HOUSTON (CN) - A telemarketing ring defrauded 1,000 timeshare owners of $6.9 million by pocketing fees they claimed were needed to find corporate buyers for the timeshares, federal prosecutors said.
Seven of the eight people charged live in Las Vegas, including James Assi Jariv, 62; his 25-year-old son Alexander Jariv; Thresa Lloyd, 42; Varda Jariv, 72; Jiwon Jariv, 33; Ronald Frank Muise, 50; and Michael Derek Muise, 27, the U.S. Attorney's Office said in a statement.
Leon Avedikian, 43, of Los Angeles, was also charged.
All were charged with conspiracy, wire and mail fraud and money laundering, prosecutors said.
"According to the indictment, the Jarivs and other co-conspirators used a number of different named companies to conduct their telemarketing timeshare resale scheme targeting timeshare owners throughout the United States and Canada," prosecutors said in the statement. "The timeshare owners were allegedly solicited to pay advance fees in exchange for The Jariv Companies providing willing buyers for their timeshare properties or points, when in fact, the defendants did not have buyers for the timeshare owners' interests and did not market or sell the property."
The Jariv companies set up mailing addresses in Houston, Seattle, Chicago and Las Vegas to receive payments from timeshare owners, prosecutors said.
"The defendants and their employees falsely represented that they had buyers for the timeshare owners' interests (either timeshare weeks or points) and solicited fees, ranging from hundreds of dollars to several thousand dollars from each timeshare owner," prosecutors said.
"The defendants allegedly falsely represented that the fees were fully refundable at closing and were used to secure the owners' place in an acquisition involving corporate buyers, as well as to pay for legal expenses such as title searches, estoppel letters and closing costs.
"The indictment alleges closings were not scheduled, purported sales did not occur and no payments were made to timeshare owners for the sale of their property, nor have there been payments by corporations (or other buyers) to the Jariv companies for the purchase of timeshare properties."
The Jariv companies "simply pocketed the advanced fees paid by the timeshare owners with a sizeable percentage of the money used to pay telemarketers," prosecutors said, citing the indictment.
"Between Feb. 1, 2011, and Jan. 31, 2012, the defendants would and did victimize approximately 1,000 victims living in Canada and throughout the United States including the Southern District of Texas, and deposited into eight bank accounts approximately $6,925,137.04 in fraudulently obtained timeshare owner funds," prosecutors said. "Approximately $5,945,433.04 in victim funds were retained by, and subsequently transferred into, other accounts controlled by the defendants."
If convicted, each defendant faces up to 20 years in federal prison on the conspiracy count, and an additional 10 years on the mail and wire fraud charges because their scheme involved 10 or more victims older than 55, prosecutors said.