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Virginia USA Timeshare News: December 6, 2014

It's Happy Hour at The GateHouse >> EASTERN USA TIMESHARE NEWS:

NEWPORT NEWS: It’s taken a looong time, but 56-year-old accused timeshare scam artist Keith D. Kosco has finally been arrested and is going to have to face the music for his alleged sins. He was arrested by the FBI Nov. 20, 2014 when entering the USA from Mexico via Miami; as of this date he is still in the Federal Detention Center facility in Miami awaiting extradition to Virginia, where an arrest warrant and indictment await him.

Keith KoscoWord is the corporate offices in Williamsburg are shut down, all accounts are frozen, nobody got paid and the entire staff was let go.

The charges against Kosco are serious: One count of Conspiracy to Commit Mail and Wire Fraud; 10 counts of Mail Fraud; 8 counts of Wire Fraud; and 5 counts of Aggravated Identity Theft.

Also named in the indictment is Julie L. Duffield, on 21 counts involving mail and wire fraud.

Kosco, who has long been well known for his bogus travel clubs, is also a poster boy for the timeshare disposal/transfer scam industry, working especially with timeshare resorts in Mexico for several years. Hold on to your hat while I list some of the companies with which he is associated in the travel, tourism and timeshare businesses:

  • Resort Realty, Inc.,
  • Resort Solutions, Inc.,
  • Resort Rental,
  • K&K Property Consultants,
  • Auction America
  • Resort Rentals International,
  • Royal Elite Vacations,
  • Royal Equity Transfer,
  • Exotic Equity Transfers, LLC, (also doing business as Elite Equity Transfers),
  • Royal Elite Exchanges,
  • Resort Rentals Mexico,
  • Resort Advantage International,
  • Timeshare Auctions USA,
  • Resort Rentals Worldwide,
  • Grand Premier Vacations,
  • and Priority Exchange Network.

It’s the disposal/transfer business, primarily associated with Elite Equity Transfers and Resort Solutions, that has gotten him arrested. Settle into your chair with a tall bevy to read the details of the indictment against him; you’ll find it all below the squiggly line.

squiggly

GENERAL ALLEGATIONS ACCORDING TO THE INDICTMENT:

From in or about at least 2005, through in or about at least the end of 2013, Keith David Kosco owned and/or operated a number of entities involved in the travel, tourism and timeshare business, including those I’ve listed above. He operated many of those entities out of an office location in Williamsburg, VA within the Eastem District of Virginia. At various times, overlap existed in terms of the employees, operations and services offered by those various entities. Additionally, from in or about 2003 through in or about 201 3, Kosco was the signatory on over thirty bank accounts related to certain of those entities and others, and then transferred funds between accounts associated with the various entities.

Exotic Equity Transfers, LLC, operating as Elite Equity Transfers (“EET”), was one of the entities owned and/or operated by Kosco. Since at least in or about 2007, EET was in the business of transferring ownership of timeshare units that were wholly owned (not mortgaged) by an owner or ‘grantor’ to a new owner or ‘grantee.’ EET conducted timeshare transfers in exchange for a fee charged to the original owner.

Resort Solutions, Inc., (“RSI”), was another entity owned and/or operated by Kosco since approximately June 2005. RSI was in the business of providing advertising and marketing services for individuals seeking to sell or rent their timeshare unit. RSI offered services in exchange for an advance fee charged to the owner.

Here’s the dirty business he offered developers of timeshare resorts in active sales, and you’r probably pretty familiar with this especially if you’ve ever worked in Mexico (or purchased a timeshare from any of several resort companies). Kosco offered to accept all trade-in timeshare units identified in conjunction with the sale of a new timeshare unit by a resort developer to an individual owner. AKA the “phony table buy-back”, this stunt has been rampant in Mexico for nearly two decades and Kosco has been right at the forefront of it.

Here’s how it worked: If an individual customer who already owned a timeshare sought to purchase a new timeshare unit from a resale or retail developer, the customer was presented with options for their existing timeshare unit. The customer could trade in the existing timeshare unit as part of the purchase, using the services of EET, which would then “transfer” the unit to a new owner or “grantee.” Alternatively, the customer could advertise the existing unit for sale or rent using the services of RSI.

Got it so far?

According to the indictment, Kosco advertised the bundled services of RSI and EET to various resort companies. In doing so, he claimed to have created in EET one of the largest and most successful trade-in companies in the world and claimed success at transferring over 28,000 properties as of August 2012 and almost 50,000 as of September 2013. He claimed that resorts had a sales and closing increase of 15-1 8% using EET and that EET’S success was a sales tool to overcome objections if a potential buyer of a new timeshare unit already owned too many timeshare units, as EET could accomplish transfers of such units, thus, removing the timeshare obligations of the original owners.

