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The family that I know who's in the program also didn't have their September'07 mortgage paid. They had to go into their own funds to pay their own mortgage in order to keep their credit straight. They said that this was very inconvenient to them because they had to pay more than what they used to pay before getting into the program.
"Inconvenient"??? I take it they are still in denial about what is going on??? If they think one month of higher payments is "inconvenient", ask them what they think the next *thirty years* is going to be like! That's 360 payments of higher interest!!!
That is what I was talking about in the scam.com thread when naledge4ya tried to minimize the significance of losing a few dollars (sounds a lot like someone else in this thread who asked what was the difference between losing money to an incompetent investment manager and a dishonest one). It may only be $50,000 or so, but the victims will be paying many times that amount over the years as they pay on the higher mortgages they are now encumbered with.
It is all in the numbers if you bother to look at them. In this case the numbers are so horrific, that I don't see any way for Williams to escape jail time unless he dies of remorse and I really don't think that is going to happen!
This is some great info that you provided for us. I'm glad that I found this site to keep me up to date on whats going on because I also had problems with scam.com.
The family that I know who's in the program also didn't have their September'07 mortgage paid. They had to go into their own funds to pay their own mortgage in order to keep their credit straight. They said that this was very inconvenient to them because they had to pay more than what they used to pay before getting into the program.
imalert, great to have you on-board! Keep us abreast of the situation w/this particular family. Every bit of input is needed to stop this madman!
BTW, there are 950 souls on this sinking ship. What affects the 950 souls will reverberate tragically through communities, businesses, and affect iinterest rates. This is a complete mess! Also, let's keep all the families affected by Hurricane Andy and Joy in prayer.
I will take your suggestion and read the court transcript, thanks for the link. I also agree with your idea that MDH 's response to the AG's order is only making things worse for themselves and all thier investors.......it's a joke. As for some of your other comments, I think you are missing the point........it really doesn't matter what you call it........if the AG had really prioritized the matter and taken STRONG action, MDH would already be shut down and assets siezed.....everyday that passes by means greater loss to the 'victims'. Mortgages are already going unpaid. I believe in due process, but the odds of ALL the assets being dispersed is too great to permit the operation to continue at any level.
Sagegriot, the middle of August was when the MD AG took action. At this point, the case was pretty nascent. I am not a lawyer, but to shutdown an operation without "due process or performing due dilligence" and/or giving the defendant time to respond would be premature. Also, the MD AG (with other things on his plate) will have to do his on investigation. Remember, the MD AG is also a political position; therefore, the AG would want to dot the Is and cross the Ts before taking definitive action. Keep in mind, b/c of the housing crisis a lot of people are probably looking at this case and how the AG responds. I would not be surprised if some political leaders are also following this case.
In regards to the semantics of SCANDAL (to disgrace) vs SCAM (to swindle). We can agree that Andy has disgraced himself, and swindled a bunch of folks, which he will serve plenty of jail time!
Hello there Ralphmalph, Glad to see you all once more. I got a really good question for you. I have some really close friends of mine who still think that they can ride this wave out. They have refinanced their homes and bought homes in this miserable program and they still think that things are going to work themselves out. My question is....If a person refinanced their home and used their own refinance company, but yet, rolled their homes in the program, can they still face criminal charges? Some seem to think that all they have to do is get their fifty grand back and everything will be fine. What do you think?
I don't think they can face criminal charges for re-financing and giving some of their equity away. On home purchases, it may be a different story though.
