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  • Report: #122198

Complaint Review: Michael Eugene Kelly - Yucatan Resorts - Majesty Travel - Resort Holdings

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  • Submitted: Fri, December 10, 2004
  • Updated: Thu, July 01, 2010

  • Reported By:New York New York
Michael Eugene Kelly - Yucatan Resorts - Majesty Travel - Resort Holdings
3222 Mishawaka Ave. South Bend, IN, Cancun, Quitana Roo, Isla Mjueres, Quintana , Other Mexico

Michael Eugene Kelly, Michael Kelly, Jr., Yucatan Resorts, Majesty Travel, Resort Holdings Intern'l, Avalon Resorts, Universal Lease, World Phantasy Tours, Galaxy Property Management, S.A. rip-off! Scam! Mexico, Panama, Nevada, Arizona, Conneticut, South Carolina, Indiana

*Consumer Comment: Resort hoildings Claim Form

*Consumer Suggestion: IP Fund1 members intervene

*Consumer Comment: IP Fund1 Leaseholders come together

*Consumer Suggestion: SEC Charges 26 Defendants in $428 Million Securities Fraud

*Consumer Comment: Leaseholders coming together

*Consumer Comment: Who's there for the " little guy"

*Consumer Comment: Michael Kelly is in jail and won't be getting out

*Consumer Comment: MICHAEL KELLY HAS BEEN ARRESTED

*Consumer Comment: MICHAEL KELLY HAS BEEN ARRESTED

*Consumer Comment: MICHAEL KELLY HAS BEEN ARRESTED

*Consumer Comment: MICHAEL KELLY HAS BEEN ARRESTED

*Consumer Comment: Also, Need to Make Contact

*Consumer Comment: we called the FBI

*Consumer Suggestion: Need to make contact

*Consumer Comment: Rip-Off by Michael Kelly and Yucatan/Resort Holdings

*Consumer Comment: Best way for leaseholders to pursue their recovery

*REBUTTAL Individual responds: YOU ARE RIGHT THEY ARE A BUNCH OF CROOKS

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I was approached by my insurance man who introduced me to his friend who was a retirement planning specialist in Las Vegas, NV (where I was living at the time in 2002).

My IRA proceeds were also invested with this same insurance man. He convinced me that I should invest my IRA funds with this retirement specialist who had an excellent investment in Yucatan Resorts Universal Lease Program in Cancun, Mexico, which they would rent out for me and pay 11% on my money.

I invested my IRA funds in the amount of $20,510. I was very ignorant of investments, in fact did not have any investments at all, and naively trusted my insurance man who I'd done business with for years.

I was fearful of losing my only retirement funds but was told I could liquidate my funds in 2 years and get my investment back, along with interest earned. (The contract was up for renewal in 2 years.) When I attempted to liquidate, I was thwarted at every turn, even though I followed their guidelines to the letter.

I was told that the company had the first right of refusal to purchase my leasehold interest. That a buyer would have to be found to purchase my lease in order to pay me my money back. I was told they would 'sell' my lease for me for up to a 20% commission to the seller.

I placed numerous calls to my insurance man, his retirement specialist, the many different entities who are involved in this scheme, I fax'd letters, sent emails, sent letters, and in general did everything that was 'required' of me to get my money back.

Most of the time, I received no response at all! When I was able to finally speak to someone, I was put off with stupid excuses of just be patient, that the money was coming, they're doing all they can do, etc.

The folks at Resort Holdings were extremely rude and would give me no info. I was consistently referred to one of the other entitied involved in this scam, that whoever I was speaking with did not handle that.

I received periodic statements regarding my 'investment' and was told my 'investment' had earned me almost $7,000 in interest. I have been attempting to at least get that back from the custodian, Trust Co. of America, to no avail thus far.

I have been contacted by the State of CT/Department of Banking/Securities in regard to Resort Holdings International and have filed a complaint with them. (I moved from NV to CT) I will also be filing a complaint in NV. Additionally, I am in the process of consulting an attorney.

I have become aware that this is apparently a Ponzi Scheme and is also in PA, SC, IN, Mexico, Panama, AZ. Michael Eugene Kelly and his son, Michael Kelly, Jr. are the perpertrators.

Further info: Here's the only website I could locate on my documentation: www.yucatanresorts.com; I noticed that Resort Holdings International has a new address: 2533 No. Carson Street, Suite 4149, Carson City, NV 89706.

