For a while there it seemed the timeshare scammers were winning but it appears the tide is changing with recent arrests, indictments and convictions in several fraudulent timeshare schemes in Florida and New Jersey.
During the heyday of timeshare resale fraud in Florida scams peaked in 2010 when the Florida Attorney General’s Office received 12,257 timeshare resale complaints. Complaints have been on the decline since with the Florida state law cracking down on such fraud as well as criminal prosecutions.
The Sun Sentinel in Florida recently reported that to date, 41 people have been charged in one of the largest timeshare resale fraud schemes in the state of Florida. With nicknames like “Fat Patsy,” “Bowling Ball” and “Patty Boy” it sounds like an episode from The Sopranos but it’s not. The people hired as telemarketers (known drug addicts and people with criminal backgrounds) were employed to work the phones by Timeshare Mega Media and Marketing Group (TMMMG), a Ft. Lauderdale based timeshare resale company accused of ripping off people nationwide in a $5 million scam. Of the 41 indictments, twenty-three people have plea bargained, two are awaiting trial and one has died.
The scenario is pretty much the same regardless of where, who or what the name of the company is running the operation. Telemarketers contact timeshare owners and claim to have buyers for the owners unwanted vacation rentals. The hitch is this – the owner has to come up with amounts of up to $10,000 up front in order to secure the deals. In the case of TMMMG, Federal authorities have been unable to find a single instance in which they actually had a purchaser for the timeshare.
One of the two convicted felons accused of running the company, Pasquale “Posh” Pappalardo, was arrested recently in his Coral Springs home. According to federal prosecutors, Pappalardo would boast about having ties with organized crime and twice had meetings with a representative of the Gambino organized crime family to discuss timeshare resale operations. His attorney adamantly disputes the allegations. He is also accused of using violence or the threats of violence to intimidate people.
Pappalardo is charged with conspiracy to commit fraud and conspiracy to commit money laundering. A conviction on either charge could carry up to 20 years in prison. This is not however his first encounter with the law as Pappalardo has done federal prison time before, serving more than six years in the mid-1990s on drug, firearms and counterfeit money charges.
In another related article, the Sun Sentinel reported on a recovering alcoholic who promises to pay back the dozens of elderly people across the country that he scammed during 2010 and 2011 in a Delray Beach based fraudulent timeshare scheme.
Gerald William Clarke, while testifying in Palm Beach County Circuit Court and asking for probation instead of a prison sentence, stated “I was extremely reckless and extremely careless.” He went on to say, “I really, really thought I was getting into this business to help people.”
However, the Circuit Judge hearing the case which concluded Tuesday, said Clarke must pay for his crimes by being locked up for five years, followed by five years of probation and full restitution.
In December, Clarke pleaded guilty to one count of money laundering, 72 counts of grand theft and three counts of petit theft. The scam had 75 victims and losses of more than $103,000 over a period of a year.
The victims were individuals who previously lost money to firms masquerading as timeshare resale businesses, according to court records. These victims were approached by callers from Clarke’s operation and told that in exchange for hundreds of dollars in upfront fees, they could get restitution checks from the Florida Attorney General’s Office.
Florida isn’t the only State bringing timeshare scam operators into custody. In Camden, New Jersey a federal grand jury for the District of New Jersey returned a 44-count superseding indictment against six individuals from southern New Jersey and four others for their alleged roles in a $3 million mail and wire fraud conspiracy involving timeshare mortgages.
The Vacation Ownership Group (VO) investigation revealed that from approximately March 2009 to September 1, 2011, the defendants, through the VO Group, participated in a fraudulent scheme in which representatives of the VO Group called owners of timeshare vacation properties purchased from Flagship Resort Development, Wyndham Vacation Resorts Inc., and other timeshare developers and convinced the owners to submit money to the VO Group, purportedly to pay off their “mortgages” on their timeshares.
The VO Group claimed that the timeshare owner could pay off the mortgage balance at a substantially reduced amount—often by as much as 50 percent of the amount of the owner’s original mortgage—by mailing payment to the VO Group. The VO Group representatives also persuaded timeshare owners to send the VO Group money purportedly to have their timeshares cancelled or sold. Rather than paying off the timeshare owner’s mortgage, cancelling the owner’s timeshare, or selling the timeshare, the conspirators kept the timeshare owner’s money for their personal use.
According to the complaint, during the course of the investigation, law enforcement officers interviewed approximately 225 victims of the conspirators’ scheme identified to date. Many of the victims are elderly, causing them to be more vulnerable to the scheme. The indictment states that law enforcement has determined that the conspirators defrauded the victims of more than $3 million.
A former employee of The Vacation Ownership Group LLC admitted to conspiring to defraud owners of timeshare properties by offering owners of timeshares consulting services, including timeshare cancellation services. The employee states he was trained by VO Group managers to call customers using a prepared script and regularly lie to customers. The employee would call customers and falsely state that he was calling in response to a complaint they had made to timeshare developers and lenders. He gave customers the false impression that he was working for Wyndham Vacation Resorts, a developer of timeshare resorts and then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled.
In addition, he falsely told some customers that their credit would not be damaged if they stopped paying for their timeshares and even gave some customers “references” who were actually VO Group employees posing as satisfied customers. After hearing these false representations, some customers sent checks to the VO Group, including one customer who sent the VO Group a $31,385 check. The employee admitted to causing more than $70,000 in losses.
I have written numerous articles addressing what to look for, and what to avoid, with regard to buying a timeshare resale or selling your timeshare. Here’s a quick reminder:
- Start with trust – visit bbb.org to check out the BBB Business Review for any company you are considering doing business with
- Beware of upfront fees – any related costs to the purchase of a timeshare will be handled at the closing
- Read the fine print of any contract – whether buying or selling
- Never wire cash to anyone – for any reason
- Get all the information regarding the buying or selling of a timeshare in writing
- Check the license of the business you are in contact with for the purchasing of, or selling of a timeshare interval
- Remember, if it sounds too good to be true, it is!
Advantage Vacation is a licensed timeshare resale brokerage located on the island of Maui. We specialize in Maui timeshare resales and Hawaii timeshare resales of name brand timeshares.
We can assist you in purchasing Hilton timeshare resales on the Big Island, the island of Oahu or elsewhere in the US. We also have Marriott timeshare resale listings on Maui, several of the other Hawaiian Islands and the US. If you are a fan of Westin, we would be happy to assist you with the purchase of a Westin timeshare resale.
Advantage Vacation is a member of the American Resort Development Association (ARDA) and offers the best buys on the timeshare resales market today. We never charge an upfront fee for clients who want to sell a timeshare and only receive a commission, paid from escrow, when the transaction is closed.
We are leaders in the timeshare resale secondary market, have been in the timeshare industry for over 30 years and are Accredited Members of the BBB with an A+ Rating.
Advantage Vacation is using Twitter and Facebook to help educate people on the changes in the timeshare industry along with current timeshare tips, up to date timeshare news and timeshare FAQ’s.
We hope you will follow us and our blog, Timeshare Blogging by Advantage Vacation for the latest timeshare news and reviews. If our site does not answer your question or questions, please email us your question and we will answer it and add it to our library. Make your voice heard – what questions do you have?
At Advantage Vacation you can be assured you are working with professionals who believe that honesty and integrity are the most important aspects of the business they are in – timeshare resales. Our business has been built on relationships and we pride ourselves on providing excellent service to our clients.
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