CHICAGO: Do any of you remember the notorious Michael E. Kelly, who was running a giant timeshare Ponzi scheme out of Cancun, MX several years back? In the end, he swindled more than 7,000 people (most of them elderly) out of nearly $500 million.
At one time he was a big enough hotshot in timeshare land to be scheduled as a speaker at an ARDA annual convention, in spite of repeated warnings from some within the industry that he was a crook (including the old “Timeshare Beat” website, which flogged him regularly). I don’t know if he showed up for that convention, but a few months later the Feds snatched him at the Mayo Clinic where he had gone for medical tests for a heart ailment or something. They arrested his sorry a$$ in his hospital room on December 22, 2006 just before he was about to be discharged to return to one of his homes in Cancun.
In pretrial services, Kelly claimed that he only earned $55,000 a year and had only $48,000 in assets (the lying sack of crap!). In spite of this claim, Kelly offered a private jet, four yachts and race track as collateral at his detention hearing. He was denied bail and remanded to the Metropolitan Correctional Center, Chicago, where he’s been languishing ever since. At first Kelly attempted to avoid indictment by arranging a plea agreement that included paying restitution to the victims, but that didn’t work out. On 14 May 2008, he pled not guilty to 14 counts of fraud and was remanded in custody. So far only about $50 million of the money he stole has been recovered, and in the meantime many of his elderly victims have died.
ANYhow, I just learned that he’s getting out of jail soon. Heck he might be out already. He’s a very sick man, you see.
Now 63 years old, Kelly and the Feds agreed to a plea deal in which he would plead guilty to one count of securities fraud and on Dec. 13 he was sentenced to 5 years in prison (one year less than he’s already served).
As part of the sentencing, Kelly agreed to, and Judge Guzman ordered, restitution totaling $342,143,221, minus any credit for funds distributed by the court-appointed special master overseeing the liquidation of Kelly’s assets.
Before imposing the five-year sentence, Judge Guzman granted Kelly’s request to be released temporarily under home incarceration, with global position electronic monitoring, for up to four months or no longer than necessary to receive medical treatment for colon cancer at his own expense without using any investor or government funds. Then he has to go back to jail. Kelly’s relatives co-signed a $10 million signature bond and posted properties in Lakeville, Indiana, and Double Springs, Alabama, to secure his release.
The judge was reluctant to release him at first, saying he wanted reassurances from Kelly’s probation officer before signing off on it. According to an article in The Post-Tribune:
Though Kelly — who sat in a wheelchair throughout a lengthy hearing Wednesday — told the judge he is gravely ill with advanced heart disease as well as cancer, Guzman said “I’ve seen sicker people than this get up and walk away.”
Noting that only $50 million of the $340 million Kelly allegedly stole has been recovered, that Kelly has dual Mexican and American citizenship and has previously lived abroad, the judge added that he didn’t want to receive a “frantic phone call” saying that Kelly had fled the U.S. while under house arrest.
Prosecutors agreed to the plea agreement because they wanted to make sure the restitution deal was sealed before he died and his heirs could interfere.
Kelly still faces 13 additional counts of mail, wire, and securities fraud, which remain pending until they are resolved by a trial or a second guilty plea at a later date. If convicted of those counts, Kelly will be subject to substantial additional terms of imprisonment.
You can get the gory details from the FBI’s press release: Michael E. Kelly Pleads Guilty in First Stage of Resolving $500 Million Timeshare Ponzi Scheme
ALSO IN CHICAGO: There appears to be another timeshare resale scam floating around that involves the wiring of funds to an “escrow” account in Mexico. The method and paperwork are identical to the fraud I detailed last week in the Mexico section of International News, only the names are different.
So why am I placing this in Chicago? Because the company involved, Lakeview Property Management, claims its address to be 330 N. State Street, Suite 842, Chicago, IL. There’s a problem with that, though. The only business at that address is a 10pin Bowling Lounge.
Another problem is that the company’s website claims Lakeview has been in business since 1991 (originally in Arizona) and bears a copyright date of 2010; but there is no corporation by that name registered in Arizona and the domain name for the website itself was not registered until Oct. 2012.
A quick look through the State of Illinois’ corporate records finds only one company by that name (an LLC) and that company was involuntarily dissolved in 2010. So at the very least it would appear that they are not licensed to do business in either Arizona or Illinois.
There are glowing testimonials on the site, too. Funny thing, though; they are identical to testimonials on at least 4 other timeshare resale-related websites (click on the screen capture at the left of a google search I made for one of those testimonials). Coincidentally(?), each of those 4 websites bears a strong resemblance to the other 3, though not to Lakeview Property Management’s website (except for those testimonials).
Very sloppy work, that, for all five websites. I may have to do some research into those other four companies, too.
The names I know of that are associated with Lakeview Property Management are:
- John Pearson (Financial Director)
- Gary Willard (Project Director)
- Eric Lopez (Agent)
Their website’s domain name is registered to Luis Alvarez in Zapopan, Jalisco, Mexico.
They use BBVA-Bancomer for international electronic bank wire transfers, with the beneficiary being GRAND GROUP DI ALMARESCO SA DE CV. (with a Mexico City address). The beneficiary bank (where the money victims wire is deposited to be picked up by the representative of Grand Group di Almaresco) is a BBVA-Bancomer-Mexico bank in Puerto Vallarta.
This is a heads up for timesharers who own at Mexican resorts. If Lakeview Property Management or any other such company contacts you with a promise of a buyer for your timeshare (at a price far above its actual worth), be very suspicious! Nearly everything they’ll tell you will be a lie!
"If you haven't got anything nice to say about anybody, come sit next to me." -Alice Roosevelt Longworth
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