Contempt Proceeding Sought Against Alleged Mastermind Behind Vacation Club Schemes
Allegedly Withdrew $480,000 From Bank Accounts in Violation of Court Order; AG’s Office Seeks to Recover Funds
BOSTON - A contempt proceeding has been sought against the alleged mastermind of a bait and switch scheme designed to dupe consumers out of money for fake vacation club memberships, Attorney General Martha Coakley announced today. The AG’s Office alleges the company’s owner withdrew $480,000 from bank accounts just one day after a court injunction had frozen those assets.
“The Commonwealth often seeks to secure assets for its anticipated judgments, particularly where consumers are the victims of flagrantly unlawful practices,” said AG Coakley. “This is an egregious example of a defendant ignoring the court’s order not to transfer any funds. We filed this contempt proceeding to protect funds that could be used for potential recovery in this case.”
Attorney General Martha Coakley’s Office initiated a contempt proceeding in Suffolk Superior Court against Charles R. Caliri, of Woodstock, Vermont for violating the terms of a July 2010 temporary restraining order and preliminary injunction which prevented Caliri from disposing of any assets, including funds held in any bank accounts. The Attorney General’s contempt proceeding alleges that Caliri, one day after the issuance of the court order, withdrew a total of $480,000 from four bank accounts in the form of treasurer’s checks payable to himself.
The Attorney General’s Office is seeking a court order for Caliri to turn over $380,000 to be deposited into an escrow account until further order of the court. If Caliri does not comply with the court’s judgment and order, a warrant would be issued for his arrest. A contempt proceeding typically requires the parties to expedite the discovery process to allow the judge to make a separate ruling on the alleged contemptuous conduct. The underlying complaint will proceed on a normal schedule.
In July 2010, the Attorney General filed a lawsuit against Caliri, owner of businesses Only Way 2 Go Travel of Plymouth, and Fantasia Travel Group of Methuen, as well as multiple individuals associated with those enterprises, for allegedly using unfair and deceptive marketing and sales tactics to sell memberships for a vacation club that offered few, if any, of the benefits promised.
According to the lawsuit, the defendants lured consumers through mail and telephone solicitations to their Plymouth and Methuen presentation centers by promising them prizes and gifts of airline travel, weekend getaways, and rebate cards. Once consumers arrived at the presentation centers to claim their prizes, defendants subjected these consumers to high pressure sales tactics designed to induce those consumers to purchase memberships in the Outrigger Vacation Club. Consumers paid thousands of dollars for these memberships based upon false promises by the defendants that they would receive better-than-Internet wholesale prices on vacation packages, cruises, accommodations and other travel services.
None of the consumers who complained to the Attorney General’s Office ever received the prizes or gifts initially promised to them. Instead, they left the Plymouth and Methuen sales presentation venues having spent as much as $8,500 for vacation club memberships that were essentially worthless when compared with travel arrangements they could make themselves using one of the major Internet travel search engines or by calling airlines, hotels and resorts directly.
The Attorney General’s office has received more than 300 complaints from consumers who have fallen victim to the defendants’ scheme. Consumers who purchased an Outrigger membership paid on average a membership price of approximately $4,200.
This matter is being handled by Assistant Attorneys General Emily Armstrong and Gillian Feiner of Attorney General Coakley’s Consumer Protection Division, with assistance from paralegal Krista Roche, also of the Consumer Protection Division.