Several interesting excerpts from the response (Removal of Temporary Restraining Order) by the Plantiff's (POS Dream Homes, LLC) vs the Defendant (Securities Commissioner of Maryland):
First Excerpt:
"On September 6, 2007, Plaintiff Williams was deposed pursuant to the August 15 Summary Order by the State’s attorneys. They were informed in advance by Plaintiff’s counsel that the outstanding criminal investigation underway by the United States Attorney would require Williams to invoke the Fifth Amendment right to silence at the deposition. The State’s attorneys insisted on taking the deposition for the purpose of drawing an adverse inference from Williams’ invocation of the Fifth Amendment. Williams’ counsel protested at the outset of the deposition that the State’s attorneys were manipulating or exploiting the criminal investigation to gain an advantage in their administrative proceeding. That motive was transparent because in light of the Summary Order there was no need to proceed further until after the criminal investigation had concluded. Plaintiffs were already foreclosed from offering or selling their programs in
Maryland. " Criminal charges: Does the US Attorney know something that we don't know? Maybe there is a lot more to this story than what meets the eye. One thing I do know, Andy will be doing jail time!
Second Excerpt:
"Defendant argues that Plaintiffs should mitigate their irreparable injury by accelerating a hearing with a criminal investigation hanging over them like a Sword of Damocles. Defendant knows that Plaintiff Williams was required to invoke the Fifth Amendment in his deposition on September 6. Further, Defendant knows that Respondents are being pursued by four jurisdictions simultaneously, which makes their ability to call for a hearing on the merits immediately problematic. A hearing has been requested for September 19, 2007. A four-front war necessarily depletes Plaintiffs resources and time in fighting on one front. In any event, a speedy hearing after the Summary Order does not disprove irreparable injury but only the magnitude of irreparable injury."
The money is gone! Where is the money generated from the other businesses (i.e., POS Cafe, CIP, HelloWorld, etc..) ? Is their sole operation (POS Dream Homes, LLC): robbing from Peter to pay Paul. It is a rhetorical question!
Third Excerpt:
"First, a summary order to cease and desist was to be issued by Defendant to cripple Plaintiffs by drying up their cash flow. No business can operate for long without a continuing revenue stream—even Google. Second, the agencies correctly expected that the adverse publicity associated with their actions and investigations would frighten away would-be participants in Plaintiffs’ endeavors and cause current participants to withdraw."
Comparing Google to MDH is an insult to Google. The only way MDH SCAM can continue to operate is to recruit additional VICTIMS! I pay your mortgage with money from another VICTIM'S equity/money.
Fourth Excerpt:
"The war was provoked by critical and biased newspaper articles in various newspapers, including The Washington Post. See Exhibit 1."
Interestingly, they printed off every newspaper article they could Google on the Internet (their lawyers scare me :-)). Also, they printed of some of the comments of bloggers. It is a wonder they did not print off info from ScamDotCom; or maybe there is a correlation, that is why the Website is down. Ummm... Something to think about.
Also, "The war" comment sounds like something from Jim Jones and David Koresh. Weird... Us against the world.
I just got back from the hearing in the US District Court. In one way it was sad (as you can see the folks who might not be as well informed as they should be, giving support), but on the other hand, this will come to an end soon.
I’ll start from the end and work my way back. The judge (who was hoarse) said he did not want to give a verbal ruling (on the motion to dissolve the C&D), but because it could be precedent setting, he wanted to supply a written ruling (which he said he would have “as soon as humanly possible”). When MDH lawyer said he wanted to enter one more piece of evidence by COB tomorrow, then the judge said the ruling might not be out until early next week.
However, based on the judge’s summary, the C&D will stay. There is another hearing scheduled for September 19, and this is to determine if the C&D will become permanent. More on the judge’s summary to follow.
MDH Lawyer contends that the process was unconstitutional and brought up Michael Hickson (CFO) as the first witness. The judge described his interpretation of the “program” and asked Mr. Hickson, how the company can turn $75K into $750K (Principal, plus interest to pay off a $500K Home in seven years). Mr. Hickson said the company had a seven point revenue stream program. He explained five of them (Model Homes, Executive Leasing, Property Management, New Building Construction (Condos), and the 50% equity split once a home is paid off (MDH gets 50% of the equity). Furthermore, Mr. Hickson stated that MDH has NEVER missed a mortgage payment (talk about big time perjury, “NEVER missed a mortgage payment”) under oath and being video taped. Give me a break.
