TRENTON, NJ (April 24, 2013) — Attorney General Jeffrey S. Chiesa announced that a Burlington County, N.J., man who owned and operated vacation travel club companies has been indicted with his wife on charges that they stole hundreds of thousands of dollars from customers by pitching phony vacation travel membership packages (“vacation packages”) and collecting fees for “free” promotional airfares or cruises that were never delivered.
Attorney General Chiesa announced the charges today at the Hughes Justice Complex with Director Elie Honig of the Division of Criminal Justice. The indictment stems from a criminal investigation by the Division of Criminal Justice, assisted by the U.S. Postal Service and the New Jersey Division of Taxation. The investigation began with a referral from the Division of Consumer Affairs.
On Friday, April 19, the Division of Criminal Justice obtained a state grand jury indictment charging Daryl Turner, 41, and his wife, Robyn Bernstein, 43, of Marlton, N.J., who ran the travel companies with him, with first-degree counts of conspiracy and money laundering, as well as two counts of second-degree theft by deception. The first-degree counts carry a sentence of 10 to 20 years in prison, and the money laundering charge carries fines and penalties of up to $1 million. Turner is also charged with four counts of third-degree failure to file a state income tax return, for tax years 2008 to 2011, and Bernstein is charged with failing to file a 2011 state income tax return.
The indictment alleges that Turner and Bernstein falsely promised large discounts and benefits to those who bought vacation packages, which typically cost between $2,200 and $6,500. The defendants allegedly knew that the promised discounts and benefits were not available. In addition, they allegedly failed to deliver “free” round-trip airline tickets and cruises after customers paid them hundreds of dollars in “fees and surcharges” to qualify for the “free” promotional trips. Turner and Bernstein allegedly laundered more than $700,000 in criminal proceeds from the victims through two personal bank accounts and used the money to buy their luxury home in Marlton.
“Like a pair of old-school con artists, Turner and Bernstein allegedly operated eight different travel companies in a little over four years, closing one company down and opening another in a new location whenever they felt the heat because consumers learned of their fraud,” said Attorney General Chiesa. “The defendants allegedly tricked people out of their hard-earned money, promising vacation deals that they knew did not exist. Because of the large sums of money involved, which they allegedly laundered, they will face lengthy prison sentences if convicted.”
“This is a flagrant case of consumer fraud,” said Director Elie Honig of the Division of Criminal Justice. “We allege Turner and Bernstein never intended to deliver on their offers of free cruises and airfare, or their promises of big discounts on vacation packages. We will continue to take referrals from the Division of Consumer Affairs on cases where we allege that the line is crossed from business enterprise to criminal enterprise.”
“This case is an example of what happens when law enforcement agencies effectively work together to achieve a common goal. Consumer protection and prosecuting individuals using the U.S. mail to perpetrate their fraudulent schemes is core to the mission of the United States Postal Inspection Service. We are proud to have contributed to this investigation,” said Karen V. Higgins, Inspector-in-Charge of the Philadelphia Division of the U.S. Postal Inspection Service.
Deputy Attorney General Mark C. Kurzawa presented the case to the state grand jury for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Richard Loufik and Analyst Alison Callery conducted the investigation for the Division of Criminal Justice. Special Agent William Makar handled the investigation for the Division of Taxation Office of Criminal Investigation. Postal Inspector Thomas Ninan, General Analyst Debra Maiorano and General Analyst Grover Thompson handled the investigation for the Philadelphia Division of the U.S. Postal Inspection Service under the direction of Inspector-In-Charge Karen V. Higgins.
The defendants allegedly recruited customers using mass postcard mailings that offered recipients a “complimentary cruise for two” and/or “complimentary airfare for two.” When recipients called the toll-free number on the card, they were told they must visit one of the defendants’ business locations for a 90-minute presentation, which turned out to be a high-pressure sales pitch to purchase vacation packages. Customers viewed a PowerPoint presentation in a group setting, followed by a private meeting with sales representatives to discuss membership pricing.
Between January 2007 and July 2011, Turner and Bernstein allegedly stole from customers through two basic schemes:
- Promotions: All who attended their presentations received gift certificates for the advertised “free” cruise and airfare, whether or not they signed a contract to purchase a vacation package. However, to redeem the certificates, customers had to return a form with personal information and make certain advance payments. For the “free” cruise, customers were required to pay $249 per person that was purportedly for “port charges and government fees.” For the “free” airfare deal, customers were required to pay a deposit of $50 per person to cover purported “fees, taxes and surcharges.” The customers had to pay by money order and send a self-addressed envelope, after which they were mailed a reservation request form. It is alleged that the customers sent in the reservation request forms, but were never able to book the cruises or flights. Investigators allegedly traced hundreds of money orders from such promotions totaling $149,349 into bank accounts of Turner and Bernstein.