Betty Dianne
New York, New York
U.S.A.

This report was posted on Ripoff Report on 12/10/2004 11:24 AM and is a permanent record located here: http://www.ripoffreport.com/r/Michael-Eugene-Kelly-Yucatan-Resorts-Majesty-Travel-Resort-Holdings/South-Bend-IN-Cancun-Quitana-Roo-Isla-Mjueres-Quintana-Other-77500/Michael-Eugene-Kelly-Michael-Kelly-Jr-Yucatan-Resorts-Majesty-Travel-Resort-Holdings-122198. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report.

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#1 Consumer Comment

Resort hoildings Claim Form

AUTHOR: Mary - (USA)

On June 6, 2010 an email was sent by the United States Department of Justice which stated: 
 
"The government objected to the motions, principally because the motions inaccurately asserted that the claims procedure would eliminate the rights of victims to sue and recover from defendant Kelly. In fact, participation in the restitution plan's claim procedure will not bar a victim from pursuing whatever remedies the law provides against the people or entities responsible for the fraud. The claim procedure will only bar a victim from pursuing claims against the assets that are under the court's control via the Restitution Trust, a third party who purchases an asset from the Restitution Trust, or the Special Master.

Judge Guzman denied the motions to intervene, but noted that the proposed order approving the claims procedure contained some language that might be incorrectly interpreted to mean that victims of the fraud could not maintain actions against Kelly business entities, and directed the parties and Special Master to submit a corrected order for his consideration."

 
In plane English!
 
The Court ORDERED SM to changed the language after leaseholders complained that the release was unlimited and would prevent the leaseholders from recovery.
 
However, after reviewing the "NEW" claim procedure, it fails to meet the Court's Order, the Release language on page 5 waiver/release language is exactly the same as the language the Intervenors complained of and I quoted in the Motion to Reconsider. The SM filed an amended claim procedure claiming it would not bar the leaseholders from pursuing their losses, however, the SM did not file the claim form. The claim form language bars the victims from initiating, pursuing or bringing any claim resulting from thereof before any competent court in any jurisdiction, regarding the Universal Lease Program"    
 
I believe it is time to put the SM, DOJ on the defensive before the Court and the other victims.  I intend will file a Motion to Show Cause why he should not be held in contempt of court for ignoring the court's order and misleading the court to believe the language had been changed. It is clear the SM is attempting to take advantage of the victims who will sign the form without any question because they believe and trust he is working for them and is under the supervision of the court!   "Looks Official" RIGHT!!!!!!!!!!!
 
This is the language on page 5 which you should not agree to:  "irrevocably waive and relinquish any claims or rights that I/we may potentially have under Mexico or Panama, or under any venue or jurisdiction, and also waive, decline and desist from initiating, pursuing or bringing any claim resulting from thereof before any competent court in any jurisdiction, regarding the Universal Lease Program"  
 
This makes it clear the leaseholders will not be allowed to pursue their claims in any jurisdiction! What was changed by the amended claim procedure filed with court? 
 
 You should not agree to the next paragraph which states:  "I/we declare that I/we are barred from asserting any claim against any transferee of or successor in interest to any asset or any asset or third party beneficiary of any asset owned by or affiliated with Grupo Kelly, and I/we agree to hold harmless and defend such transferee, successor in interest or third party beneficiary and irrevocably waive and relinquish any claim or rights that I/we may potentially may have under the laws Mexico or Panama or other venue or jurisdiction"     
 
This allows Kelly's family and others to keep ill-gotten gains, it also keeps the leaseholders from pursuing Group Kelly which is the direct beneficiary of Kelly's fraud! The claim form must be there by the 25th of August, it doesn't say you must agree with it. Read the cover letter, it states there is no money to send and that the assets must sold before any money can be sent! 
 
We will send a letter by regular mail to all of the leaseholders on our list with information on how to fill out the claim form. Those leaseholder who are not members should not sit on their hands, they should send letters to the court and complain too! The more leaseholder who come forward now the louder the voice! If the leaseholders do not come together, Kelly's family through Grupo Kelly and others will laugh all the way to the bank! 
 
