WASHINGTON -- A company that allegedly bilked 300 Maryland residents out of hundreds of thousands of dollars by promising to resell their time-share units to Europeans for a fee has been temporarily shut down, federal officials said yesterday.
The announcement stems from a nationwide crackdown on travel fraud, which officials say costs consumers more than $12 billion a year.
Federal and state authorities have filed 36 complaints recently against about 25 companies across the country that allegedly swindled consumers out of their vacation dollars.
Travel fraud "can turn a dream vacation into a frustrating and expensive nightmare," said Jodie Bernstein, director of the Federal Trade Commission's consumer protection bureau in announcing the crackdown, dubbed "Operation Trip-Up."
One of the companies sued by the FTC, Gold Crown Express Inc., operated in Maryland for about two years -- first setting up shop in Columbia in 1994, moving to Hampstead and finally to Reisterstown in 1996, said Betsy Broder, an FTC attorney.
In Maryland, the company operated as Lifestyle Listing Network and Marketing Analysis Sales and Service in Columbia and Hampstead. In Reisterstown, the company was called OCB Resources, said Stephen D. Hannan, administrator of the Howard County Office of Consumer Affairs, which took part in the probe.
The FTC alleges in a suit filed in federal court this month in South Carolina that the company's agents moved around the country -- from Slidell, La., to Port Clinton, Ohio, to Longmont, Colo. -- doing business under different names.
"They would pick up [and move] before people realized they had been victimized," Broder said. She said the company took roughly $4 million from 8,000 customers.
The FTC already has gained a temporary restraining order against the company, and its suit seeks to close it permanently.
Broder said the alleged organizer of the scheme -- William Ernest Taft of South Carolina -- was arrested on criminal fraud charges last month, with about 10 others. Taft's attorney, Marion Farmer of Covington, La., did not return a phone call seeking comment.
According to Hannan and Broder, the alleged scheme in Maryland worked like this:
Company agents -- posing as agents for an English company called Oscar C. Bradley and Associates -- contacted time-share owners, saying there was strong demand from Europeans for these properties. The company offered to sell the time shares for a good price -- if owners paid fees of about $2,000 in advance.
The company never sold the time shares, or, in some cases, bought them for drastically lower prices than originally offered.
Parkton retiree Richard Malone said yesterday he lost $2,210 to the company last year after he received a call from its agents offering to sell his one-week time-share in a resort condominium in Bryce, Va., for $20,000 to English buyers.
Malone said he agreed to the offer because he used the condominium for skiing only once a year for 10 years. The offer was twice what others had told him it is worth, he said.
After he sent the company $2,000, agents told him they needed $210 more to conduct a deed search. Malone said he complied.
The company then said it had a buyer and sent him a questionnaire asking how he wanted to be paid. The envelope -- sent to England -- came back marked "Address Unknown," he said.
"It's a scam," Malone said. "I'd like to put them out of business and get some of my money back."
Bernstein cautioned consumers never to pay advance fees for selling their time-shares and warned against viewing them as investments.
"If it really sounds too good to be true, you ought to be suspicious," she said.
Pub Date: 3/14/97