Justice, to expand the "If You See Something, Say Something™" campaign as well as the Nationwide Suspicious Activity Reporting (SAR) Initiative—an administration effort to train state and local law enforcement to recognize behaviors and indicators related to terrorism, crime and other threats; standardize how those observations are documented and analyzed; and expand and enhance the sharing of those reports with the Federal Bureau of Investigation and DHS—to communities throughout the country.

The "If You See Something, Say Something™" campaign has recently been launched with the National Football League (NFL), as well as in Minnesota and New Jersey, more than 9,000 federal buildings nationwide, Walmart, Mall of America, the American Hotel & Lodging Association, Amtrak, the Washington Metroplitan Area Transit Authority, the general aviation industry, and state and local fusion centers across the country.

In the coming months, DHS will continue to expand the "If You See Something, Say Something™" campaign nationally with public education materials and outreach tools designed to help America's business, communities and citizens remain vigilant and plan an active role in keeping the country safe.

This article was sponsored by Police Leadership Books.