We believe the court is aware of these issues and soon it will know the SM failed to follow the Court's Order. Because of this, the leaseholder can line out any language they do not agree with just  place you initials by the line though parts and state it's not agreed to, one line with blue ink will do it. You will have to attach an explanation why you do not agree to the language and the court will address the issues raised.
 
The other issue is the amount the SM claims you are owed, you should not agree with amount stated, include you explanation the validation of your loss that it sets the amount owed by Kelly and his companies artificially low and keeps the leaseholders from a full recovery and reduces the amount of restitution by the rental payments which a legally owed to the leaseholders for the use of their units under Mexican Law.
 
The  rental income is owed by all of Kelly's companies for the use of the units. For example; Kelly would charge each department for the use of the hotel rooms one such group was Grupo Kelly which  used  the hotel rooms to promote Kelly's schemes. I am told by an insider that Kelly's accounting department kept records of the use of the rooms and the SM should know this.
 
Kelly also represented to the leaseholders they would receive interest on the rental income if it was left to accumulate, there is no signs that he ever paid the interest! I believe that Kelly committed timeshare fraud in Mexico, however, there is no sign of any complaint in Mexico. The SM now stands in Kelly's place and is working to cut the best deal for Kelly, not the victims!
 
Furthermore, the largest assets are being kept of the table and without those assets the leaseholder's recovery will be pennies on the dollar. The claim form in its present form keeps the leaseholders from pursuing those assets! 
 
STAND BY FOR MORE!!!
 
Ernest
 
San Antonio TX
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#2 Consumer Suggestion

IP Fund1 members intervene

AUTHOR: Ernest - (USA)

 

MOTION TO INTERVENE AND MOTION TO STAY

COURTS APRIL 6, 2010 ORDER

 

                Ernest Bustos (Bustos), pursuant to Rule 60 of the Federal Rules of Criminal Procedure and Rule 24 of the Federal Rules of Civil Procedure, hereby Moves this court for an Order allowing him to intervene in this action in order to participate in proceedings involving the procedure for assessing the value of victim(s) claims, assessing the value of each claim and making distributions to said victims, subject to restitution in connection with the criminal proceedings against the Defendant in this Action.  Bustos also Moves this Court to Stay the effectiveness of the Courts Order (Docs. 317, 322).  In support of this Motion, Bustos represents to the court the following:

Motion to Intervene

                1              Bustos is an owner of one (1) Universal Leases developed and sold by Defendant through Yucatan Investment Corporation and Resort Holdings International, Inc. and others, which are the subject of the criminal prosecution of the Defendant in this Action (See Document 64 filed May 5, 2009).  As such, Bustos is a victim of Defendants alleged crimes prosecuted in this Action, as that term has been used in filings by the Special Master to the Court.

                2.                On February 10, 2009, the Court issued an Order appointing Douglas Doetsch as Special Master to assist the Court in preserving and repatriating the Defendants assets and distributing restitution to the victims (Doc. 100). 

                3.                The February 10, 2009 Order authorizes and directs the Special Master to create a Legal Structure to take title, custody control and possession of the Defendants Assets for the benefit of the victims.  Assets are defined as all of Defendants property and rights to property, including any other property or rights to property traceable to proceeds of the fraudulent scheme.  Such assets are to become part of a Restitution Fund.  The Special Master is obligated to cause Kelly to add Assets to the Restitution Fund necessary to make full restitution to victims.  The Court also has the duty to expand the Restitution Fund to include all necessary Assets to make full restitution to victims. Victims retain the ability to pursue any and all rights they may have that do not encumber, restrain or dissipate the Assets.

              4.          The Claims Procedure Order (Doc. 319) entered on April 6, 2010, but not effective until April 27, 2010, however, would bar victims not participating in or adhering to the Claims procedure from asserting a claim against the Special Master, Claims Processing Agent; Restitution Trust, Kelly Business Entities, or any successor in interest to or third party beneficiary of any asset owned by or affiliated with Grupo Kelly.  Kelly Business Entities are defined as including assets available for restitution.  Grupo Kelly is not defined, but is understood to refer to a Kelly-controlled entity operating in Mexico that has or had assets including property or rights to property traceable to proceeds of Defendants fraudulent scheme.

