Once again, get out the popcorn. Especially in the MEXICO section, there’s a lot to digest.
BARBADOS: You know the lovely Crane Beach Hotel overlooking (of course) Crane Beach? It’s a 252-room, high-end shared ownership interests resort located on the south east coast of Barbados. The Crane is the Caribbean’s first resort hotel, opened in 1887 and is now fully restored and expanded.
The owners of the resort, Millennium Investments Limited, are intent on getting BIGGER. Canadian businessman Paul Doyle, who acquired the hotel in 1988, wants to widen its ownership with an initial public offering (IPO) before the end of this year. The company plans to be incorporated as a limited liability company and list on the Trinidad and Tobago and Barbados Stock Exchanges.
Caribbean Information and Credit Rating Services Limited (CariCRIS) stated in a press release that the IPO for The Crane Resorts Limited will be issued for up to US $20 million ordinary shares and US $40 million in preference shares — 8 million shares priced at US $5 each.
What does MIL intend to do with the anticipated funds that could be made available through becoming a public company? CariCRIS noted that management plans to increase existing room stock, grow through acquisitions and commence a resort development.
U.S. VIRGIN ISLANDS: Remember the bill that was passed late last year to allow OPCs to work again in the islands? Previously they had been lumped into the general category of “barkers”, who had been outlawed.
Part 2 of the legislation, under the sponsorship of Senator Shawn Michael Malone, has now been submitted to tighten up the OPC rules & regs. It will be added to the previous bill and with that the islands should have a final and comprehensive law that insures OPCs in the USVI forever and ever amen.
Is it a coincidence that both Marriott Vacation Ownership and Wyndham VO are now proceeding with long-delayed plans to expand their timeshare offerings on St. Thomas? As noted previously, Marriott is readying its plans for the final two phases of the Frenchman’s Cove Resort, and may be close to breaking ground on the project. The 65 additional units are to be completed by 2017. And Wyndham, as previously rumored, is apparently ready to go ahead with its multi-million-dollar renovation of the Grand Beach Palace Hotel.
Word on the street is that both are already hiring OPCs for next high season.
There are a lot of good reasons to consider the USVI for investing in a timeshare resort or two (or three). Not the least of those reasons are the corporate/LLC level tax advantages; under the Virgin Islands Economic Development Commission (EDC) regulations, if you move your company there and create 10 local tax paying jobs you avoid 90% of all U.S. Federal Corporate taxes for 10 years. And St. Croix has a new hotel development tax credit in addition to the EDC program.
Also, you wouldn’t pay the IRS there, you’d pay the IRB. Lots of positives with that, too. AND there is no sales tax or “end of year State/Territory” tax.
Add to that the OPC tours from the 1.5 million tourists that hit just the small downtown of Charlotte Amalie every year, a relative paucity of timeshare resorts in the islands, the need for more business investment (which creates an amenable business environment), and the convenient fact that everyone speaks English…
Not to mention how drop dead gorgeous it is there.
At any rate, this is all good news not just for the industry, but for all those timeshare owners and future timeshare owners who have fallen in love with the USVI. As one local wag put it, “We’re prime pickings here!”
PUERTO VALLARTA: If you own a timeshare in Mexico and someone calls you to tell you they can get you out of that timeshare, put your tinfoil hat on. ESPECIALLY if/when you are asked to wire money to an escrow account in Mexico. This is a hot and very profitable scam running in Mexico, and if you send money you will never see it again. AND you will still own that Mexican timeshare. The part that really stings is that most of those scams seem to be operated by American and Canadian expats. DO NOT, I repeat DO NOT SEND THEM ANY MONEY!!!
Earlier this year a company called All Net Escrow was on the radar, with a phony address in Idaho, which appeared to be working with a non-existent Oklahoma company called Castle Wealth Management. I did some research and found a name associated with the All Net Escrow website; the person named, who lives in the general Puerto Vallarta area, objected strenuously in a comment, as is his right, and I let the whole thing go. Well, All Net Escrow’s website is long gone, and a quick look online found that Castle Wealth Management’s website has also disappeared.
Since that time my investigation has expanded and numerous reports from the Vallarta area have also reached me, with descriptions of the “recovery” scams and pleas for help to stop them. Names were named. Details were given. So here’s what I’ve put together to help explain what’s going on. Are you ensconced in your comfy chair? Got your popcorn and a beverage? Good. Let’s begin.
The folks allegedly running these frauds have a very slick operation in various locations in and around Puerto Vallarta, mostly Bucerias. Every 2 to 3 months they change the domain names for the marketing company and the escrow company. If they start getting too much heat from the web, it is a short run. If things are going well they run it longer.
The initial contacts are made from a call center to solicit interest in selling their timeshare property. Lists of timeshare owners are purchased from people who work or worked at timeshare resorts. Of course, there is no obligation and no upfront fee to get someone to sign a listing agreement. Numbers are inflated and there is supposedly a potential corporate buyer in Mexico who will take it off their hands as long as they qualify. Once someone faxes or scans a listing it goes back to another center where the second stage begins.
