More On The Metropolitan Grapevine / Metro Dream Homes "Ponzi Scheme"

The Laurel Leader (Laurel, MD) reports on last week's Prince George's County Circuit Court ruling placing Laurel home- mortgage company Metropolitan Grapevine under receivership and freezing the company's assets:

• Judge Thomas P. Smith took the action against POS Dream Homes, also known as Metropolitan Grapevine, following a three-day trial that ended Oct. 31. [...] "The only income that the defendants have shown of any significance is the investments of each succeeding generation of investors," Smith wrote in his ruling. "Investments are not income ... because they have to be repaid." Smith not only froze POS' assets, effective Oct. 29, but also those of 18 other entities affiliated with the company.

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• "The examiner wasn't able to do a thorough investigation because at times the office was closed, and (when he did get in he) found computers and files missing," said Raquel Guillory, spokesperson for the state attorney general. The examiner did determine that the company only had $150,000 in cash assets and 50 cars, including numerous S-Class Mercedes Benzes, Corvettes, Escalades and other high-end vehicles. Those vehicles, along with 14 real estate properties in Laurel, Virginia and the District, totaled $2 million, according to court documents.

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• "The only method of the defendants paying older investors was to obtain new investors in a classic Ponzi scheme," Thomas ruled.

For more, see Judge freezes assets (Payoff plan seen as 'classic Ponzi scheme').

See also, Maryland Shutters 'Investment Firm' Amid Fraud Charges (Victims lost more than $50 million in Ponzi scheme) (Consumer Affairs - 11-6-07).

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