Three convicted in mortgage-fraud scheme

February 18, 2011|By Jamie Smith Hopkins, The Baltimore Sun

A federal jury in Greenbelt convicted an Anne Arundel County woman and two men in connection with a $78 million mortgage scam that targeted homeowners and buyers, the U.S. attorney's office in Maryland announced Friday.

Alvita Karen Gunn, 33, of Hanover; Isaac Jerome Smith, 48, of Virginia; and Michael Anthony Hickson, 48, of New York were found guilty of fraud conspiracy, wire fraud and conspiracy to commit money laundering for their participation in the scheme while working for Metro Dream Homes. Two others previously pleaded guilty.

Metro Dream Homes officials convinced more than 1,000 people to invest at least $50,000 apiece by refinancing their homes or buying properties at inflated prices. The company promised to invest the money in "profitable businesses" and repay the mortgages over several years, the U.S. attorney's office said. But the side investments never made much money.

Company officials, who started the scheme in 2005 as home prices skyrocketed and loans were easy to come by, paid some early investors' mortgages with later investors' money. Large amounts of money flowed directly to key Metro Dream Homes employees, who took large salaries and enjoyed perks such as a luxury-car fleet driven by chauffeurs, according to prosecutors.

When the mortgages were not paid off as promised, homeowners were left in the lurch, according to U.S. attorney's office. Most of the victims were from Prince George's County.

jamie.smith.hopkins@baltsun.com

Twitter.com/realestatewonk

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