Although there are several scams in the timeshare industry along with the increasing number of owners who are trying to get out of their timeshares every year, many vacationers are still into such vacation properties. Recently in Miami, a father-and-son duo was accused of timeshare fraud. They allegedly bankrolled their lavish lifestyles with $170 million in investors' money, and when investors began to question their activities, they responded with threats and intimidation, as the dozens of lawsuits filed in Federal Court stated.
According to the lawsuit, Frederick Elliott and his son, Derek Elliott, sold timeshares in luxury vacation properties in the Dominican Republic, promising investors a steady and predictable double-digit returns on allegedly safe investments. As the lawsuit stated, Frederick and Derek misused plaintiffs' hard-earned money to finance fanciful Hollywood productions, produce self promotional videos, purchase a half-a-million-dollar yacht, and pay off personal gambling debts in Las Vegas, among other things.
There are about 170 investors who have sued the Elliotts and their complex web of offshore companies and shell corporations that they have created to escape liability. As the lawsuits stated, they treated these entities as one collective 'piggy bank,' taking funds from one company indiscriminately to pay the obligations of another.
The Elliotts base their operations in Miami. According to the investors, they do this because Miami offered a sophisticated banking system with access to international financial markets, and willing bilingual professionals to assist them in their illegal pursuits. Most of their victims were found through presentations on cruise ships where they were invited to speak.
The Elliotts allegedly sold timeshares in some resort properties that weren't finished like a hotel in Juan Dolia, and then rented them out through travel agencies such as Expedia and Travelocity. Timeshare owners were supposed to get a cut of the rent of such vacation property. But in typical Ponzi fashion, the Elliotts used money from new investors to pay the original timeshare purchasers. Among other things, investors accuse the Elliotts and their companies of racketeering, wire fraud, money laundering, civil conspiracy and breach of contract.