Chesterfield couple plead guilty in Ponzi scheme

A Chesterfield County couple who defrauded fellow church members and others in a Ponzi scheme pleaded guilty yesterday and agreed to repay victims more than $9.7 million.

Darrell Underwood, 42, faces up to 10 years in prison and Cynthia Underwood, 41, five years when sentenced on Sept. 17. Each was found guilty of conspiracy to commit mail fraud. Darrell Underwood also pleaded guilty to engaging in unlawful transactions.

The two owned Walkwood Properties in Midlothian, which specialized in helping homeowners about to lose their homes to foreclosure. They attracted many investors from their church, the Mount Gilead Full Gospel International Ministries.

Chief U.S. District Judge James R. Spencer accepted the pleas yesterday afternoon and dismissed the jury empaneled June 3. The jurors heard evidence from more than two dozen prosecution witnesses on 36 charges, including fraud and money laundering.

Underwood remains in custody. His wife, free on bond, did not respond to questions when leaving the federal courthouse on Broad Street.

Many victims -- some of whom borrowed money on credit cards to invest -- testified, and several said they still consider Underwood a friend. After yesterday's proceedings, Cynthia Underwood was hugged inside the courtroom by a victim who had testified earlier this week.

Outside the courthouse, another victim, James Crowder Jr., said he and his parents lost a "substantial" amount of money and that "I don't think justice was really served."

But, he said, "I'm not upset with them -- I put that in God's hands."

Many who placed their money in the Underwoods' investment pool were promised -- and received -- a 50 percent return on their money within 60 to 90 days. Some were so impressed they formed their own companies and drew in third-party investors.

But authorities allege the Underwoods' business 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, promising to invest in distressed properties, about $13.4 million was used to pay back investors while about $2 million was used in real estate deals.

Some of the money was used by the Underwoods to help pay their own mortgage and to make payments on expensive cars.

One of the victims was WRIC-TV anchor Gwen Williams Dandridge, who along with her husband made some money investing in partnerships with Darrell Underwood but lost $200,000 investing in the Underwoods' investment pool.

Another high-profile investor, Bishop Daniel Robertson Jr., the senior pastor of Mount Gilead, also made money in 50-50 partnerships with Underwood. But he testified that he was not comfortable with the investment pool and declined to participate further.

Robertson said that when he started hearing "disturbing news" about the investments some members of the church were making, he cautioned people from the pulpit to be careful when investing, though he did not identify the Underwoods' business.

Kent Early, an investor and a Gloucester accountant who has prepared corporate and personal tax returns for the Underwoods for years, testified that "Darrell's an honest person, and I felt very comfortable doing business with him."

"I trusted him, and I had faith in him that he would do well," said Early, who nevertheless lost $20,000 he invested in October 2007.

Jurors willing to speak after they were dismissed said they were trying to keep an open mind on the question of guilt or innocence until all the evidence was in. They never got to hear evidence from the defense.

Juror George Browning, surprised by the turn of events, said of the Underwoods: "I felt like they were trying to help people but going about it the wrong way."

Contact Frank Green at (804) 649-6340 or .