- Vacation Packages: The other scheme involved the vacation packages. It is alleged Turner and Bernstein induced customers to purchase vacation packages, at costs ranging from approximately $2,200 to $6,500, by promising them unattainable vacation prices and unavailable vacation properties. While Turner and Bernstein marketed travel deals, they were not involved in the actual booking of travel at all. Instead they had a contract with a Georgia-based travel company, which they used to book vacations for their customers. Turner and Bernstein allegedly defrauded customers by promising that, with the purchase of the vacation packages, they would receive big discounts on vacations and travel services, and would have access to prime hotels, resorts and condo rentals. In reality, Turner and Bernstein allegedly knew that such discounts and benefits were not available through the company that booked vacations for them.
For example, the defendants allegedly represented that their members would receive 65 percent off cruises and could book condo resort weeks for an average of $490. Nothing approaching those deals was actually offered. Many of the resorts and condos they advertised to customers, including condos in the Disney World Resort, were simply not available through the Georgia travel agency they used. Likewise, the defendants allegedly distributed brochures advertising that customers who purchased vacation packages would receive 50 percent discounts on hotels, 75 percent discounts on resort accommodations, 50 percent discounts on golf packages, and 40 percent discounts on car rentals. Such large discounts were not available, and the agency they used did not even book golf packages or handle car rentals.
Turner and Bernstein ran three promotion companies: 1. Away We Go Promotions, LLC, 2. Promotions, and 3. Reservations. They operated under the following names: 1. Dreamworks Vacation Club a/k/a Dreamworks Vacations a/k/a Dreamworks; 2. Five Points Travel Company, 3. Vacation Clubs LLC d/b/a La Bonne Vie Travel, 4. Bentley Travel, 5. Blue Water Gateway, 6. Modern Destinations Unlimited, 7. VIP Executives, LLC, and 8. Travel Deals, LLC. Some of the companies were incorporated and had business addresses, including locations in Cherry Hill, Marlton, Parsippany and Manalapan. However, others were not incorporated or registered to do business in New Jersey, and two of the promotion companies, Promotions and Reservations, had only a mail drop box or “virtual office” outside of New Jersey.
In May 2009, the State Division of Consumer Affairs filed its initial civil complaint against Turner and three of his businesses in Superior Court in Morris County. The action arose from the receipt of consumer complaints and a resulting investigation by the Division of Consumer Affairs and the Burlington County Office of Consumer Affairs. Afterwards, the Division identified additional business names used by Turner, and filed amended complaints to include them as defendants. In February 2011, the Division and Turner settled the action, with the filing of a Final Consent Judgment whereby Turner agreed to pay a settlement amount of $3,086,508, which consisted of $2,188,728 in restitution, $478,000 in civil penalties, $375,374 in attorney fees, and $44,406 in investigative costs. The restitution amount represented payments made by 528 of the 676 consumers who had filed complaints with the Division by that time. The settlement also prohibited Turner from working in, owning or operating any travel or vacation club companies in New Jersey for five years.
At the time, Turner represented that he had limited funds or assets to apply to the judgment. Afterwards, the Division of Consumer Affairs discovered that Turner was involved in the operation of Travel Deals, LLC, a company owned by Bernstein which was also selling vacation packages, and that Turner failed to disclose assets, including bank accounts and motor vehicles. In May 2011, the Division filed a Motion to Enforce Litigant’s Rights against Turner, to enforce the settlement terms, which the Court granted. Following the Division’s investigation and receipt of consumer complaints, a civil complaint was filed against Turner, Bernstein, Travel Deals, VIP Executives and Reservations in June 2011 in Superior Court in Burlington County. The Division obtained temporary, then preliminary injuctive relief and, on Jan. 25, 2013, filed a Motion for Final Injunctive and Other Relief. That motion is currently pending.
“We brought the full resources of the Attorney General’s Office together to bring these alleged notorious frauds to justice. Those who think defrauding consumers is a minor matter will find out how wrong they are, as Turner and Bernstein can attest to,” said Eric T. Kanefsky, Acting Director of the Division of Consumer Affairs. “Our goal remains getting money back into the hands of the consumers who Turner and Bernstein allegedly defrauded, and holding the defendants accountable for their alleged actions.”
Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section in the Division of Law, and Investigator Murat Botas led the civil action and investigation for the Division of Consumer Affairs.
The Division of Criminal Justice initially arrested Turner on theft charges in July 2011. At the time, detectives executed a search warrant at the offices of Travel Deals in Marlton, and seized various assets of Turner and Bernstein, including three luxury vehicles: a 2011 Range Rover, a 2001 Ferrari, and a 2007 Bentley. The Division of Criminal Justice also filed a lien against their home on Country Lakes Drive in Marlton.
First-degree crimes carry a sentence of 10 to 20 years in state prison and a criminal fine of up to $200,000. The first-degree money laundering charge carries an enhanced fine of up to $500,000, and an additional anti-money laundering profiteering penalty of up to $500,000. Second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree crimes carry a sentence of three to five years in prison and a fine of up to $15,000. The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.
The indictment was handed up to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned the case to Burlington County, where Turner and Bernstein will be ordered to appear in court at a later date for arraignment. A copy of the indictment is posted with this release at www.njpublicsafety.com.