Under cross examination the AG asked MH How many executive leases they have, how many model homes they had, etc. The long and the short…none “we’re working on it”. It, was a joke. The AG didn’t even bother with additional questions about this. Then, the AG asked about the Digital Adv. BillBoards and the POS Café. How many and what revenue do they bring. He said he did not know how many Café’s, but estimated in the hundreds (perjury…tisk, tisk, tisk). How many Digital BillBoards…in the thousands (big time perjury)…(shame on you!) He was asked about revenue generated from these machines…”I am not certain, It’s not the area that I work in “…or some similar nonsense, for crying out loud, you are the CFO.
Next it was “Dr.” Larry Bland. When asked to state his name, he dropped the “Dr.” portion. After his racial card dissertation and civil rights, the AG dropped the bombshell. He introduced evidence and asked LB to identify (it appeared to be a resume). LB said he did not know where they got this from. AG established his addressed where LB lived about ten years ago. LB agreed. Next piece of evidence…tara C&D order against Dr. Larry Bland issued by..guess who…the MD AG office. For what you might say…for pretty much the same thing. He was selling stock into his own company (so ‘people can have ownership in something that they could never have…to live the American Dream…swing low sweet chariot”…to help these poor, poor people, blah, blah, blah). LB was fined $150K and similar to Andy Williams was barred from doing this again in MD.
LB denied it, said he had NEVER seen the order (however earlier the AG established, based on LD own admission that he lived at the address where the order was served). He also admitted to having the company. He then became flustered…I didn’t take any money…I don’t know…I don’t know…
To further implicate themselves LB said that the company is loosing $150K per day, because of the C&D order. The judge then asked what the source of these funds is. Hmmm, we do a lot of wonderful things, it a racist thing.. Ok, where does the $150K a day come from , what is the source the judge asked again…he more or less said from other investors. The judge then said, that this appears to be the only source of revenue (other investors)…They chewed him up and spit him out.
Next it was (retired) Admiral Combs. He more or less said, I am an intelligent businessman, have served on large corporate boards and I know what I am doing and was aware of the risk (he has five homes in the program, to help other). So the judge said, OK you are a business person, let’s talk numbers. He went through the same scenario, how do you take $75K and turn it into $750K in seven years… we’ll we do good for the community, we are good people…The judge again redirected, we are only talking numbers. Please explain how you take $75K… Mr. Combs then referenced Michael Hickson seven point investments. The judge then asked did he know how much revenue these things were generating, he said he did not know, that this was Michael Hickson’s area. So the CFO, President and CEO have no idea what revenue is being generated (the judge was getting quite agitated).
Through the morning the MDH lawyer kept stating that the order was causing irreparable harm (he knew enough not to say a loss of income..because there is none). However, the AG countered with that the C&D order did not stop them from doing their seven point revenue stream (hah, hah), the C&D only asked them NOT to break the law. Therefore, they are only asking for MDH to continue NOT breaking the law. This was very simply stated and very powerful.
Also, another point of contention from MDH was that this instrument was not a “Security” but a “Fixed Annuity”. However, the AG came back with that a Fixed Annuity is exempt from registration only if it is offered by an insurance company, and he said “I haven’t seen any reference to MDH being an insurance company…is that correct (as he turned to the MDH Attorney). Such silliness., such a stupid defense that any junior lawyer could have told you that.
Both sides then gave closing statements
In the judge’s summary he mentioned:
MDH stated that they are loosing $150K / day. However, only source appears to be other investors.
Two of the principles of the company (AW, LB) have been sanctioned by the AG before.
No one has been able to explain how this “windfall” will take place (the judge said that this was like a “hose of cards” that could come down very quickly.)
The AG appears to be right in protecting the public.