                5.                The April 6, 2010 Order also would adopt a Victim Claim Form that (a) terminates the universal leases; (b) waives claims regarding the Universal Lease Program including leases, any assets purchased with proceeds; (c) waives any remedy leaseholders would be entitled to under the Universal Lease Program, assigning them to the Special Master or his designee; and (d) bars claims against any transferee of or successor in interest to any asset or any third party beneficiary of any asset owned by or affiliated with Grupo Kelly. 

                6.                The April 6, 2010 Order thus collectively would eliminate rights of victims to pursue their rights to recover from Defendant and others through other proceedings reserved to the Victims in the February 10, 2009 Order.  In addition, with the waivers and bars to other recoveries, the April 6, 2010 Order would allow the special Master to proceed without causing the Defendant to provide sufficient assets for full recovery for the victims.

                7.                 The procedure authorized by the April 6, 2010 Order also is inconsistent with the requirements of the Mandatory Victim Restitution Act, 18 U.S.C.  3663A-3664 referenced on the Victim Claim Form.  That statute directs the restitution to be in the full amount of a victims losses, does not require and victim to participate in the restitution program, and does not provide that restitution waives a victims rights to pursue recovery of damages through other legal proceedings.  Indeed, it contemplates that such other proceedings could proceed, and only would reduce a victims entitlement to restitution in the event of later recoveries. The April 6, 2010 Order includes definitions and procedures for valuing each victims claims that deviate from the statutory mandate to award restitution of the full amount of the victims losses.

                8.                Bustos is a member of the IP Fund 1, Inc., which is pursuing civil damage recovery against Defendant, the corporate entities Defendant controlled and/or received proceeds from the sales of universal leases, and individuals who participated in the fraudulent scheme and benefitted from that participation, IP Fund 1, Inc., et al. v. Kelly, et al., Case No. 3:07-CV-1556-P, In the United States District Court for the Northern District Court of Texas, Dallas Division.  The Plaintiffs in that Action previously have informed the Court of the pendency of that Action (Doc. 48). The waiver terms of the April 6, 2010 Order and contemplated Victim Claim Form would bar pursuit of virtually all recovery sought in that lawsuit.

                9.                In light of the likelihood that the April 6, 2010 Order, should it become effective and be implemented, would impair or impede Bustoss ability to protect his interests in the property or transactions that is the subject of the restitution in connection with this Action, Bustos is entitled to participate in and be heard as part of the proceedings concerning the restitution to be ordered by this Court.

Motion to Stay

                10.                  The Court entered the April 6, 2010 Order without allowing victims the opportunity to be heard concerning its prospective terms, in spite of the clear effect the Order would have on victims rights and eventual recoveries.  As set forth above, the Order compromises rights of the victims to recovery generally and rights to pursue that recovery previously recognized and granted in the Courts February 10, 2009 Order.  The April 6, 2010 Order also purports to establish mandatory time frames enforced by draconian consequences to the victims.  Accordingly, Bustos submits that the Order should not become effective until he has the full opportunity to participate in the Courts assessment of the proposed order.  In addition, the Order itself authorizes the Court to amend its terms. A stay of the effectiveness of any claims procedure pending the resolution of the matters raised above would be a proper amendment to the order.

Relief Requested

                10.                 By this Motion, Bustos seeks authorization to intervene and participate in proceedings concerning any restitution to be ordered by the Court in this Action, and a stay of any pending orders or procedures concerning that restitution.

                WHEREFORE, Bustos respectfully requests that the Court enter an Order granting the relief requested herein and for such other and further relief as is just and equitable.

RESPECTFULLY  SUBMITTED this 20th day of April, 2010.

 

Ernest

San Antonio TX, 78259

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#3 Consumer Comment

IP Fund1 Leaseholders come together

AUTHOR: Ernest - (U.S.A.)


The leaseholders need to intervene in Kelly's criminal case to protect their leaseholders rights to hold RHI, Grupo Kelly and others civilly responsible!  The order appointing the special master obligates the SM to cause Kelly to add Assets to Restitution Fund necessary to make full restitution and pay SMs fees and/or obligates the Court to expand the Restitution Fund to include all necessary Assets to make full restitution to victims and pay fees.  The appointment does not preclude victims from pursuing any rights they may have that do not encumber, restrain or dissipate the Assets, enforcement of any rights (specifically characterized as a lien) against the Assets or Legal Structure unless the Court orders otherwise. However, the special master's claim form is contrary to the courts order of appointment. The claim form bars victims not adhering to the Claims procedure from asserting a claim against SM, Claims Processing Agent; Restitution Trust, Kelly Business Entities or any successor in interest to or third party beneficiary of any asset owned by or affiliated with Grupo Kelly The claim form recognizes a possible difference between amount of loss calculated for criminal restitution and that could be awarded a defrauded investor in a civil lawsuit, and that criminal restitution does not supplant a civil judgment.  Assets collected by SM will not be available to satisfy any civil judgment against Kelly.


