NEWPORT NEWS, Va. (March 19, 2015) — Keith D. Kosco, 56, of Williamsburg, Va., pleaded guilty yesterday to Conspiracy to Commit Mail and Wire Fraud, Aggravated Identity Theft and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office made the announcement after the plea was accepted by U.S. District Judge Robert G. Doumar.
Kosco was indicted by a federal grand jury on November 17, 2014. Kosco faces a maximum penalty of twenty years on the conspiracy count, ten years for engaging in monetary transactions with proceeds from unlawful activity, and a mandatory two year sentence for aggravated identity theft when he is sentenced on July 13, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In a statement of facts filed with his plea agreement Keith Kosco, admitted to being the owner and operated of a number of entities involved in travel, tourism and timeshare businesses including Resort Realty, Inc., Resort Solutions, Inc., and Exotic Equity Transfers, LLC (“EET”). A timeshare unit, generally a fully furnished resort accommodation, is a deeded or non-deeded interest in real estate divided into intervals, most commonly by week. Since at least 2007, EET conducted timeshare transfers in exchange for a fee charged to the original owner.
Keith Kosco and his employees represented that the timeshare unit transfers conducted by EET would be legitimate and result in clean title passing to a new owner with no further obligations of timeshare ownership (including maintenance fees) on the original owner once the transfer was complete. Transfer paperwork was handled by EET in coordination with Professional Closing Company which served as a third party closing entity, and was operated by co-defendant Julie Duffield.
From at least 2009 – 2013, Kosco, Duffield and their employees conducted fraudulent transfers of over 1,000 timeshare units into the names of stolen identities, including Kosco’s incarcerated daughter, who were unaware that they were receiving these properties, and straw buyers (about ten total), who they paid $35-$50 for each transferred unit. The defendants collected fees for conducting the transfers from the original owners. None of the stolen identities / straw buyers paid the required maintenance fees or taxes on the timeshare units, resulting in over $800,000 in losses to select resorts for the unpaid fees.
Kosco, Duffield and their employees engaged in various fraudulent acts in support of the scheme, including false reps and promises to resorts, propping up stolen identities with email accounts, bank accounts and tax returns, falsely notarizing signatures and preparing fraudulent deed paperwork. The transfers also had devastating impacts on the credit of the stolen identities/straw buyers.
Julie Duffield pled guilty on January 12, 2015, to conspiracy to commit mail and wire fraud. Her sentencing is scheduled for May 5, 2015. In a related case, Brendan Hawkins pled guilty on December 22, 2014, to conspiracy to commit mail fraud and his sentencing is scheduled for April 20, 2015.
This case was investigated by the FBI and the Internal Revenue Service. Assistant U.S. Attorneys Brian J. Samuels and Kaitlin C. Gratton are prosecuting the case on behalf of the United States.
SOURCE: U.S. Attorney’s Office for the Eastern District of Virginia.