WRIC anchor says she and her spouse lost $200,000 in Ponzi scheme
In 2006, local television news anchor Gwen Williams Dandridge and her husband, Eric, began investing with Walkwood Properties, which offered a 50 percent return in 45 days.
The money was supposed to be used to buy property facing foreclosure. Known as Gwen Williams to viewers of WRIC, she testified in federal court yesterday that although they initially made some money, they wound up losing $200,000.
The owners of Walkwood -- Darrell Underwood, 42, and his wife, Cynthia, 41 -- are on trial on 36 counts of bank, mail and wire fraud; aiding and abetting bank, mail and wire fraud; money laundering; and engaging in unlawful transactions.
Their company, based in Midlothian, allowed homeowners to save their homes from foreclosure by selling the property to Walkwood. And the Underwoods drew many investors, including Williams, from the church they attended, Mount Gilead Full Gospel International Ministries.
The indictment alleges that the couple, when soliciting new investors, would make reference to Williams and high-profile church members -- who were unaware of any fraud and, in some cases, that their names were being used.
Williams testified yesterday that she never gave permission for her name to be used and that her employer would not have allowed it. She said Darrell Underwood assured them the money was backed by real estate.
Many investors were promised up to a 50 percent return on their money within 60 to 90 days, and many of them drew in more investors who were impressed with the returns.
Prosecutors allege that it was a Ponzi scheme in which money from new investors was used to pay earlier ones. Prosecutors say that when the company's offices were raided in December 2007, it was millions of dollars short of what was needed to pay everyone back.
The government alleges that of the $18.4 million the Underwoods took in from April 2007 through Dec. 13 2007, about $13.4 million was used to pay back investors while roughly $2 million was used in real estate deals.
The Underwoods, prosecutors also allege, used some of the money to make their own mortgage and car payments and even church tithing.
Williams testified that Darrell Underwood assured them everything was aboveboard. In addition to making investments in the investors pool, she and her husband also went in on special deals with Walkwood to buy five homes in which they each got 25 percent of the profit and the company 50 percent.
As a result, the Williamses still own four homes. "We'd like to sell them if anybody wants to buy them," Williams said, prompting chuckles in the courtroom.
Among other investors who have testified was Simoan Roane, 29, a Verizon employee. Roane said she had been $30,000 to $40,000 in credit-card debt and $100 to $200 a month short of meeting all her financial obligations each month.
She did not know how she would dig herself out of the hole. Then she heard of the great returns that people were making with the Underwoods, a couple she had seen at church. She visited their busy offices and met with Cynthia Underwood.
Roane said she thought not only would she make a good return but also would be helping people keep their homes.
She arranged a $20,000 credit-card advance and invested, thinking "this was my opportunity to finally break free." Thus far, however, she has been paid back $900 and is now in a far deeper financial hole.
"I keeping borrowing from Peter to pay Paul," she said.
She added that she keeps "wondering why in the world did I do this."
Thomas Trotter, a friend of Darrell Underwood, started investing small amounts and then larger ones as the payments started coming back. "I was making a lot of money, and I was telling people I was making a lot of money," he said.
Trotter said he wound up bringing in 44 other investors with whom he split the profits. It was so lucrative, he said, that "it got to the point nobody wanted to pull their money out."
"Me and my clients, we really got greedy. . . . We wanted to keep investing, and [Darrell Underwood] said, 'Sure.'" Trotter testified that he owes $3.2 million to $3.5 million to other investors and that he has fled the state.
He said he told Underwood that people were trying to kill him and that he owed a lot of money. He testified that Underwood told him, "Trotter, man, what you're in, I'm in 10 times worse."
Contact Frank Green at (804) 649-6340 or
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Reader Reactions
Trotter,stop trying to say you and your clients were getting greedy.The only one I saw being greedy was you.You were trying to live like a celebrity.Please!
I think that this is a case of poor money management and not knowing when to say enough. I appreciate Mr. Trotter’s honesty when he mentioned that he got greedy when the money started coming in. He took responsibiliy for his actions. Now, I don’t understand how people say that they’ve lost money when they have admitted to getting the money initially. With a 50% return, it’ll only take 2 cycles to get what you invested. It’s kinda like as long as the people were getting rich, they were ok, but when things started falling apart, the Underwoods are being put on blast. I understand that the law is the law. I just don’t think that they are being treated fairly. The truth of the matter is that any investment is a game of chance. Even if you get a contract with terms outlined, there is no garantee that the terms of the contract is really what’s making the money. I am confused about one other thing. I’ve read comments from some of the church members and I find it interesting that of all people, the Pastor has been very quiet. I did notice that he mentioned that he was a part of the 50/50 program but didn’t feel comfortable with the other ones. If that is the case, as a leader, he has an obligation to lead his sheep. There were too many members involved in this for the Pastor not to push it. Either there is a body of disobedient sheep or the leader is playing it safe. According to the reports, Mr. Underwood was encouraged by others to share his wealth with his church family. He did that. He showed them how he did it. I read that some of the money was used to tithe, if the Pastor was so uncomfortable with the programs in which Mr. Underwood made his money to pay the tithes, why did he give their checks back? I feel bad for the people who got in at the wrong time, which resulted in them not getting their money. However, for the people who made money 5 and 6 months or more, I don’t think it’s fair to say that you’ve lost money. As long as the getting was good, it as cool, but when things go wrong, it’s a scam. I think that when Mr. Underwood started getting in more money than he could spend for the houses, he should’ve started turning people away. Instead, he wanted to help everyone and ended up getting screwed. Some things he caused on himself, but I don’t think that people are being fair in this whole thing. As a part of the African American culture I know that most of the time when something is working good for us, we try to pull others up as well. Sometimes, you can’t do that. People complained that he used some of the money for living expenses. My thing is, if someone was flipping your money for a major return (that some did get), why shouldn’t he be paid? That doesn’t make sense. I just think that people who are playing the victim should examine their positions the same way that Thomas Trotter did. The truth is everyone who invested made a choice to do so. Life is about choices and consequences. It shouldn’t be a thing of “I’m excited and happy that the money is coming in (if the investment prospers), but of not, I’m the victim.
