Telephone-Based Fraud Schemes
In addition to mail-based fraud schemes, the department has pursued telemarketing schemes that targeted the elderly. For example, a common telemarketing scheme involves the purported resale of timeshare interests. The fraudsters, who target elderly victims who own timeshare interests, falsely claim to have buyers for victims’ timeshare interests and express the need to move quickly on the deals. They solicit fees from the victims of up to several thousand dollars, claiming they are for pre-paid closing costs and related expenses and such fees will be refunded at the time of closing. The sales never occur and the fraudsters pocket the money for their own personal gain.
On July 10, 2014, Peter Massimino was sentenced for conspiracy to commit mail fraud and wire fraud in connection with a scheme to defraud elderly individuals who owned timeshares. The U.S. Attorney’s Office for the Southern District of Illinois, working with investigators from the FTC and the USPIS used the Senior Citizens Against Marketing Scams (SCAMS Act) – which requires courts to sentence defendants to an additional five years’ imprisonment for telemarketing-related crimes against victims over the age of 55.
Specifically, Massimino solicited fees (purported to be pre-paid closing costs and related expenses, some of which would be returned at closing) from the victims of up to several thousand dollars and claimed that he would use marketing firms to advertise the timeshares. The sales did not take place, closings were not scheduled as claimed and Massimino did not sell any of the victims’ timeshare interests as promised.
While this case involved one defendant and 68 victims, the matter was part of a multiple-victim timeshare resale scam operating from Florida that led to the victimization of 25,500 people and total losses of $35 million. Massimino was ultimately convicted and sentenced in July 2014 to 87 months in prison.
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More recently, on Feb. 2, the U.S. Attorney’s Office for the Northern District of Illinois worked closely with investigators from the FTC and USPIS to successfully prosecute Gilbert Freeman for a timeshare scheme in which the majority of victims were elderly. Freeman defrauded more than 1,400 owners out of $4.8 million by falsely promising that he would sell their Mexico timeshares to corporate buyers. Freeman and others collected payments from the owners for fictitious fees and taxes that he claimed were required to complete Mexican real estate deals and that he promised would be refunded upon closing. In reality, Freeman had no intention of selling the timeshares or reimbursing the owners. Freeman was sentenced to 20 years in prison for his role in this scheme.
