The Oregon Department of Consumer and Business Services has fined American-, Mexican-, and Panamanian-based companies in the amount of $2 million for unlawfully soliciting funds from Oregon residents in a timeshare fraud scheme. The parties sold unregistered securities involving timeshares in Mexico’s Yucatan Peninsula. The Oregon residents, many of them elderly, lost more than $5 million.
“It’s unfortunate that many elderly Oregonians lost their hard-earned retirement funds by unwittingly investing in this scheme,” said David Tatman, DFCS division administrator. Those considering property investments should do their due diligence and research, keeping an eye out for any potential “red flags”, which is this case, was a lack of information and details. “Investors received almost no information about the company involved, especially their capitalization and operating histories,” Tatman said.
Some of the companies involved were: Yucatan Resorts, Resorts Holdings International, and World Phantasy Tours. Michael E. Kelly, the founder of the fraudulent activity and Ruttenberg and Associates Financial Marketing, the sales company, were also assessed a $300,000 fine.
Oregon’s Division of Finance and Corporate Securities (DFCS) advises consumers to conduct their own research to determine if the financial professional is licensed and how they are licensed. State licenses are not “one-size-fits-all.” To check call DFCS toll-free in Oregon at 1-866-814-9710, or go to www.dfcs.oregon.gov.
For questions or concerns outside the state of Oregon, contact the Office of the Attorney General for your state. At this time it has been reported that ten other state securities regulators have filed or concluded civil action cases against the independent salespersons involved in this timeshare ponzi scheme.