Coming Victim Claim Form  (i) D. Waiver/Release (a) terminates leases (b) bars claimant from asserting any claims against SM, CPA and waives claims regarding the universal Lease Program including lease, any assets purchased with proceeds, any remedy entitled to under the Universal Lease Program [waived and assigned in benefit of SM or designee. (c) bars claims against any transferee of or successor in interest to any asset or any third party beneficiary of any asset owned by or affiliated with Grupo Kelly.  The special master wants the leaseholder to terminate their leases claiming the hotels can be sold free and clear of liens, however, I believe that they are not canceling all the other timeshares Kelly sold. "Therefore the hotels would not be free and clear of liens". The special master also wants the leaseholders not to hold him responsible for his actions, however, when the court appointed him; the court gave him immunity as long as he did not do anything outside of his appointment. If his actions are in line with his appointment he would have no immunity. Why is he asking the leaseholders to waive their rights to hold him responsible for his actions?    


If you sign the claim form you are buying the pig sight unseen and you will have no recourse because you signed your rights away! It is clear the special master is attempting do keep the leaseholders from going after some of the assets and others. It is also clear that his actions are not inline with his appointment.  Furthermore the special master doesn't disclose how much of your money will be recovered. For all we know its pennies on the dollar! 


If you are a leaseholder and have not joined with other leaseholders please go to (((ROR redacted))) more information to join.


 


Ernest


San Antonio, TX 78209


(((ROR redacted)))


 


 

CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.
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#4 Consumer Suggestion

SEC Charges 26 Defendants in $428 Million Securities Fraud

AUTHOR: Ernest - (U.S.A.)

The IP Fund 1 complaint takes a big bite out of the wrongdoers and the SEC only paints a picture of greed, it has a lot of bark and no bite. I have seen this before and it is very important for everyone to come together under one voice! We expected this to happen and are ready to meet them head on. I believe we will be on the winning side of the argument.

Joel Held one of RHI attorneys wrote in a case filed in Texas claiming securities fraud and RICO: "It is as if the Fifth Circuit of Appeals was referring to the complaint in this action when it observed:" "A Complaint can be long-winded, even prolix, without pleading particularity. Indeed, Such a garrulous style is not an uncommon mask for an absence of detail" Southland Securities Corp. v. Inspire Insurance Solutions, Inc., F. 365 3rd 353,362 (5th Cir. 2004)

The SEC complaint is a classic example of an ill-conceived, shotgun pleading in search of defendants and cause of action to justify a SEC-Receivership. They already state the leaseholders have lost their money. "The fraudulent Universal Lease scheme eventually collapsed, leaving investors with losses that exceed $300 million."

What losses! RHI and other asstes are there and can be claimed to pay the leaseholders.

We all know at this point that Kelly and his family owned and controlled RHI and the other companies. It appears that the SEC is more concerned about the brokers than real justice!

In any case, we will challenge any SEC-Receiver appointment of their own receiver "the fox garding the chickens" and request that the court appointed receiver be the RMG group made of leaseholders. We are in for a fight and what we want has been done before by another group.

SEC Charges 26 Defendants in $428 Million Securities Fraud That Targeted Senior Citizens and Retirement Savings Commission's Crackdown on Financial Fraud Against Seniors Continues

FOR IMMEDIATE RELEASE
2007-172

Washington, D.C., Sept. 5, 2007 - The Securities and Exchange Commission today filed charges stemming from a $428 million securities fraud that victimized thousands of seniors and other investors throughout the United States.

The SEC's action, filed in federal district court in Chicago, Ill., charges 26 defendants and alleges that they participated in a massive fraud that involved the sale of securities in the form of "Universal Leases." The investments were structured as timeshares in several hotels in Cancun, Mexico, coupled with a pre-arranged rental agreement that promised investors a high, fixed rate of return. The fraudulent Universal Lease scheme eventually collapsed, leaving investors with losses that exceed $300 million.