In truth and fact, however, EET did not accomplish the number of transfers claimed by Kosco.

The pairing of the services provided through EET and RSI allowed Kosco to offer resort companies the complete service of trade-ins of timeshare units, through either the transfer of the unit to a new owner (which resulted in the original owner receiving no sale or rent proceeds) or through the advertising for sale and/or rental of the unit. Though the RSl business was the far more profitable entity in terms of payments received, the companion services provided by the EET business were a necessary aspect of what Kosco offered to provide to developers of timeshare resorts and supported the RSI business model.

Beginning in at least 2009, according to documents, and extending through 2013, a business practice of EET, as directed and engaged in by Kosco and Duffield, their employees and others, was to use the names of stolen identities and straw owners as the new owners or grantees for the transferred timeshare units.

The category of stolen identities consisted of individuals who did not consent and were not even aware that their names were being used to receive timeshare units.

Straw owners were individuals who agreed to have timeshare units transferred into their names for a fee paid by EET, without full knowledge of the consequences of such practice, but who were unable and unwilling to meet the obligations of timeshare ownership, particularly making payments on maintenance fees.

The straw owners did not pay for the timeshare units and though they were made responsible for maintenance fees and taxes for the units acquired, the straw owners exercised no rights of control or ownership over the units placed in their names. On the rare occasion that a timeshare unit placed in the name of a stolen identity or straw owner was sold or rented, it was EET that conducted the transaction and benefited from any proceeds of a sale or rental.

Kosco and Duffield, their employees and others accomplished the transfers of timeshare units into the names of stolen identities and straw owners by having a fraudulent deed and contract produced to document the sale, sending those documents by mail to be signed by the previous owner and then mailed to the resale company. The deed identified the previous owner as the “grantor” and the new owner as the “grantee” for the timeshare unit. Deeds also stated (either expressly or by reference to covenants or other documents) that grantees agreed, as a condition of the transfer, to the incidents of timeshare unit ownership including the payments of current and subsequent maintenance fees (sometimes including or referring to real estate taxes).

And get this: Kosco and his employees engaged in various transactions using the names of the stolen identities and straw owners, including using post office boxes, opening bank accounts, establishing email accounts and having tax returns prepared in the names of a stolen identity.

Eventually things started going sideways as resorts began to catch on to the specious transfers and stopped accepting them, forcing the gang to make alternate arrangements. At one point, in September 2013, following notification that a certain resort would not accept any more transfers to two straw owners, Kosco began to fraudulently use the identity of his daughter, as a grantee. His daughter was unaware and did not consent to transfers made into her name.

Yeah. But it gets worse.

In October, 2013, Kosco obtained a draft power of attorney for his daughter for a particular piece of property then jointly owned by them. Kosco then altered this power of attorney to be a general power of attorney and attached a signature page from his daughter from July 2013 that was related to the specific piece of property owned by them. Kosco then caused the forged signature of his daughter to be made on various deeds and transfer paperwork related to timeshare unit transfers.

The government is asking for forfeiture of lots of property, such as:

1. A monetary judgment in the amount of at least $683,959.50, which represents the proceeds of the offenses.
2. A 2002 Harley Davidson FXDW G M otorcycle with Vin number 111D1GEV132Y323864 and registered to Keith Kosco.
3. A 2008 Lexus G5350 with Vin number J7-14CE965580013736 and registered to Keith Kosco.
4. Real Property and improvements located at 335 McLaws Circle, Williamsburg, Virginia titled in the name of Cannm Marketing, LLC (Keith Kosco).
5. Chesapeake Bank account number 13581640 in the name of Exotic Equity Transfers LLC (Keith Kosco).
6. Chesapeake Bank account number 13566994 in the name of Resort Realty Escrow (Keith Kosco).
7. Chesapeake Bank account number 13594602 in the name of Exotic Equity Transfers LLC (Keith Kosco).
8. Chesapeake Bank account number 13585948 in the name of Grand Premier Vacations LLC (Keith Kosco).
9. Chesapeake Bank account number 13594599 in the name of Priority Exchange Network LLC (Keith Kosco).
10. Chesapeake Bank account number 13594610 in the name of Priority Exchange Network LLC (Keith Kosco).
11. Chesapeake Bank account number 13562778 in the name of Resort Rentals International LLC (Keith Kosco).
12. Chesapeake Bank account number 13590623 in the name of Grand Premier Vacations LLC (Keith Kosco)
13. Chesapeake Bank account number 13590836 in the name of Resort Advantage Int. LLC (Keith Kosco).
14. Chesapeake Bank account number 13588831 in the name of Resort Advantage Int. LLC (Keith Kosco).
l5. SunTrust Bank account number 0000700008934 in the name of Resort Solutions Inc. (Keith Kosco).
16. SunTrust Bnnk account number 1000009210849 in the name of Keith D. Kosco.
17. SunTrust Blnk account number 701073675 in the name of Keith D. Kosco.
18. SunTrust Bank account number 700009361 in the name of Canam M arketing LLC (Keith Kosco).
19. Bnnk of America account number 435026688518 in the name of GPV Int’l LLC (Keith Kosco).
20. JP Morgan Chase account number 834094815 in the name of Julie Duffield.

