Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 1 of 10 Page ID #23
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA,
Plaintiff,
vs.
Criminal No.
Title
18
FILED
NOV
2 0
2013
CLERK, U.S. DISTRICT COURT
SOUTHERN DISTRICT OF ILLINOIS
EAST
ST.
LOUIS OFFICE
JASON
FALKNER,
aka Dominic Ferrara,
aka Jayson Walker,
aka Jason Silver,
)
)
)
)
)
)
)
)
)
)
)
)
)
United States Code, Section 1349
Defendant.
INDICTMENT
THE
GRAND
JURY
CHARGES:
I.
Introduction
1.
Beginning on or about June
17,
2010, and continuing until on or about July 13,
2011, in the Illinois Counties
of
St. Clair, Madison, Clark, Franklin, Jasper, Massac, and Saline,
within the Southern District
of
Illinois and elsewhere,
JASON
FALKNER,
defendant herein,
conspired with others known and unknown to the Grand Jury to conduct a telemarketing
timeshare resale scheme targeting timeshare owners throughout the United States, Canada and
other countries.
2. These conspirators, including
JASON
FALKNER,
falsely represented that they
had found buyers for the consumers' timeshare interests and solicited fees
of
up to several
thousand dollars from each consumer in purported pre-paid closing costs and related expenses.
The promised sales did not occur, closings were never actually scheduled, and the conspirators
did not successfully sell any consumer's timeshare interest. Instead, the conspirators simply
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 2 of 10 Page ID #24
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pocketed the fees, with a substantial portion going to individual telemarketers like JASON
FALKNER
The balance was kept by the owner
of
the company.
3. Between December 5, 2007, and approximately July
13,2011,
the conspirators
collected approximately $6 million and victimized thousands
of
consumers throughout the
United States, Canada and other countries.
No
fewer than eight (8) victims were located within
the Southern District
of
Illinois, representing seven
of
the district's 38 counties.
II. The Scheme
4. The conspiracy
was
conducted primarily out
of
office space located at 1650 Sand
Lake Road, Suite 200, Orlando, Florida.
It
later moved to 7550 Futures Drive, Suite 207,
Orlando, Florida. Throughout its existence, the conspiracy operated under the following
corporate entities, all
of
which
were registered in the State
of
Florida as limited liability
companies:
A. National Solutions LLC ("National Solutions"),
which
also did business as
Blue Scape Timeshares International, Country Wide Timeshares, Countrywide Timesharesales
MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun
Property's, Universal Propertys, and
VIM
Timeshares. National Solutions used a mail drop at
11310 S. Orange Blossom Trail, Orlando, Florida, as its registered address.
B. Landmark Marketing
LLC
("Landmark Marketing"), which also did business
as Blue Scape Timeshares, Country Wide Timeshares International, Propertys DRK, Quick Sale
Advisers, Quick Sale International, and University Propertys International. Landmark Marketing
used a mail drop at 2223
SW
13th
Avenue, Miami, Florida, as its registered address.
2
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 3 of 10 Page ID #25
C.
Red Solutions LLC ("Red Solutions"), which also did business as City Resorts
and Resort Advisors.
D.
Enterprise America, LLC ("Enterprise America"), which also did business as
American Timeshares, Exit Week, and Resort Advisors International, and which used a mail
drop at 11310
S.
Orange Blossom Trail, Suite 156, Orlando, Florida, as its registered address.
E.
Investments Group
of
Florida, LLC ("Investments Group"), which also did
business as Resort Advisors AM.
F. MultiGlobe LLC ("MultiGlobe"), which also did business as Universal
Propertys and which used a mail drop at 1750 Sand Lake Road, Orlando, Florida, as its
registered address.
5.
Using these business fronts, collectively referred to as "National Solutions,"
FALKNER and other conspirators engaged in a scam intended to deceive consumers into
believing that these timeshare resale companies had obtained firm and binding offers from
purchasers to buy that consumer's timeshare interest.
1
6.
FALKNER and other conspirators would contact consumers through unsolicited
telemarketing calls, typically targeting consumers whose timeshare properties had been listed for
sale with other timeshare resale companies. In contacting these consumers,
FALKNER and
other conspirators often already had information about the consumers' timeshare properties, such
as the properties' names and locations, which they would use in their conversations with
timeshare owners to foster the illusion that they were calling on behalf
of
a legitimate company.
1
As used in this indictment, "timeshare" refers to a type
of
fractional interest in real estate in which the owner has
the right to occupy particular premises for a specified period
of
time. What constitutes a "timeshare" depends upon
the law
of
the state in which the real estate
is
located.
3
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 4 of 10 Page ID #26
7.
FALKNER and other conspirators would begin a typical telemarketing call by
representing that they had a buyer for the consumer's timeshare property. In many instances,
conspirators would tell the consumer that the purported buyer was willing to pay an amount
of
money that was at or near the consumer's asking price.
8.