The case is part of the Commission's crackdown on financial fraud against senior citizens, which has already resulted in more than 40 enforcement actions over the past two years.

In the latest action, the SEC alleges that Michael E. Kelly and those working with him duped thousands of U.S. investors into using their retirement savings to buy Universal Leases on the false promise of safe and guaranteed returns. The SEC alleges that from 1999 until 2005, Kelly and others raised at least $428 million through the Universal Lease scheme from investors throughout the United States, with more than $136 million of the funds invested coming from IRA accounts. The SEC further alleges that a nationwide network of unregistered salespeople who sold the Universal Leases collected undisclosed commissions totaling more than $72 million. For most of the scheme, the complaint alleges, Kelly and his organization used new investor funds raised in the scheme to make illusory "rental income" payments to Universal Lease investors. The SEC also alleges that Kelly and others ran the scheme from Cancun through a number of foreign entities in Mexico and Panama.

"This case illustrates the Commission's continuing commitment to hold accountable those who prey upon the retirement funds of older Americans," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "Kelly and his cohorts told investors they were purchasing a safe, high-income investment suitable for a retirement account. In reality, investor funds were at grave risk as investor funds were used in a way that guaranteed the collapse of the scheme."

Merri Jo Gillette, Regional Director of the SEC's Chicago Regional Office, added, "Kelly and those involved in his operation may have hoped to evade U.S. law enforcement by operating the Universal Lease scheme from abroad. The action we filed today shows that the SEC will vigilantly pursue those who target older Americans, no matter what the obstacles. The SEC plans to aggressively seek recovery from the defendants to offset the huge losses they inflicted on investors."

According to the SEC's complaint, Kelly and others told investors that Universal Leases would generate guaranteed income through the leasing of investor timeshares by a large, independent leasing agent. In fact, the complaint alleges, the leasing agent was a small Panamanian travel agency controlled by Kelly, and for most of the scheme its payments to investors came from accounts funded by money raised from new investors. Further, the complaint alleges that Kelly and the other defendants failed to disclose several key facts about the Universal Lease investment, including the risks of the investment and that more than $72 million in investor funds were used to pay commissions as high as 27 percent to the selling brokers.

The SEC's complaint names the following individuals and entities as defendants: Kelly, Michael P. Kelly, Donald L. Kelly, John Corwin, Corporativo Nola, S.A. de C.V. Resort Holding International (RHI) S.A., Panorama Communities, S.A., World Phantasy Tours, Inc. (Viajest Fantasia Por El Mundo, S.A.), also doing business as Majesty Travel, Galaxy Properties Management, S.A., Yucatan Resorts, S.A. de C.V., Resort Holdings International, S.A. de C.V. The complaint also names as defendants a number of the unregistered brokers who sold the Universal Leases to the investing public. They are: Mark Ruttenberg, Ruttenberg and Associates Financial Marketing, Inc., Mark G. Meyer, Mark Meyer and Associates, Inc., Richard E. Riner, Southwest Income Marketing, Inc., George Phelps, also doing business as Safe Estate Plans, John E. Tencza, also doing business under the name of American Investment Management Group, Inc., American Elder Group, L.L.C., Carl Q. Lee, Carl Lee and Associates, Inc., Roy D. Higgs, Warren T. Chambers, William K. Boston, Jr. and Century Estate Planning, Inc. Finally, the complaint names Avanti Motor Corp. and DMK Properties, L.L.C., two entities affiliated with Kelly, as relief defendants, alleging that they received ill-gotten gains from the scheme.

The SEC's complaint charges the defendants with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. The SEC acknowledges the assistance of the German government (Bundesanstalt fr Finanzdienstleistungsaufsicht), the Mexican government (Comisin Nacional Bancaria y de Valores) and a significant number of state securities agencies.

Combating financial fraud against older investors will be a focus of the Commission's second annual Seniors Summit in Washington, D.C., on Sept. 10. The Summit also will include the release of findings from regulatory examinations of 110 firms offering "free lunch" investment seminars aimed at seniors.