In stage 2 someone from the marketing company contacts them to get all of the details of their property and ownership information. None of this is necessary, but it makes the deal seem real. Copies of deeds and/or contract info is sent to the marketing company.
Once this is accomplished, the marketing company advises the seller that someone from an escrow company will be in touch with them. They are also told that they will have to do a recorded contract call on behalf of the escrow company to make sure that there are no misunderstandings (this is done after the seller receives the welcome info from the escrow company).
The escrow company now makes its initial contact with a welcome call and gives them a website, username and password so they can look at their account and see how much money is sitting there waiting for them. The amount is higher than the sale price because it has been inflated to cover the transfer fee. The fake recorded contract call is usually done the day after they receive their account balance and this is where they are told again that there will be no fees from the marketing company, only a commission after the money changes hands. At this time they are told about the fee of the escrow company and explain that the fee will be reimbursed when they receive their money; in fact if they look in their account, the money should already be there!
This is where stage 3 begins. The escrow company takes over. They call the seller and explain the hows and whys of the fee (international buyer, corporation, etc.) If the seller agrees, they send the wire transfer information to the seller. Done! Once the money is received, the escrow company and marketing companies both stay in touch with the seller so as not to create any fears or remorse until the domains are shut down and then they all disappear.
(NOTE: Often the escrow people will go after a second fee which is explained as taxes or another bogus international fee. It is usually the IVA, which is 16%, and on most occasions people will get hit twice. They are told that if they don’t pay the second fee, they will not receive any money. Most of them pay.)
They then start up all over again with new companies.
Note that the scam laid out above actually seems legitimate to people they initially hire. As they work their way up the ladder they find out it is a scam; at that point some stay, some leave.
The names most often associated with these scams, according to my sources, are: Frank Devellano, a Canadian; John Kerrigan (an American whose name is also associated with such notorious Mexico timeshares as the Belaire Golf Resort & Spa, Castles and Condos, Grand Miramar, World Luxury Destinations, Mondavi, etc.); Ken Sadowski (a Canadian who has reportedly been associated with previous scammy timeshare sales in Mexico); and Steve Nolan (aka Steve Knowles).
And you might find this complaint, Matthew Devellano/Domains by Proxy vs. Desarrollo Marina Vallarta, S.A. DE C.V./Daniel Jesus Chavez Moran of some interest as well. It involves a contested domain name “vidagroupresorts.com”) that was being used “…for a pay-per-click website, including links to competing hospitality, vacation/travel and resort services providers, is evidence of an attempt to capitalize upon and gain revenue from Complainant’s well-known marks. [such as Vida Vacations].” Chavez, founder/developer of Grupo Vidanta, Vidafel, Mayan Palace, etc., wanted that domain name taken away from Devellano.
Chavez won that fight on Oct. 8, 2012, with the mediation panel finding, in part:
Moreover, this Panel considers the fact that Respondent, either by itself of through its client – as Respondent argued in his first response to the Center – is sending emails to Complainant’s clients using the an email address @vivagroupresorts.com, the Domain Name, asking for payments, offering discounts for early payments and even contacting customers by phone to discuss payments is a grave case of fraud and evidence bad faith. This Panel further investigated Complainant’s fraud claim, and found that “Trubaesc Mexico, S.A. de C.V.”, one of the companies whose bank information is forwarded to Complainant’s customers via the @vivagroupresorts.com email address, for customers to deposit certain amounts of money (along with “Global Consulting B1791, S.A. de C.V.”), has been involved in this timeshare fraud before, as seen on the website “www.justanswer.com/law/63wkc-contacted-resort-development-consultants-purchase.html”.
The Panel finds that, by Respondent’s use of the Domain Name, Respondent is intentionally attempting to attract Internet users who intend to access a website operated or endorsed by Complainant to Respondent’s pay-per-click website and that the Respondent must have had the Complainant in mind when registering the Domain Name. Further, Respondent is taking unfair advantage of Complainant’s goodwill by diverting those Internet users to websites including those operated by the Complainant’s competitors.
The Defendant in that case, Matthew Devellano (of Puerto Vallarta, MX), is Frank Devellano’s son, and it was Matthew Devellano who owned the domain for All Net Escrow and who objected so strongly to my revealing that fact.
You can find out more about those people and many more in an article by Jorge Olmos Contreras about Puerto Vallarta Boiler Rooms in Busco en Vallarta (in Spanish, but worth the effort to translate it).
The names of some of the companies that have previously been associated with this type of scam (besides All Net Escrow and Capital Wealth Management) include:
- Wade Capital Management
- Alliance Title Service
- All Star Equity International
- Property Marketing Group
- Grand Luxe Managemet Soutions
- Continental Resources
- Sierra Resort Services
- Gibraltar Escrow
Oh heck, the list is too long. I’ll stop there, for now. But do I give good research or what!
"If you haven't got anything nice to say about anybody, come sit next to me." -Alice Roosevelt Longworth
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