After confirming that the consumer was interested in proceeding with the sale,
FALKNER and other conspirators would then explain that the consumer had to pay an up front
fee
for the sale to proceed. In some instances, consumers were told that this fee was required as
an "earnest money deposit" to ensure that the consumer committed to sell the timeshare property.
In other instances,
FALKNER and other conspirators represented that this fee was required to
pay for various sale-related expenses, such as closing costs, document processing fees, or title
search fees. Regardless
of
the reason given, FALKNER and other conspirators reassured
consumers that the fee would be refunded at closing.
9.
National Solutions telemarketers elicited fees that ranged between $1,000 and
$3,150. They ordinarily solicited a money order or a cashier's check, to be mailed to the
company by overnight delivery. At times, National Solutions also accepted payment by check
draft and credit card.
10.
To further deceive consumers into believing that the transactions were legitimate,
FALKNER and other conspirators often represented or implied that the sales transaction would
be reviewed and approved by the Federal Trade Commission. Any implication that National
Solutions complied with laws administered by the Federal Trade Commission was wholly false,
as the practices ofNational Solutions telemarketers constituted massive violations
of
the
4
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 5 of 10 Page ID #27
Telemarketing Sales Rule, Title16, Code ofFederal Regulations, Part 310, and
ofthe
Federal
Trade Commission Act, Title 15, United States Code, Sections
41
et seq.
11.
Believing that National Solutions had a buyer for their timeshare property and that
the fee would be refunded at closing, many consumers agreed to proceed with the sale. These
consumers were then transferred to, or subsequently received a telephone call from, another
National Solutions telemarketer for verification purposes. National Solutions recorded portions
of
these verification calls. In at least one instance, the telemarketer conducting the verification
call represented that she actually worked for the Federal Trade Commission.
12.
Conspirators would then mail, email, or fax the consumer a list
of"steps"
that
needed to be completed before the closing could occur. These "steps" related to the payment
of
the
fee
and were the same as what many consumers already had been told on the telephone, for
example:
1.
Get a certified check for the amount
of
$1
,500 made out to
BLUE SCAPE PROPERTIES. In Memo put
(REF#2873HARV)
2.
Fax back a copy
ofthe
check to 702-442-5155. ATTN:
M.CHANDLER
3.
Overnight the check to:
Blue Scape Timeshares
2961 Industrial Road
SUITE#610(CLOSING DEPT)
Las Vegas, NV 89109
4. GO TO THE POST OFFICE GET A
(sic) OVERNIGHT
EXPRESS TRACKING NUMBER FROM THE POST
OFFICE.
5.
PLEASE CALL ME WITH TRACKING NUMBER TO GET
YOU VERIFIED
5
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 6 of 10 Page ID #28
13.
In addition to these "steps," consumers were also sent a contract with identifying
information about themselves and their timeshare property.
14.
Below the identifying information, the contract stated: "TOTAL COST FOR
PROCESSING UNTIL YOUR PROPERTY
IS
SOLD AND/OR RENTED:" followed by the
total amount
of
the fee. Conspirators described the contract as the "sales agreement" or "seller's
document" and instructed consumers to sign and return it immediately. By the time they
received this contract, most consumers had already paid the conspirators' fee by ovemighting a
money order or cashier's check.
15.
Contrary to the representations that had been made by FALKNER and other
National Solutions' telemarketers, the contract consumers received did not relate to a pending
sale
of
their timeshare property. Instead, it provided only that conspirators would advertise the
consumer's timeshare property for sale or rent. For example, the contract included the following
language in fine print:
I understand and acknowledge the following:
Blue Scape Timeshares
is
an advertising company. The property
owner pays a one-time, non-recurring advertising fee. Our advertising
program pools the advertising resources
of
our customers to get the
exposure needed to sell and/or rent your property. Our company
forwards all inquiries and offers on your property directly to you, and
allows you to negotiate the sales or rentals
of
your property .without
the involvement
of
any real estate brokers, and without the expense
of
any commission. Our company is not involved in any negotiation for
the sale or rental
of
your property, but
we
will assist and guide you in
the process to the best
of
our ability. [
...
] This advertising agreement
can be terminated with a written request (we must receive the request
within 7 days
of
sign up, as your advertising begins within the first
48
hours). [
...
]
6
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 7 of 10 Page ID #29
---------------
16.
Many consumers signed and returned the contract without reading the fine print.
Consumers who noticed the advertising language and called the company to complain were told
by
FALKNER and other conspirators to ignore the fine print
-that
it was merely a standardized
form contract. These consumers were further reassured that the buyer was ready to proceed and
that the closing date already had been set. Relying on these representations, many consumers
who were initially skeptical were persuaded to sign and return the contract.
17.
After receiving consumers' payments and signed contracts, conspirators often did
not contact the consumers again. The promised date for the closing
of
a consumer's timeshare
property typically passed without any further contact from conspirators.
18.
