HOUSTON, TX (May 21, 2015) — The final defendant in connection with telemarketing fraud and money laundering scheme spanning nearly five years has been convicted of conspiracies to commit wire/mail/telemarketing fraud, announced U.S. Attorney Kenneth Magidson. James Assi Jariv, 64, of Las Vegas, Nev., entered a guilty plea May 18 before U.S. District Judge Lynn H. Hughes.
Jariv’s son Alexander, 27, his wife Jiwon, 35, his ex-wife Varda, 74, all of Las Vegas, and four others – Ronald Frank Muise, 52, his son Michael Derek Muise, 30, and Thresa Lloyd, 44, all of Las Vegas, Nev.; and Leon Avedikian, 46, of Los Angeles, Calif. – previously pleaded guilty for their roles in the scheme.
Between December 2007 and Feb. 24, 2012, the defendants victimized approximately 1000 victims living in Canada and throughout the United States, including the Southern District of Texas.
The Jarivs and the others used a number of different named companies to conduct their telemarketing timeshare resale scheme targeting timeshare owners throughout the United States and Canada. The timeshare owners were solicited to pay advance fees in exchange for the promise that The Jariv Companies had willing buyers for the timeshare properties or points. However, The Jariv Companies did not have buyers for the timeshare owners’ interests and did not market or sell the property.
The Jariv companies were registered in various states, including Texas, Nevada, California, Illinois and Washington and conducted business at multiple addresses in Houston, Las Vegas, Los Angeles, Chicago and Seattle.
The defendants used mailing addresses or “virtual office suites” in Las Vegas, Houston, Chicago and Seattle for receiving monies from timeshare owners via U.S. Mail or commercial interstate carriers like Fed Ex, all the while maintaining call center offices in Las Vegas, Houston, Chicago and the greater Los Angeles-area from which the defendants, using telephones and email, contacted and communicated with timeshare owners in a scheme to defraud the timeshare owners of money.
The defendants and their employees falsely represented that they had buyers for the timeshare owners interests (either timeshare weeks or points) and solicited fees, ranging from hundreds of dollars to several thousand dollars from each timeshare owner. The defendants falsely represented that the fees were fully refundable at closing and were used to secure the owners’ place in an acquisition involving corporate buyers, as well as to pay for legal expenses such as title searches, estoppel letters and closing costs.
However, closings were not scheduled, purported sales did not occur and no payments were made to timeshare owners for the sale of their property, nor have there been payments by corporations (or other buyers) to The Jariv companies for the purchase of timeshare properties.
The defendants and employees of the Jariv companies did not devote their resources to marketing the timeshare owners’ properties and simply pocketed the advanced fees paid by the timeshare owners with a sizeable percentage of the money used to pay telemarketers. Jariv and his family members kept the balance of advance fees to be deposited into bank accounts controlled by them and frequently transferred it to personal bank accounts or other unrelated corporate bank accounts.
Between Feb. 1, 2011, and Jan. 31, 2012, the defendants deposited into eight bank accounts approximately $6,925,137.04 in fraudulently-obtained timeshare owner funds. Some victims reversed the charges or withdrawals, leaving approximately $5,945,433.04 in victim funds in possession of, and subsequently transferred into, other accounts controlled by the defendants. The funds in the eight victim deposit accounts were all traceable to payments received from victims.
As a result of pleas from all charged defendants, the U.S. has recovered more than $2 million for restitution to victims, many of whom are more than 55 years of age. Money judgments in both the civil forfeiture action and the criminal cases have been obtained to assist the United States in recovering the balance of the $5,945,433.04 restitution that is expected to be a part of the sentences.
The fraud conspiracy conviction carries a maximum imprisonment of 20 years in federal prison. However, because the wire/mail fraud involved telemarketing that involved 10 or more victims older than 55, federal law provides for an additional 10-year-sentence after the one imposed for the underlying conviction. Jariv also faces up to 20 years imprisonment for the money laundering conspiracy.
James Jariv is set for sentencing July 27, 2015, while the co-defendants are set for Aug. 17, 2015. Originally on bond, James Jariv was taken into custody following an arrest for an unrelated fraud scheme in Nevada. He will remain in federal custody pending sentencing.
The convictions are the result of an investigation conducted by the Houston Division of U.S. Secret Service (USSS) and Internal Revenue Service – Criminal Investigation with assistance by Las Vegas USSS, FBI and San Francisco Environmental Protection Agency. Assistant U.S. Attorneys Martha Minnis and Katherine Haden are prosecuting the case.