This is a case of handing your money to someone without doing your homework. Obviously with people like Madoff people are going to get taken because he had celebrities endorsing him for years, but these people had no solid background to work off of and anyone doing their homework would have found that out. The simple fact is nothing is that easy. If something sounds too good to be true it probably is (like 50% return in 90 days?) and if you are in debt up to your neck, borrowing money from an advance on your credit card for a scheme like this is stupid. This is EXACTLy why money management should be required in public schools along with investing, so that kids grow up having a clue what a scam looks like.
It appears to me that most of these comments are very judgmental; condemning those who obviously took a chance on what they thought was a legitimate business deal. Although the terms seemed to be a little hard to believe, it doesn’t negate the fact that they were willing to take the risk, which comes along with any investment portfolio. In addition this should not be an indictment on the church but easily can be an endorsement of scripture read Matthew 25. Nevertheless from what I read these people didn’t request your apathy or your expertise in glass house living so you may want to keep your stones to yourself! Also read (Matthew 7:2)
It’s not always greed that drives these investments. I have family members who invested in this company and I can tell you greed did not drive their decision. What did drive the decision was the fact that my family wanted to make sure they could leave something for my cousin’s and I when they passed, they wanted to help us pay off our college debt, fix up their homes and other things that they could not have afforded to do otherwise.
Mr. Underwood had investors tour his offices, showed them homes that had been purchased and sold and as you’ve seen gave them the names of people they trusted that had also made money from this. I can’t speak for other investors, but I know my family discussed this and talked to other investors for a while before deciding to go with it and Mr. Underwood courted them intensely to get them to make a decision in his favor. Of course those investors who praised the company had no idea that the money they were getting wasn’t from the sale of the homes. All they knew is that it was working for them. When you have people you trust tell you something is legit, you sometimes go for it. And I don’t know anyone who hasn’t had a return on an investment not turn around and invest again. The total fault of this should not be focused on the victims, but on Mr. Underwood and his wife who intentionally deceived others by using trusted family and friends.
While I agree that “greed” appears to be a determinant factor - let us not forget that this is the same motive that lead some people to invest and expect “unreasonable” returns with Bernard Madoff AND Byron K. Brown AND Richard Piccoli AND Banco Santander AND Edward Okun AND Dennis Cope AND William J. Hammons AND R. Gregory Gibbs AND John M. Donnelly AND Edward Thomas Dold AND Allen Stanford.
GREED is what drove these people!! Unfortunately being religious and belonging to a church doesn’t exempt you from greed. Why would anyone who is $30,000-$40,000 in debt take a $20,000 credit advance to invest in what was clearly a scheme? Bad investments and bad judgement doesn’t excuse anyone and the worst thing is the greed. These people were just seeing $$$$ signs and not seeing the possible consequences. These actions did not only affect them but the public as a whole. Those who have always paid their mortgage and debts on time now pay for those who haven’t and most are people like these who let greed get the best of them. The fact that these people lured others from church and in turn friends and family is deplorable. How do you sleep at night? Ms.Williams and her husband have 4 homes to sell off, good luck because now no one will want to be associated in any way with those homes. Do yourselves a favor and if you really are Christians donate the properties to a good above board charity. I do feel sorry for these people because they are of weak mind and spirit. They are followers not leaders.
Wait a minute, she’s already short 1-200 dollars a month. Her plan was to get a cash advance for an additional $20,000. She darn near doubled her debt overnight! I’m also wondering if Gwen called 12 On Your Side when she was unable to turn $200k into $300k in 45 days.
Let’s be careful not to fault the church at whole (the body of Christ) for individual’s actions. The truth is there are wicked, greedy individuals who attend churches each Sunday. (Key word - individuals). I hope the pastor of this congregation is not connected to this because there are many lives (souls) at sake. People really don’t need another reason to not hear the message of Jesus. The message of Jesus not PROSPERITY. We see here what come from prosperity preaching.
Fraud from people of God who would have known!!! It is hard to trust major companies nevermind some hokey folks in your church go figure….
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