The SEC's Seniors Summit will begin at 10 a.m. ET on Sept. 10 and will be webcast live on the SEC Web site at www.sec.gov. The event will further examine how regulators, community organizations, and others can increasingly coordinate efforts to educate older Americans and protect them from abusive sales practices and investment fraud. Registration information and other materials about the Seniors Summit are available at: http://www.sec.gov/spotlight/seniors/seniors_summit.htm.

# # #

For more information, contact:

Merri Jo Gillette
Regional Director
312-353-9338

Timothy L. Warren
Associate Director
312-353-7394

John J. Sikora, Jr.
Assistant Director
312-353-7418

SEC's Chicago Regional Office

Additional materials: Complaint


http://www.sec.gov/news/press/2007/2007-172.htm


--------------------

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#5 Consumer Comment

Leaseholders coming together

AUTHOR: Ernest - (U.S.A.)

IP FUND 1
January 10, 2007

Dear Lease Holder,

This is our first update to all our members by mail and I want to wish you all a happy new year. I do want to encourage you to register for our emails so that you can receive our ongoing information. I also want to let you know we have moved and the new address is on the bottom of the second page. Our phones have been down for a few weeks because AT&T would not allow us to continue with the phone number we have had for 16 years, so we changed phone companies and are taking our phone number with us.

The Fund placed the IRA Custodians and the State of Wisconsin Division of Securities on notice of Kelly's fraud and also placed notices on the Internet.

Here is a small excerpt from one letter to a Custodian 3/06: RHI and its principles are involved in a $450 million scheme. There are ongoing FBI investigations surrounding RHI's and Kelly's fraudulent enterprise. Mike Kelly (Kelly), RHI and their co-conspirators are attempting to use IRA Custodians to further their fraudulent enterprise by asking the Custodians to forward an offer to buy back the leases for 75% of their purchase price without reimbursing the owners for the past due rental income. IP Fund 1 Inc. (the Fund) and its members are placing the IRA Custodians on notice that there is an ongoing effort by the Fund to file a formal Racketeer Influenced and Corrupt Organizations.

The Fund has been very active, we have held our cards close to our chest and it has paid off. The FBI arrested Kelly on December 22, 2006 in Florida. This is a good thing and will help the Fund's RICO complaint. Here is what the FBI is claiming:

Associated Press
December 28, 2006, 7:04 AM CST
CHICAGO -- FBI agents have arrested a man on charges that he used time-share leases in Mexico to bilk real estate investors, including several in Illinois, out of $400 million. Michael E. Kelly, 57, allegedly sold "universal leases" on time-share properties and promised buyers an 11 percent returns on their investments, according to a criminal complaint released Wednesday. Kelly, of Cancun, was arrested Friday in Jacksonville, Fla. He is in custody in Florida and will be brought to Chicago to face federal mail fraud charges, officials said.

It is not immediately clear who Kelly's lawyer is. Authorities allege that he told investors that a third-party company would rent their time-shares. He also allegedly guaranteed high returns even if the properties weren't rented. But Kelly owned the third-party company and paid out the returns to investors himself, authorities allege.

Eventually he stopped making payments and instead spent investors' money on a lavish lifestyle that included a private plane and a large yacht, officials said. He allegedly netted $400 million from the late '90s to 2004. Jennifer French, a financial institutions fraud special agent for the FBI, said investors didn't see the red flags in the deal until it was too late. "Many of these folks eventually said it was just too good to be true, but the victims were diverse," French said. "Some of these people were sophisticated investors."

I am sure more arrests are to come.

The Fund's investigation uncovered 24 conspirators who may be named in our complaint or turned over to FBI and we will work with the FBI to get a handle on Kelly's and his conspirators ill-gotten gains and assets. We can now serve Kelly with our RICO complaint in jail; this should force a Receivership showdown. We will ask the court to allow the leaseholders to take over all the companies that received leaseholder money from Kelly or were started with leaseholder money, however, the government will not go away quietly. "The most terrifying words in the English language are: I'm from the government and I'm here to help." - Ronald Reagan. The agency in charge will want the court to allow them their own receivership claiming it is to protect the investors, however, the Receivership process can be a wolf in sheep's clothing.

It will be a dogfight to keep the government out as a receiver now that Kelly has been charged with fraud. The law is on the side of the investors, however, no one is ever on the ready to derail the appointment. This is why the government always appoints its own receiver who will charge millions in fees to "investigate wrongdoing" and the victim's recovery is always secondary.

