Dad & Son Accused of $170M Timeshare Fraud

     MIAMI (CN) – A father-and-son duo bankrolled their lavish lifestyles with $170 million in investors’ money, and when investors began to question their activities, they “responded with threats and intimidation,” according to dozens of lawsuits filed in Federal Court.

     Frederick Elliott and his son, Derek Elliott, sold timeshares in luxury vacation properties in the Dominican Republic, promising investors “steady and predictable double-digit returns” on allegedly “safe” investments, according to the lawsuit.
     “In what has truly become a sad cliché, Frederick and Derek misused plaintiffs’ hard-earned money to finance fanciful Hollywood productions, produce self promotional videos, purchase a half-a-million-dollar yacht, and pay off personal gambling debts in Las Vegas, among other things,” the lawsuit states.
     About 170 investors sued the Elliotts and their “complex web” of offshore companies and shell corporations that they created, uurportedly to escape liability. They treated these entities “as one collective ‘piggy bank,’ taking funds from one company indiscriminately to pay the obligations of another,” the lawsuits state.
     The Elliotts chose to base their scam in Miami, investors say, because “Miami offered a sophisticated banking system with access to international financial markets, and willing bilingual professionals to assist them in their illegal pursuits.”
     Frederick and Derek found most of their victims through presentations on cruise ships, where they were invited to speak, investors claim.
     The Elliotts allegedly sold timeshares in resort properties that weren’t finished, including a hotel in Juan Dolia, and then rented them out through travel agencies such as Expedia and Travelocity. Timeshare owners were supposed to get a cut of the rent, but in typical Ponzi fashion, the Elliotts used money from new investors to pay the original timeshare purchasers, investors claim.
     They also accuse the father-son team of laundering money through WWIN, a “pseudo-banking entity” that the Elliotts created “to comingle both the proceeds of its illicit activities with other legitimate payments,” according to the lawsuits.
     Investors say WWIN paid Victor Cabral, the ex-tourism minister of the Dominican Republic, more than $114,000 “off the books” for his consulting services. Cabral has been sentenced to one year in prison for fraud, according to the complaints.
     Investors accuse the Elliotts and their companies of racketeering, wire fraud, money laundering, civil conspiracy and breach of contract, among other claims.
     They are represented by Hilda Piloto of Arnstein & Lehr.

%d bloggers like this: