Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Pasquale Pappalardo, 60, of Coral Springs, Florida, was sentenced today to 20 years in prison, with three years of supervised release, and was ordered to pay restitution in the amount of $1,061,401 and forfeiture of $3,500,000. Pappalardo was previously convicted in November 2013 in federal court in Fort Lauderdale of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349, and conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956. Co-defendant Audwin Lovinsky, 35, of Tamarac, Florida, was also sentenced today to 33 months in prison and three years of supervised release and ordered to pay restitution in the amount of $34,635. Lovinsky was previously convicted of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349.

In all, 41 defendants were charged for their involvement with a timeshare resale telemarketing room called Timeshare Mega Media and Marketing Group Inc. (TMMMG). The other defendants were charged in Case Nos. 11-60190-Cr-Cohn, 11-60247-Cr-Marra, 11-60268-Cr-Hurley, 12-60019-Cr-Scola, 13-60049-Cr-Dimitrouleas, 12-60149-Cr-Scola, 13-60154-Cr-Scola, and 13-60155-Cr-Dimitrouleas. Aside from the two defendants who were sentenced today, 37defendants previously pled guilty, one is awaiting trial, and one is deceased.

According to the evidence presented at trial, in February 2009, Pasquale Pappalardo, also known to the witnesses as “Patsy U’ Patso” and “Posh,” and Joseph Crapella, also known to witnesses as “Joey Cigars,” started a branch office of Time Share Market Pro (TMP), a timeshare resale business. The testimony at trial was that they knew each other from a previous stint in federal prison. In June 2009, at the direction of Pappalardo and Crapella, their associates took customer files and the electronic database of TMP, among other items, without the knowledge of the owner of TMP.

Pappalardo and Crapella then took the employees and the documents seized from TMP and formed a second timeshare resale company called TMMMG. In November 2009 and January 2010, TMMMG hired salesmen who worked for other fraudulent telemarketing resale companies, including defendant Lovinsky, who used the phone name of Edwin Lovins. Among the lies they would tell timeshare unit owners was that they had sold their timeshare units and that they needed to pay a refundable fee to secure the sale. The salesmen would then ask the timeshare unit owners for a fee of at least $1,996 and as much as $10,000. At no time were there any buyers for the timeshare units. The testimony at trial was that both Pappalardo and Crapella were told about the lies being told by the salesman, but Pappalardo and Crapella would not do anything to stop the salespeople from lying.

During the 10 months that TMMMG was in business, it fraudulently obtained approximately $5,000,000 from about 3,000 customers. Pappalardo received at least $300,000 in checks and hundreds of thousands of dollars in cash from the money sent by victims of TMMMG.

Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer would also like to recognize the assistance provided by the Fort Lauderdale Police Department, the Federal Trade Commission, and the Broward Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.

The South Florida Sun Sentinel has published an article updating the government prosecution against the owner of Timeshare Mega Media for timeshare related wire fraud. Joseph Crapella aka "Joey Cigars" and his mother are the most recent people facing criminal charges for this timeshare resale scheme that allegedly scammed more than four million dollars from desperate timeshare owners.

The Federal Trade Commission has already obtained a $2.7 million dollar judgement against the company, but now alledged con artists could also face serious jail time for related charges. A single  count of conspiracy to commit wire fraud can result in up to five years in prison.

Many of the companies employees have already been prosecuted.

The Federal Trade Commission has announced a legal settlement with a south Florida couple who allegedly operated a deceptive telemarketing scheme that victimized consumers hoping to sell their timeshares.  Pasquale Pappalardo and his wife, Lisa Tumminia-Pappalardo, agreed to settlements with the FTC that permanently ban them from telemarketing and engaging in timeshare resale services. The settlement is a result of investigations into the group, which operated under a variety of names, and the first court filings named Timeshare Mega Media and Marketing Group, Inc., d/b/a Timeshare Market Pro, Inc.; and Timeshare Market Pro, Inc along with numerous individuals as defendants. The individual cases are still pending.

According to the FTC's complaint, filed in October 2010, the defendants conned consumers by promising that they had buyers lined up and waiting to buy the consumers' timeshares. The defendants charged consumers an up-front fee, usually $1,996, but promised a full refund upon closing of the timeshare sale. The FTC alleged that, after the consumers paid the fee, they were told to expect a contract from Timeshare Mega Media. What they received turned out to be a contract to market and advertise their timeshare, and not a sales contract, and many consumers signed and returned the contract thinking it was a sales contract, the complaint alleges. Those who questioned its validity allegedly were given the run-around by the company and falsely told that a sales contract would follow. In fact, according to the FTC, the company never had any timeshare buyers lined up and never actually assisted anyone in selling a timeshare. When consumers discovered this and demanded their money back, they found it nearly impossible to get a refund, or even get a call back. The Commission estimates that in the 20 months the defendants operated, thousands of consumers were defrauded out of at least $2.7 million. In October 2010, a federal court halted the operation and froze the defendants' assets, pending resolution of the case.

In addition to banning the Pappalardo's from telemarketing and engaging in timeshare resale services, the settlement orders announced permanently prohibit them from misrepresenting any product or service, selling or using customers' personal information, failing to properly dispose of customer information within 30 days of the orders, and attempting to collect payments from past customers.

The order against Pasquale Pappalardo imposes a judgment of almost $2.7 million, which will be suspended when he surrenders the proceeds from the sale of a condominium. The full judgment will become due immediately if he is found to have misrepresented his financial condition. The court also entered a $2.7 million default judgment against Timeshare Mega Media and Marketing Group Inc., Timeshare Market Pro Inc., Tapia Consulting Inc., Joseph Crapella, Pasqualino Agovino, Louis Tobias Duany, and Patricia A. Walker.

The NBC News affiliate out of Miami is reporting that thirteen individuals have been charged in a telemarketing scheme operating under the business name of Timeshare Mega Media and Marketing Group, Inc.  If convicted, 13 Timeshare Mega Media and Marketing Group, Inc. employees involved in the alleged timeshare scam could face time in federal prison and monetary damages up to $250,000.

The group operated under a variety of names, and the first court filings named Timeshare Mega Media and Marketing Group, Inc., d/b/a Timeshare Market Pro, Inc.; Timeshare Market Pro, Inc.; Joseph Crapella a/k/a Joseph John Philbin; Pasquale Pappalardo; Lisa Tumminia Pappalardo; Pasqualino Agovino; Louis Tobias Duany; and Patricia A. Walker as defendants.  These individuals are expected to make their first appearance in court on October 11, 2011.

Follows is an excerpt from the article. 

"...Since about October 2009, the defendants, who were employed by Timeshare Mega Media and Marketing Group, Inc. in Fort Lauderdale called owners of time-share units and told them they had buyers for their properties, prosecutors said. They would tell the owners to send $1,996 to the company for fees associated with the sale of the unit, prosecutors said in email statement.

Once the time-share owners agreed to pay the fees, they were contacted by another employee, who would get them to admit on tape that they knew the fee they were paying was for the advertising of their units, and that the company could charge their credit card, prosecutors said.

The defendants were told by co-conspirators not to give the time-share unit owners closing dates for the sale of their time-shares to make it difficult for the unit owners to be refunded, prosecutors said.

To keep the victims from contacting their credit card companies, when unit owners called the company questioning the sale of their units, co-conspirators falsely informed them that the original buyer had a card was not approved, and another buyer was interested, according to prosecutors...."

There is also a detailed description of the charges posted on the FBI website.

The named defendants are Scott Faraguna, 41, Charles Blomquist, 52, Peter Borkowicz, 31, Raymond Harcar, 39, James Taylor, 23, Ryan Greene, 23, Jason Hampton, 28, Chris Faccone, 43, Steven Sokoloff, 47, Marco Sguera, 30, Joseph Giancola, 38, Ryan Soltow, 27, and Donna Ackermann Brown, 50, all of whom are charged in a one-count criminal information with conspiracy to commit mail fraud and wire fraud.

The defendants were all employees of Timeshare Mega Media and are scheduled to make their initial appearances in court Tuesday morning October 11, 2011, in West Palm Beach before U.S. Magistrate Judge Linnea Johnson.

Hopefully this aggressive action by authorities against the individual employees of a timeshare scam will help to discourage others from working in telemarketing centers where this type of fraud is perpetrated.

The Sun Sentinel has published an article providing details of the Federal Trade Commissions lawsuit against the owners and operators of Timeshare Mega Media and Marketing for consumer fraud. 

Follows is an except from the article, but please take the time to read the full article as it sheds light on some of the inner workings and individuals responsible for this type of timeshare scam. 

"....From an unmarked Fort Lauderdale storefront sandwiched between a men's bath house and a dry cleaner, a timeshare resale company raked in money — an estimated $5 million in less than a year.

Founded by two convicted felons who went by "Posh" and "Joey," Timeshare Mega Media and Marketing Group capitalized on cash-strapped people in Florida and beyond, playing on their hopes of unloading their costly vacation rentals, according to federal authorities. A regular chorus of "Congratulations! We have a buyer for your timeshare!" came out of the one-room operation as salesmen pressed clients to put down as much as $10,000 to "lock in a deal," a former employee said in a sworn statement.

"Needless to say, there are no buyers," wrote Federal Trade Commission attorneys in court filings against Timeshare Mega Media. "Consumers receive absolutely nothing for their money. This is naked fraud."

Legal proceedings involving the now-defunct business offer a rare look into the inner workings of a Florida timeshare resale company— a fraud-riddled industry that has become big business in the current economic downturn. The amount of timeshare resale complaints in Florida jumped from 800 in 2007 to 11,509 in 2010, according to the Florida Attorney General's Office.

Since 2009, the Attorney General's Office has reached consumer protection settlements with 16 timeshare resale companies totaling $7.3 million. Another 30 companies are currently under state investigation.

Authorities say many of the unscrupulous resale companies operate the same way: They claim to have a buyer for a prospective client's timeshare or the advertising capabilities to attract one. They demand an upfront fee, sometimes charging people's credit cards before they have even signed off on paperwork. Once the money comes in, nothing ever happens to the timeshares and clients' messages are often unreturned...."

The Federal Trade Commission has filed a consumer protection lawsuit against and alleged timeshare resale scam using the name Timeshare Mega Media and Marketing Group Inc.  The suit also names Timeshare Market Pro, Inc and the principals behind the alleged scam Joseph Crapella aka Joseph John Philbin, Pasquale Pappalardo, Lisa Tumminia Pappalardo, Pasqualino Agovino, Louis Tobias Duany, and Patricia A. Walker as defendants in the legal action.

At the FTC's request, a federal district court has put a stop to a deceptive telemarketing operation that allegedly scammed millions of dollars from timeshare owners hoping to sell their timeshares. The FTC charged that the company conned consumers by promising that they had buyers waiting, and then required the timeshare owner to pay a large up-front fee. After paying the fee, no sale would occur and the consumer would be unable to obtain a refund.

“When cash-strapped consumers are trying to sell their property, the last thing they need is to lose thousands of dollars to scam artists who promise a quick sale, but then provide no services at all,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.

The case is part of an ongoing FTC effort to crack down on con artists who use fraud and deception to take advantage of timeshare owners. According to the FTC, the number of complaints related to fraudulent timeshare resales has more than tripled over the past three years, as more consumers have attempted to sell their timeshares.

If you believe that you have been a victim of consumer fraud or telemarketing violations perpetrated by these companies or individuals, please take the time to report the crime to the Florida Attorney General or by contacting the contact person for this case, William J. Hodor of the FTC Midwest Region, Chicago at 312-960-5634.

As always, consumers should never pay any type of upfront fee to sell a timeshare or to rent an unwanted timeshare week.