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Eastern USA: October 8, 2011

Are you sick and tired of reading about timeshare resale scams yet? Imagine how the victims feel…

Joshua Butcher, courtesy of Palm Beach County Sheriff's Office

FLORIDA:

DELRAY BEACH: Joshua Butcher, 25, has been arrested on charges of money laundering, grand theft, and fraud related to a timeshare resale scam. His alleged victims come from Texas, Illinois, Tennessee and Indiana, and possibly other states as well. He is suspected of swindling mostly elderly victims across the country out of more than $60,000 by promising to have purchasers for their unwanted timeshares. Of course he didn’t.

Authorities were tipped off when a detective from Pasadena, Texas, called Delray Beach police about a woman who lost $10,500 to a company called First Purchase Investments in Deerfield Beach. The checks she sent were deposited at a Bank of America branch in Delray Beach.

An investigation followed, culminating finally in Butcher’s arrest on Oct. 6. He was released from the Palm Beach County Jail that evening on $27,000 bail. I don’t know yet about his future court dates.

FORT LAUDERDALE: And yet another timeshare resale scam in Florida bites the dust, this one considerably larger than Josh Butcher’s. On the same day that Josh Butcher was arrested, federal mail and wire fraud charges were filed against 13 members of Timeshare Mega Media and Marketing Group, a telemarketing resale outfit that allegedly raked in millions of dollars between 2009 and 2010 by defrauding timeshare owners.

According to the U.S. Attorneys Office in Miami, the group called owners of timeshare units and told them they had buyers for their properties. They would tell the owners to send $1,996 to the company for fees associated with the sale of the unit, then would stall on giving a closing date for the transactions to make it more difficult for owners to obtain refunds.

Of course there were never any buyers, and the FTC, which also has filed a lawsuit against the company, said earlier this year that they knew of no successful timeshare sales arranged through Mega Media. If convicted, the defendants each face a statutory maximum 5-year prison term and a fine of up to $250,000.

An FTC press release about these con artists issued in November, 2010 identified the perpetrators at that time as: Timeshare Mega Media and Marketing Group, Inc., also doing business as (d/b/a) Timeshare Market Pro, Inc.; Timeshare Market Pro, Inc.; Tapia Consulting, Inc.; Joseph Crapella, also known as Joseph John Philbin; Pasquale Pappalardo; Lisa Tumminia Pappalardo; Pasqualino Agovino; Louis Tobias Duany; and Patricia A. Walker.

The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan and the defendants are scheduled to make their first appearances in court on Oct. 11.

UPDATE October 10: The names of the 13 people being charged are:

  1. Scott Faraguna, 41
  2. Charles Blomquist, 52
  3. Peter Borkowicz, 31
  4. Raymond Harcar, 39
  5. James Taylor, 23
  6. Ryan Greene, 23
  7. Jason Hampton, 28
  8. Chris Faccone, 43
  9. Steven Sokoloff, 47
  10. Marco Sguera, 30
  11. Joseph Giancola, 38
  12. Ryan Soltow, 27
  13. Donna Ackermann Brown, 50

They are charged in a one-count Criminal Information with conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371.

TALLAHASSEE: And since we’re talking about timeshare resale fraud in Florida, Attorney General Pam Bondi has unveiled a legislative initiative that will protect consumers from timeshare resale fraud, the number one complaint that the Attorney General’s Office has received for the past two years. The bill strengthens existing laws by addressing unfair and deceptive marketing and advertising practices by timeshare resale companies.

The proposed legislation includes the following provisions:

  • A timeshare resale advertiser may not misrepresent a pre-existing interest in the owner’s timeshare.
  • A timeshare resale advertiser may not mislead a customer as to the success rate of the advertiser’s sales.
  • A timeshare resale advertiser may not provide brokerage or direct sale services.
  • A timeshare resale advertiser must honor a cancellation request made within 7 days following a signed agreement.
  • A timeshare resale advertiser must provide a full refund by a timeshare owner within 20 days of a valid cancellation request.
  • A timeshare resale advertiser must not collect any payment or engage in any resale advertising activities until the timeshare owner delivers a signed written agreement for the services.
  • A timeshare resale advertiser must also provide a full disclosure statement printed in bold type, with no smaller than a 12-point font, and printed immediately preceding the space provided for the timeshare owner’s signature.
  • A timeshare advertising agreement must be put in writing.
  • A company who violates these provisions has committed a violation of the Unfair and Deceptive Trade Practices Act with a penalty not to exceed $15,000 per violation.