When disappointed consumers would call, FALKNER and other conspirators
employed a series
of
tactics to stall for time. For example, consumers were sometimes not
permitted to speak to the telemarketer who handled the initial call and were told that the
telemarketer was unavailable, out
of
the office, or busy helping other customers. Consumers'
requests for return phone calls usually went unanswered. When consumers were able to speak to
someone, they were put
off
by a series
of
lies, all
of
which were designed to convey the
impression that, despite some unforeseen delay, the sale
of
the consumer's timeshare was still
proceeding. Sometimes, the excuse for the delay was that some paperwork still had to be
completed or mailed. Other times, it was that there was a problem with the buyer's financing.
No matter what the bogus excuse, the purpose was the same: to instill a false sense
of
hope
so
that the consumer would be temporarily persuaded not to file a complaint or seek a refund.
19.
Eventually, however, the lies would grow thin, and many consumers, realizing
that they had been deceived, demanded the return
of
their money. These complaints usually
7
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 8 of 10 Page ID #30
·---·-----~---
went unanswered, and consumers' demands for a refund were routinely denied or simply
ignored. Because consumers often had paid the upfront fees by money order or cashier's check,
instead
of
by credit card, they usually could not reverse or cancel the transaction and had little
recourse to get their money back.
20. The established and highly successful sales pitch that
FALKNER and other
conspirators used contained materially false pretenses, representations, and promises, including
that (a) there was a buyer willing to pay a specified price for the consumer's timeshare property;
(b) the upfront fees were for deed and title searches, maintenance profiles, deed preparation, title
transfer costs, or similar expenses; (c) the upfront fees would be refunded to the consumer at
closing; and (d) the consumer's transaction was being reviewed and approved by the Federal
Trade Commission.
21. The representations made in the sales pitch used by conspirators were false and
fraudulent in that the offers on the consumer's property were a fantasy, the closing dates were
totally make believe, and the purported purpose
of
the fees a pure invention by the telemarketer.
The fees were not being used for closing costs, but were being stolen to enrich the conspirators
and to pay for continuing expenses associated with the scam.
22. The sales practices
of
the conspirators were false and misleading. The business
fronts used by the conspirators were permeated with fraud in an industry pervaded by deceit.
23. In connection with the transactions described in this Indictment, conspirators
engaged in a scheme involving deceit and trickery in order to gain an unfair and dishonest
advantage over victims located in the Southern District
of
Illinois and elsewhere throughout the
United States and Canada.
8
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-~~--------------~-~-·
--------------
COUNTl
Conspiracy to Commit Mail and Wire Fraud
18
u.s.c.
§1349
24. The previous paragraphs
of
the indictment are realleged and incorporated herein.
25. Beginning on
or
about June 17, 2010, and continuing until
on
or
about July 13,
2011, in the Illinois counties
of
St. Clair, Madison, Clark, Franklin, Jasper, Massac, and Saline,
within the Southern District
of
Illinois and elsewhere,
JASON FALKNER,
aka Dominic Ferrara,
aka Jayson Walker,
aka Jason Silver,
defendant herein, together with others both known and unknown to the Grand Jury, using various
business fronts, did knowingly and willfully combine, conspire, confederate
and
agree among
themselves and with each other to commit certain offenses against the United States, as follows:
A.
To
devise a scheme and artifice to defraud and to obtain money and
property
by
means
of
false pretenses, representations and promises, and for the purpose
of
executing the scheme, and attempting so to do, to knowingly cause to be sent and
delivered
by
the United States Postal Service and by commercial interstate carrier, mail
matter to and from residents
of
the United States, including residents
of
the Southern
District
of
Illinois, and to and from offices in the State
of
Florida, in violation
ofTitle
18,
United States Code, Section 1341.
B. To devise a scheme and artifice to defraud
and
to obtain money and
property
by
means
of
false pretenses, and for the purpose
of
executing the scheme, and
attempting to do so, to knowingly cause to be transmitted by means
of
wire or radio
communication in interstate and foreign commerce, interstate telephone calls, credit card
9
Case 3:13-cr-30263-MJR Document 4 Filed 11/20/13 Page 10 of 10 Page ID #32
transactions, electronic fund transfers, and signs and signals, to and from offices in the
State
ofF
lorida, in violation
ofT
itle 18, United States Code, Section 1343 .
. 26. In furtherance
of
and as a foreseeable consequence
of
the conspiracy, conspirators
caused contracts and other documents to be transmitted by U
.S
. Mail or by interstate
comm<:
rcial
carr
ie
r
to
t
he
Southern District
of
Illinoi
s.
27. In
fu
rtherance
of
and as a foreseeable consequence
of
the conspiracy, conspirators
caused interstate telephone calls to
be
placed to the Southern
Di
strict
of
Illinoi
s.
All
in
violation
of
Title
18
, United States Code, Section 1349.
The offense occurred in connection with the conduct
of
telemarketing, in violation
of
th
e
SCAMS Act, punishable under Title
18
, United States Code, Section 2326(
1).
A TRUE BILL
---
~
'sn:PH~
IG
G~
United States Attorney
Recommended Bond: $25,000 unsecured bond
10