The indictment also refers to “others known or unknown” to the Grand Jury, which makes me wonder whose names might be added to the indictment in the future.

Do the resorts/companies offering that type of service to timeshare owners in Mexico know that they’re fraudulent? You bet they do, and if they protest their innocence (“we’re not responsible for third party programs”) they’re talking out of both sides of their mouths.

Whew! Stay tuned!


“If you haven’t got anything nice to say about anybody, come sit next to me.” –Alice Roosevelt Longworth

Do you have tips or rumors you’d like to share (ANONYMOUSLY)? Something you’d like us to investigate or follow up on? CONTACT: [email protected]

Permanent link to this article: http://www.insidethegate.com/gatehouse/2014/12/virginia-usa-timeshare-news-december-6-2014/

7 comments

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  1. vsan23

    I got the same inquiry from International Financial Partners Inc. asking to sell my timeshare in Mexico for a substantial amount of money- which leads me to believe it’s a scam.
    ________________________________________________________________________________
    International Financial Partners Inc. is leading the industry for resale and rental of Luxury and Commercial Properties. Our reputation carries a name of delivering easy and successful property transfers. Companies worldwide, from every type of business choose us as the agents for purchasing and renting properties to provide sufficient time and space for everything from corporate functions, luxury accommodations for weekend executive getaways, and corporate acquisitions. International Financial Partners Inc. takes care of the transfer process from start to finish for corporate acquisitions, luxury condos for getaways, and for conference and event coordinators, from large corporations to small businesses.
    At International Financial Partners Inc., we currently have a purchaser under contract who has made a valid offer for your property. International Financial Partners Inc. will act as intermediary purchasers prior to the transfer of your property to the new owner(s). Above you will find the purchase offer as discussed with your agent, Alison Black. Please verify that the property description is correct, and if the purchase price meets your expectations, sign at the bottom, and fax or email this back to us. Feel free to contact us if you have any questions in regards to this purchase offer.
    **List any additional or bonus amenities attached to your contract.
    ** If you have already reserved your weeks for 2015 please make sure to inform your agent.
    **In signing this document, it in no way infringes on or relinquishes your rights as Owner(s) of the above described property. This document is only a letter of intent.
    ____________________________




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  2. Anonymous

    I have been approached by “International Financial Partners Inc.” (Aaron Hoffman and Raymond Lawrence), located in Diamond Bar California, to sell a fractional ownership unit at “Tres Rios” resort located near Cancun Mexico. They are acting as a broker or “transactional Buyer”. They say the buyer is a Mexican investor,”Exportadora de Sal S.A. de C.V.”located in Guerrero, Mx. The escrow company handling the money collections and transfers, acting on the buyers behalf, is Craig Crofton ,agent for “Investment Capital Group Mortgage”, located in Burlingame, California.The whole transaction has gotten very complicated supposedly because of dealing with the Mexican government. Everything looks very official and legit but I’m starting to have serious trust issues. Does any of this ring a bell with anyone?




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    1. Lone Star

      Hope you haven’t given them any money yet, it has the hallmarks of a very popular scam being run out of Mexico.




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    2. gatekeeper

      Lone Star is correct. This is a scam. You can read about how it works and how many different names are used by the scammers at this link: Mexico Fraud, where you will find pages and pages of cases similar to yours.

      In your case it is highly likely that the scammers have misappropriated the names of real companies in order to make themselves look legitimate. But be aware of this FACT: The government of Mexico does not require any fees or taxes for the resale of your timeshare. The government does not involve itself in such transactions at all; Mexican timeshares are bought and sold on the legitimate resale market every day of the year without any problems. Do not under any circumstances send those thieves any money!




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  3. Anonymous

    I have been approached by Fairmount Equity Group to sell my timeshare. Do you have any information on this group ?




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    1. gatekeeper

      Fairmount is a fake company. It’s a scam. I’ll be posting more info about them on Saturday (Jan. 31) in the Mexico Timeshare FRAUD section. In the meantime, don’t send them any money!




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