There is a ‘serious high risk’ of MDH NOT being able to fulfill their contracts.
That MDH does NOT have a “Constitutional Right” to break the law.
That should give you a flavor for what took place there were probably over 100 people there. If I can think of any other important items, will holler back at you.
I dunno.......really appreciate you posting these excerts, Rey, but I am VERY CONFUSED, especially by the following:.......
"First, a summary order to cease and desist was to be issued by Defendant to cripple Plaintiffs by drying up their cash flow. No business can operate for long without a continuing revenue stream—even Google.
........sounds like the terms "Plaintiff" and "Defendant" are reversed? I keep lowering my opinion of the competance of MDH and thier lawyers! Either way you read it, it supports the gov't because it 'admits' that they don't have other (i.e.legitimate) revenue producing businesses.....not to mention it's been less than 1 month since the C&D and they're outta cash??? and they were gonna pay 30 yr mtgs in 5 yrs.......yeah, right. The cash is buried someplace.
I dunno.......really appreciate you posting these excerts, Rey, but I am VERY CONFUSED, especially by the following:.......
"First, a summary order to cease and desist was to be issued by Defendant to cripple Plaintiffs by drying up their cash flow. No business can operate for long without a continuing revenue stream—even Google.
........sounds like the terms "Plaintiff" and "Defendant" are reversed? I keep lowering my opinion of the competance of MDH and thier lawyers! Either way you read it, it supports the gov't because it 'admits' that they don't have other (i.e.legitimate) revenue producing businesses.....not to mention it's been less than 1 month since the C&D and they're outta cash??? and they were gonna pay 30 yr mtgs in 5 yrs.......yeah, right. The cash is buried someplace.
Sagegriot, MDH is the plaintiff requesting removal of the Temporary Restraining Order.
Here is the excerpt from the court document about claiming to be an Annuity Company. The Plantiff is POS Dream Homes.
"Plaintiffs’ contested programs operate similar to a fixed annuity contract, which is not generally a “security” within the meaning of securities laws. See generally Otto, et al v. Variable Annuity Life Insurance Co., 814 F. 2d 1127 (7th Cir. 1987). In a fixed annuity contract, the buyer pays a specified sum to the seller in exchange for the seller’s promise to pay a fixed sum annually to the buyer or a period of years or for life. Plaintiffs’ Dream Home program is similar. A standard contract is attached as Exhibit 3. Assume the participant has an outstanding $500,000 mortgage. The participant pays 15% of the mortgage, i.e., $75,000, to Dream Homes. That payment is like the payment an annuitant makes to an annuity seller. In exchange for the payment, Dream Homes agrees to pay the monthly mortgage of the participant, a and more, to accelerate the pay-off date.
When the mortgage is completely paid, the participant and Dream Homes divide the value of the property 50-50. Title to the property remains in the participant throughout the transaction. Dream Homes depends in part on the 50-50 equity split after the mortgage is paid for its asset base. Defendant has adduced no evidence that Dream Homes has defaulted on its mortgage payment contract obligations. It has produced no evidence that the Dream Homes program operates like a Ponzi or pyramid scheme. It has adduced no evidence that Dream Homes’ business plan is not viable absent a continuing influx of new participants. At present Dream Homes has approximately 900 participants."
I wonder if Larry Bland (LB) is really a Doctor?
The Maryland Division of Securities reports that Metropolitan Investments President Larry Bland appealed to the African-American community to buy shares in his company, which, he said, would benefit the community by providing health and other social services in Metropolitan’s building. In fact, Metropolitan did not own the building and used most of the investors` money for pyramid schemes and other purposes unrelated to the social interests of the community. A Final Order was issued on June 6, 1997, against Larry Bland to cease and desist from selling unregistered securities, naming Bland primarily responsible for the misrepresentations and omissions made in the solicitations. He was permanently barred from engaging in securities transactions and ordered to pay a civil penalty of $125,000.
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