The "Corporate Block" Lie: 74-Year-Old Timeshare Telemarketer Sentenced After Jury Trial

What happened?

On February 4, 2016, the U.S. Attorney's Office for the Southern District of Illinois, part of the Department of Justice (DOJ), announced that U.S. District Judge Nancy J. Rosenstengel sentenced Elpenike Eddy-Aldava, 74, of Las Vegas, to one year and one day in federal prison. She was also ordered to pay $647,015 in restitution.

A jury in East St. Louis convicted her on October 9, 2015, after a four-day trial, of conspiracy to commit mail fraud and wire fraud.

How the scheme worked

According to the trial evidence:

• For more than 5 years, Eddy-Aldava worked as a telemarketer for a Las Vegas business that kept changing names. The two main names were Showcase Resorts and Vacation Max.
• Telemarketers called timeshare owners around the country offering to help sell their timeshares.
• They falsely claimed to have corporate buyers interested in buying blocks of timeshares, with the owner's unit included.
• To join the "corporate block," owners had to pay upfront fees, usually $2,000 to $3,000, supposedly for closing costs.
• The fees were just revenue for the company. Telemarketers got commissions of 40% to 50% on each fraudulent sale.
• There were no corporate buyers. No timeshare was ever sold to a corporation.
• "Updaters" handled calls from customers asking why nothing had sold. Their job was to give false excuses and keep victims from going to their credit card companies for refunds.

The scam ran from at least December 5, 2006, to January 24, 2012, and generated more than $11 million in losses.

The owner of Vacation Max, Michael Patrick Sullivan, was indicted in May 2013, pleaded guilty and was sentenced to 5 years in prison. Telemarketers John Nicosia and Robert Kelly Mathews and updater Patrick Nosack pleaded guilty and were sentenced to prison. Telemarketer Rebecca Marrs was set to go on trial in April 2016.

Here's the thing ...

A 74-year-old telemarketer. Not the owner. Not the manager. Just a person reading the script and collecting a fat commission.

And she went to federal prison.

That's the lesson for people working the phones. "I just read the script" doesn't protect you if you know the script is a lie. A 40% to 50% commission on a fake closing cost is a pretty big hint.

And the updaters? Their whole job was stalling people so they wouldn't file chargebacks. That's not customer service. That's part of the fraud.

What to do this week

• Sales reps: if your pitch promises buyers you've never seen, walk away.
• Owners: never charge upfront fees for a timeshare sale that hasn't happened.
• Customer service teams: give honest status updates, even when the news is bad.
• Timeshare owners: If you're asked to pay closing costs before a closing, it's a scam.