Timeshare Scam Prosecutions
Overview: Timeshare Scams
Timeshare scams involve fraudulent schemes related to the sale, resale, or rental of vacation timeshares. Scammers often promise guaranteed resale, high returns, or timeshare cancellations in exchange for upfront fees or misrepresent the value of a property. Key legal frameworks include:
Mail and Wire Fraud (18 U.S.C. §§1341, 1343) – used for schemes involving deception over the internet, phone, or mail.
Federal Trade Commission (FTC) Regulations – address deceptive marketing and unfair business practices.
State Consumer Protection Laws – regulate timeshare sales, resales, and cancellations, often requiring registration and disclosure.
Racketeer Influenced and Corrupt Organizations Act (RICO, 18 U.S.C. §1961) – applicable in organized scam operations.
Common scam types:
Charging upfront fees for timeshare resale or cancellation services and delivering nothing.
Misrepresenting ownership rights or resort benefits.
Selling timeshares multiple times or without legal authority.
Promising guaranteed rental income that never materializes.
Penalties include fines, restitution, license revocation, and imprisonment.
Notable Cases
1. United States v. Thomas L. Carlson (2011) – Timeshare Resale Scam
Jurisdiction: Federal Court, Florida
Summary: Carlson promised to resell timeshares for clients in exchange for upfront fees, but never completed any transactions.
Violation: Mail fraud, wire fraud, and deceptive business practices.
Outcome: 5 years imprisonment; $1.2 million restitution to victims.
Significance: Highlighted criminal liability for charging fees without providing promised services.
2. United States v. VIP Timeshare Network (2013) – Multi-State Fraud Ring
Jurisdiction: Federal Court, Nevada
Summary: Operators ran a nationwide scam offering timeshare resale and rental services, defrauding hundreds of customers.
Violation: Wire fraud, mail fraud, and conspiracy.
Outcome: Sentences ranged from 2–8 years imprisonment; $5 million restitution; assets seized.
Significance: Demonstrated federal prosecution of organized timeshare scam operations.
3. United States v. William D. Ryan (2015) – Timeshare Cancellation Fraud
Jurisdiction: Federal Court, Florida
Summary: Ryan offered “guaranteed timeshare cancellations” for upfront fees but provided no legitimate service.
Violation: Wire fraud and deceptive advertising.
Outcome: 3 years imprisonment; $750,000 restitution to victims.
Significance: Established that charging for services that cannot be legally performed constitutes criminal fraud.
4. State of California v. Horizon Timeshare Services (2016) – Misrepresentation and Fees
Jurisdiction: State Court, California
Summary: Horizon Timeshare Services misled clients about resale guarantees and charged fees upfront.
Violation: California Consumer Protection Law, unfair and deceptive business practices.
Outcome: $2.5 million fine; restitution to clients; injunction against operating in California.
Significance: Reinforced state-level authority to combat timeshare scams.
5. United States v. Angelique B. Morgan (2017) – Online Timeshare Scam
Jurisdiction: Federal Court, Texas
Summary: Morgan solicited victims online, promising resale or cancellation of timeshares in exchange for fees, then disappeared.
Violation: Wire fraud and mail fraud.
Outcome: 4 years imprisonment; $1.5 million restitution; banned from engaging in timeshare business.
Significance: Highlighted the growing prevalence of online timeshare scams.
6. United States v. Global Timeshare Solutions (2019) – International Scam
Jurisdiction: Federal Court, Florida
Summary: Operated a cross-border scheme, targeting U.S. citizens with false promises of resale and rental of timeshares abroad.
Violation: Wire fraud, mail fraud, conspiracy, and international fraud.
Outcome: 6 years imprisonment for main operators; $10 million restitution; international assets seized.
Significance: Showed federal authorities’ capacity to prosecute international timeshare scams affecting U.S. residents.
7. United States v. Richard A. Lopez (2021) – Fraudulent Timeshare Auction
Jurisdiction: Federal Court, Nevada
Summary: Lopez organized fake timeshare auctions, collecting deposits from buyers without providing any property rights.
Violation: Wire fraud, mail fraud, and consumer fraud.
Outcome: 5 years imprisonment; $3 million restitution; assets frozen.
Significance: Demonstrated that auction-based scams are treated with the same severity as direct sales fraud.
Key Takeaways
Mail and Wire Fraud Are Central: Most timeshare scams are prosecuted under federal fraud statutes.
Restitution is Standard: Courts frequently require return of defrauded funds.
Prison Sentences Are Significant: Offenders can face multi-year imprisonment.
State and Federal Cooperation: Both state consumer protection agencies and federal authorities prosecute timeshare scams.
Online and International Scams are Increasing: Courts are actively pursuing scams that use internet platforms or cross-border operations.
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