BOCA RATON, Fla. - Five people are accused of participating in a boiler room scam based in Boca Raton and Boynton Beach that bilked $2.6 million from timeshare owners across North America, according to a criminal complaint unsealed in federal court Tuesday.
The fraudulent telemarketing operation preyed on timeshare owners, inducing them to fork over closing fees for what they were told was the impending sale of their timeshare, according to the complaint.
The victims were convinced not to worry — that their money would be returned to them after the completion of the sale.
The whole thing was a deception, according to the complaint, which was written by an FBI special agent.
"There were neither closings nor purchases of any timeshares as promised by the telemarketers in their telephone calls and contracts," the complaint alleges. "Virtually all of the money received by the scheme was pocketed by the organizers and telemarketers."
Joshua Barrett Hoskins, John James Fenimore, Michael T. Dignelli,, Sr., John F. Macpherson and Garry Anthony Brown are accused of conspiring to commit mail and wire fraud in connection with the alleged scam. Each charge brings a maximum of 20 years in prison.
The complaint details how the scam played out:
Telemarketers referred to as "openers" or "fronters" would contact the timeshare owners by phone.
The opener's job? To coax the owner to sell their timeshare. Callers would claim that their company was either prepared to buy the timeshare, or that they had arranged a buyer for the timeshare.
If the victim showed interest, they would be forwarded to a "closer."
The closer's job? To negotiate the "sale" and close the deal. The closer would discuss the terms of the contract and upfront fees, then send a fraudulent contract by mail, e-mail or fax to the victim.
At this point, the victims were instructed to mail or transmit their "upfront fees." They were told that the closing would occur in a few weeks.
At which point, nothing happened.
According to the complaint, two victims in California were told by Hoskins that he would buy their unused vacation weeks for $24,000.
Hoskins then allegedly told the victims that a $3,200 fee would be required to complete the sale. On his instructions, they mailed a check to National Timeshare Liquidators in Boca Raton.
Reached by phone on Wednesday, Hoskins had nothing to say when asked to comment on his alleged role in the fraud.
Alleged to have been a closer who used fake names to bamboozle victims, Hoskins hung up when asked about the allegations.
He made $326,000 in the scam, investigators said.
The scheme operated under the guise of a half dozen corporations registered with the Florida Department of State, among them Transatlantic Timeshares LLC, Euroamerican Timeshares, LLC and E.A.T. Sales, LLC.
The laundry list of LLCs was no accident, investigators said.
"The conspirators frequently changed the name of the company after just a few months," alleges the complaint, which was filed July 31 but unsealed Tuesday after Brown's arrest. "This change of name aided their evasion of law enforcement scrutiny."
Hoskins and Fenimore both allegedly tried to sound more credible by identifying themselves as the "director of sales."
Some of the telemarketers also mentioned the operation used Royal Title Services, which, investigators said, was actually a "fictitious company created by co-conspirators."
Fenimore made $304,124, Dignelli raked in $26,975, Macpherson got $7,711 and Brown pulled in $32,205, according to the complaint.
The term 'boiler room' refers to a telemarketing office that employs high-pressure tactics to defraud victims who will never receive the promised services.
In July, West Palm Beach man Michael J. Ferrari was sentenced to five years for his role in another Palm Beach County boiler room operation that stole $3.3 million from timeshare owners across North America.
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