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For Immediate Release

Media Contact:
Raquel Guillory, 410-576-6357
rguillory@oag.state.md.us

COURT PLACES LAUREL-BASED MORTGAGE PAYMENT / INVESTMENT PROGRAM INTO RECEIVERSHIP
Ponzi Scheme Accused of Securities Violations and Investment Fraud

BALTIMORE, MD (November 1, 2007) - Attorney General Douglas F. Gansler announced today that POS DH, LLC, Metropolitan Grapevine, LLC, and Andrew H. Williams, Jr., have been placed in receivership, effective Monday, October 29, 2007. After hearing three days of testimony detailing the business activities of the Defendants, the Honorable Thomas P. Smith, Circuit Court for Prince George’s County, issued an order placing the companies into receivership and freezing their assets as well as those of an additional 18 entities that were shown to be affiliated with the Defendants’ business operations.

The court determined that over 1,000 people invested approximately $50,000,000 in promissory note and investment contract securities offered and sold by the Defendants, investments that are essentially without value. The court also determined that the Defendants’ businesses generated no significant income and that they are insolvent with liabilities of $200,000,000 to $300,000,000 and current assets of approximately $2,000,000. The court concluded that the Defendants were paying previous investors with funds received from new investors, and that the investment program was, in fact, a Ponzi scheme.

“This court order now places the financial control of POS DH, LLC, Metropolitan Grapevine, LLC, and Williams, in the hands of the court-appointed receiver,” said Attorney General Gansler. “The receiver will now take all of the assets of the Defendants traceable to this investment scam and create a pool of money to be refunded to the investors and other creditors.”

In August, 2007, the Securities Division of the Attorney General’s office issued a Summary Order to Cease And Desist against POS DH, LLC, Metropolitan Grapevine, LLC, CEO Andrew H. Williams, and agent Laveda Whitfield, and their officers and directors, all operating out of Laurel. That action ordered the parties to cease and desist violating Maryland’s securities laws by operating an investment program involving the promised payment of homeowners’ mortgages in five years following a payment to POS, while misrepresenting or failing to disclose details about risk, use of proceeds, and company personnel. The companies used a variety of business names, including POS Dream Homes, Metro Dream Homes, POS Café, Metro Grapevine, and other names as part of the overall scheme.
The Securities Division’s investigation revealed that POS Dream Home operated an unregistered promissory note investment program under the guise of a mortgage payment plan. Using personal sources and public meetings to solicit potential investors in Metropolitan Grapevine and POS, agents offered the opportunity to live mortgage free. For an up-front payment to POS of $5,000 plus a percentage of the loan amount, a home buyer or owner was promised full payment of their mortgage in five years or less. The owner then would split the value of the home with POS. The money to make the payments allegedly was generated from POS’s investment in “POS cafes,” which included an ATM, credit card reader, and other revenue-generating devices.

While soliciting investors, POS and its agents failed to disclose to investors where the cafes were located, past financial results, operating expenses, the lack of any registration of the investments, and the history of management personnel. Williams is the subject of a 2001 order by the Circuit Court for Prince George’s County, enjoining and restraining him from engaging in the securities business in Maryland. Neither company, its notes, or its promoters is registered with the Securities Division as required by Maryland law.

The Attorney General says his Securities Division brought the actions not only to halt the fraudulent scheme and prevent new investor losses, but also to protect whatever assets remain for distribution to the programs’ existing investors. “There is great risk of loss of investors’ money where there is no demonstrated source of income except other investors,” said Attorney General Gansler. “In today’s already jittery climate of rapid change in home values and questionable mortgage practices, fraudulent programs like this further erode confidence in the investment and mortgage markets.”

Attorney General Gansler is asking anyone with knowledge of the location of any money, bank accounts, or other assets, including the more than 50 vehicles owned by the companies, to contact the Office of the Attorney General at (410) 576-6360, or the receiver in this matter, Invotex Group, 1637 Thames Street, Baltimore, Maryland, 21231. They can be contacted by mail or through the website: www.pos-receiver.com.

Attorney General Gansler is also reminding investors that they can contact the Securities Division of his office at 410-576-6360 if they have questions concerning the status of investment promoters or the securities in which they plan to invest. Gansler cautions potential investors to thoroughly check out any investment opportunity by contacting the Securities Division regarding securities broker-dealers, agents, investment advisors, investment advisor representatives, financial planners, the registration status of securities, or to report suspected fraud.

   

Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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