So what do you think? Assuming the legislation is passed, will it help stem the tide of timeshare resale fraud? Not?

TENNESSEE:

NASHVILLE: In a scam of another sort, Big World Vacations is in trouble— AGAIN. This time three Nashville residents, Molly Clark and Harry Whittaker and his wife, have filed separate lawsuits against the company, its principals and several affiliates for allegedly defrauding them out of thousands of dollars. Nashville attorney Brian Manookian is representing both plaintiffs, and a Nov. 7 court date has been set in both cases.

I’ve covered Big World before (See the Tennessee heading in Eastern USA News for Sept. 17) and even among bogus vacation clubs they’re really something else.

Get this: According to the complaint, Big World promised substantial travel discounts for its members, who paid several thousands of dollars for the privilege. What they got was a user name and password to access Big World’s website, which turned out to be a privately branded affiliate of *Travelocity. In other words, they paid all that money for something they could have accessed themselves through Travelocity’s website at no extra charge.

Anyhow, Clark and the Whittakers each are seeking triple damages plus attorneys’ fees from Big World and two of its principals: Peter D. Milana of Westin, Fla., its president; and Tammy Damron, a local realestate agent.

Big World actually operates as an enrollment center for Williamsburg VA-based Royal Elite Vacations, aka Grand Premier Vacations and Royal Elite Exchanges, which were also named in the lawsuits along with Keith Kosco, its CEO; and Tina Williams, its president, as defendants.

So I suspect that the privately branded website mentioned in the lawsuit belongs not to Big World, but to Royal Elite Vacations et al. Right? I wonder if Travelocity is aware that they are being used for such highly unethical and immoral purposes? I wonder how many other bogus vacation clubs/enrollment centers might be doing the same thing??? I wonder if the plaintiffs in this case are aware that all the money they spent for becoming members went to a company (Big World) that has nothing at all to do with actually fulfilling their travel desires?

*...World Choice Travel, is a privately branded one that enables partners to customize the look and feel of their site using the Web's most powerful suite of online booking products. World Choice Travel is the most popular online private-label travel partner program in the world due in large part to this unique relationship. . The WCT-Travelocity revenue share is generous and our partner support leads the industry. There are no upfront fees for our technology, and implementation is quick and easy!

MARYLAND:

BETHESDA: Marriott International has released its third quarter 2011 financial report and of course I’ll ignore most of it and go straight to the results from its timeshare segment, which is what interests us the most.

In the third quarter, Timeshare segment contract sales increased $15 million to $179 million from segment contract sales of $164 million in the year-ago quarter. In the third quarter, 43 percent of timeshare contract sales came from new customers compared to 37 percent in the year ago quarter. Average contract price improved 45 percent year-over-year while volume per guest increased 10 percent in the third quarter.

Timeshare sales and services revenue, net of expenses, declined $20 million to $36 million largely due to the year-over-year unfavorable impact of a $15 million adjustment to the Marriott Rewards liability recorded in the year-ago quarter and, to a lesser extent, lower interest income on a smaller mortgage portfolio.

Adjusted Timeshare segment results include Timeshare sales and services revenue, net of direct expenses, as well as base management fees, gains and other income, equity in earnings (losses), interest expense and general, administrative and other expenses associated with the timeshare business.

Adjusted Timeshare segment results for the 2011 third quarter totaled $22 million and included $10 million of interest expense related to securitized Timeshare notes. In the prior year quarter, Timeshare segment results totaled $38 million and included $12 million of interest expense related to securitized Timeshare notes.

So how many of you numbers types already have your calculators out? 😉


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