American Justice Notebook

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Four Men Arrested For Fraud Against Elderly Timeshare Owners of More Than $5 Million

          SANTA ANA, California 

Federal authorities this week arrested four defendants charged in a 29-count grand jury indictment, officials stated.

The indictment alleges that they scammed dozens of timeshare owners out of more than $5 million by using boiler room tactics and lying that they could provide them financial relief.

          The following defendants were arrested today and are expected to be arraigned this afternoon in United States District Court in Santa Ana:

  • Michael McDonagh, 41, of Long Beach, the lead defendant and alleged ringleader of the scheme
  • Antonio Duarte, 42, of Corona
  • Christopher James Vannoy, 32, of Norwalk
  • Ruben Ortiz, 40, of Long Beach

Authorities are continuing to search for a fifth defendant named in the indictment, Frank Anthony Molina, 43, of San Pedro.

The U.S. Secret Service and the Huntington Beach Police Department investigated this matter.

        The indictment charges the defendants with one count of conspiracy. McDonagh, Duarte, Vannoy, and Molina are charged with 28 counts of wire fraud and telemarketing fraud against the elderly. Ortiz, who allegedly joined the conspiracy in 2018, is charged with 12 counts of wire fraud and telemarketing fraud against the elderly.

man and woman sitting on bench facing seaAccording to the indictment returned on April 28 and unsealed today, from 2015 to May 2019, “openers” who worked for McDonagh-controlled telemarketing companies contacted timeshare owners and offered to help them terminate their timeshare interest for a fixed fee.

If the timeshare owner expressed interest in the telemarketing companies’ services, the call was transferred to a “closer” – usually Duarte, Vannoy, Molina or another co-conspirator – who convinced victims to sign contracts with the telemarketing companies to get them out of their timeshare for a “one-time fee.”

          Within weeks of the victim paying the fee, Duarte, Vannoy and Molina again contacted the victims and told a series of lies to induce them to pay more money.

For example, according to the indictment, some victims were falsely told that they would obtain – for an additional fee – a large settlement payment based on purported litigation against the victim’s timeshare company, including a class-action lawsuit.

          The defendants allegedly also made false promises of securing – for an additional fee – a large “restitution” payment from the victim’s timeshare company because the timeshare company had purportedly rented out the victim’s timeshare property without the victim’s permission.

          The victims were falsely told their additional fees would be refunded once the “restitution” and “settlement” had been paid, the indictment alleges.

To conceal the scheme, the defendants frequently convinced victims to sign fraudulent non-disclosure agreements to prevent the victims from contacting the timeshare companies to inquire about the purported settlement or restitution payments by claiming that the timeshare companies required the agreements to release the promised funds.

white and red wooden house miniature on brown table
Photo by Tierra Mallorca on Unsplash

In fact, no litigation was pending, and no restitution payments were made.

          McDonagh founded and or controlled several companies – Irvine-based Global Transfer Inc., Costa Mesa-based Global Transfer SoCal Inc., Santa Ana-based Nationwide Transfer Inc., and Signal Hill-based Nationwide Exit Specialist Inc. – that purported to offer timeshare relief.

Once one telemarketing company became inundated with consumer complaints, McDonagh allegedly would form a new telemarketing company to perpetuate the fraud. 

According to the indictment, McDonagh instructed employees of the telemarketing companies to “take no prisoners,” have “no remorse” when interacting with victims, and to “take every penny you can from” the victims “so they cannot sue” the telemarketing companies.

The indictment further alleges that in response to complaints from Ortiz about the risks he was taking in participating in the conspiracy, McDonagh told him that “it’s def a risk but I mean I shut down global over a year ago and nothing! ‘Knock on wood’ but I mean it’s a decision you personally have to make ive made piece [sic] with it ive been a criminal my whole life and now it’s actually benefiting me[.]”

          Through this conspiracy, the defendants fraudulently obtained more than $5 million from the victims. The indictment alleges that the scheme targeted dozens of victims, including many victims who were 55 years of age or older.

          If convicted of all charges, each defendant is facing up to 20 years in federal prison on the conspiracy count and up to 30 years for each fraud count.

The defendants are presumed innocent unless proven guilty.

          Any member of the public who has information related to this case or similar fraud schemes is encouraged to contact the Secret Service’s Santa Ana Resident Office at (714) 246-8257.

          Assistant United States Attorneys Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section and Ian V. Yanniello of the General Crimes Section are prosecuting this case.