CONTACT

Katie Mitzner / Communications Director

Better Business Bureau of Southern Colorado

Telephone: 719/636-5076 Ext. 118

Fax: 719/636-5078

Email: katiem@bbbsc.org

An arrest has been made in the Hawaiian vacation scam that bilked more than $60,000 from Colorado residents. The Better Business Bureau of Southern Colorado first alerted the media to this vacation scam back in October when the Bureau received word from the BBB in Hawaii that they were receiving numerous calls of inquiry from Colorado residents about a business by the name of Vacation Properties International. Local residents reported that they heard about a great Hawaiian vacation deal through an advertisement in The Gazette and The Denver Post, had paid out money to this company for deposits on their vacations, but never received tickets for their Hawaiian vacation.

Yesterday, in Sacramento, California, two individuals were charged with mail fraud in connection with this Hawaiian vacation scam. According to the U.S. Attorney’s office, the couple, Sheryl Denise Davis, 50, and Daniel Wallace Smith, 43 previously of California and Nevada were indicted by a Federal grand jury on September 30, 2004, and charged with mail fraud. The indictment was sealed until December 13th to avoid the flight of the defendants. The couple was arrested on November 21, 2004, at the Silver Legacy Hotel and Casino in Reno, Nevada without incident.

According to the Assistant United States Attorneys, the defendants are charged with 14 counts of mail fraud, which includes a sentencing enhancement because the crime involved telemarketing fraud. The defendants are alleged to have engaged in schemes to defraud, including advertising vacation packages, hotel accommodations, car rentals, gift certificates and other services in major newspapers throughout the country.

The defendants offered vacations in locations such as Hawaii, Las Vegas and advertised hotel stays at chains including Hilton Hotels and Holiday Inn. These ads contained numerous false statements, and instructed customers to send checks and money orders to private postal mail boxes. The defendants were paid for these services, but failed to deliver the goods or services for which they had been paid. As a result of the fraud, the defendants unlawfully obtained more than $202,317.

The current indictment against defendants Davis and Smith does not include the scam that targeted Colorado residents; however the Postal Inspector is working to incorporate this scam into the indictment.

For the mail fraud violations, the defendants face a maximum of up to 20 years imprisonment per count, $250,000 fine, and restitution. The telemarketing fraud enhancement would allow the sentencing judge to include up to five additional years to any term of imprisonment imposed.

This arrest was the result of an extensive investigation by the U.S. Postal Inspection Service that was assisted with information from the Better Business Bureau of Hawaii and the BBB of Southern Colorado.

In the preliminary stages of investigating this scam, the BBB of Hawaii was unable to locate Vacation Properties International. The company advertised that they operated out of a location on Ala Moana Boulevard in Honolulu, yet the company directed all correspondence to an address in Oakland, California. The BBB of Hawaii checked with property management of the Hawaii address but the building never had a tenant by the name of Vacation Properties International. In addition, the company advertised that they were members of the Hawaii Timeshare Bureau and had been recognized by the Hawaii Trade Association, however the BBB of Hawaii was not able to find any evidence that these organizations existed.

Upon further investigation, the BBB of Southern Colorado traced the Colorado checks cashed by Vacation Properties International to an account at World Savings Bank in California. That bank checked the account, listed under the name of Vacation Properties International and determined that in one month’s time more than $62,000 had been deposited into that account. World Savings Bank contacted the U.S. Postal Inspector in Sacramento, alerting authorities for the first time that the scammers had hit consumers in Colorado. Upon notification by the BBB of Southern Colorado, World Savings Bank was able to freeze the account listed under the name Vacation Properties International. Some checks written by Colorado residents were therefore never cashed and some residents did not lose additional money to the scam artists.

When responding to vacation or timeshare opportunities beware of the following red flags:

• Heavily Discounted Offers - if the offer is heavily discounted and sounds “too good to be true”, it probably is.
• Policy Changes -Vacation Properties International informs consumers that their policies have changed and they no longer take credit cards for deposits. Remember when using a credit card you have recourse should the company not provide their services; when using cash or check there is no recourse if you want to try and get your money back.
• A Rush Offer - companies will often put a deadline on their offer to try and get you to commit quickly.

Other helpful tips to avoid a ruined dream vacation:

• Read all of the rules of your package carefully.
• Determine all costs involved in booking this vacation. Know exactly what is included, what is excluded and what the taxes are.
• Before traveling, confirm all arrangements directly with the:
• airline, cruise line, etc.
• hotel, timeshare resort, etc. (By requesting descriptive brochures directly from the lodging you may avoid any unpleasant surprises once you arrive.)
• business sponsors such as restaurants or resort attractions offering discount or other coupons.

To arrange an interview with a local consumer affected by this company, contact Katie Mitzner with the BBB of Southern Colorado at 719-636-5076 x118 or 866-206-1094 x118.