There will also be attorneys surfacing, wanting to represent you for a fee of 30% - 50% of your recovery. Do not surrender your money. As members of the Fund, your claim will be pursued and the Fund will pay for the attorneys from the membership fees, no attorney's fee will be taken from the recovery.

It is more important than ever to have the leaseholders come together to take a stand. We propose to form a new company made up of leaseholders. The board of directors to head up this new company will also be leaseholders who will not take a paycheck and will act in the best interest of the leaseholders. This will cut out millions of dollars of expenses for a FTC or SEC Receivership. If you would like to be considered as a board member please fax us your resume to: 210.828.0096 or 7088.

For those leaseholders and brokers sitting on the fence, there is no time to take a wait and see attitude! It is time for the leaseholders to come together, When spider webs unite, they can tie up a lion!

Why join the IP Fund 1? Your membership is the best way to take action to recover your money without the expense of an FTC or SEC Receivership In most cases the Receiver and his attorneys receive most, if not all, of the money in fees. Receiverships are well known for taking all the assets and leaving the investors high and dry. I am guardedly optimistic the Lease Holders can recover their money without this type of receivership and since when does a victim have to pay for their own investigation?

For more infromation please send your request and include your full name and contact information.


Very truly yours,
Ernest Bustos

CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.
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#6 Consumer Comment

Who's there for the " little guy"

AUTHOR: Sam - (U.S.A.)

I to am a victim of mike kellys "universal lease scam" to the tune of thirty three thousand dollars.I live in west virginia, and was led to believe this was a good sound investment which was insured against any problems which was stated
in the contract I signed.

The person who sold me this universal lease, was Rodney L. Hinkle a local person who was with the Heritage Living Trust, home office in scotts valley california. Mr hinkle has been fined in maryland and given a ceast and desist order there as well as pennsylvania and florida by the S.E.C. This did not stop him as he conned me after this in 2003.

I would love to find his location to have him brought back to west virginia and prosecuted for his involvement in this "ponzi scheme." I also believe that Resort Holdings International in mexico owned by mr kelly should have to
return peoples original investment along with rental income not paid to investors.

There is much more to tell about this four hundred and fifty million dollar "scam" but much of it has already been spoken of in other articles on the net. In closing I hope there is someone who may be able to help "the little guy."

sincerely,
sam
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#7 Consumer Comment

Michael Kelly is in jail and won't be getting out

AUTHOR: Jb - (U.S.A.)

Michael Kelly appeared at his detention hearing in Chicago today. He was denied the right to bail since he has no assets in the US and is a flight risk. The case against him is overwhelming and he is facing 53 years in jail for defrauding thousands of retirees. He actually had the nerve to state that he only makes $55,000 a year and has a meager $48,000 in assets.
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#8 Consumer Comment

MICHAEL KELLY HAS BEEN ARRESTED

AUTHOR: William - (U.S.A.)

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire
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#9 Consumer Comment

MICHAEL KELLY HAS BEEN ARRESTED

AUTHOR: William - (U.S.A.)

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire
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#10 Consumer Comment

MICHAEL KELLY HAS BEEN ARRESTED

AUTHOR: William - (U.S.A.)

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire
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#11 Consumer Comment

MICHAEL KELLY HAS BEEN ARRESTED

AUTHOR: William - (U.S.A.)

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire
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#12 Consumer Comment

Also, Need to Make Contact

AUTHOR: Rollin - (U.S.A.)

My parents were also ripped off by these same people and others while living in Missouri and had similar exeriences. I need to know how to contact the appropriate people to find out how to proceed or join with others in recovery of funds invested.

Thank you for the help,

Rollin
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#13 Consumer Comment

we called the FBI

AUTHOR: William - (U.S.A.)

We have been in contact with the FBI here in virginia......they know where Kelly lives ,in panama....the agent is working the case as of now and he claims complaints keep comming in, we also had over 200,000 invested...there are many people here in va. that have invested money in thids so called company(Resort holdings Intl).We will try to keep you updated on any news.... william in va.
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#14 Consumer Suggestion

Need to make contact

AUTHOR: Henry - (U.S.A.)

My in-laws were equally ripped off by these guys to the tune of $200,000 while they were in Texas and had similar experiences (I'm filing a separate report). I need to know how to make contact with those that have posted here.
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#15 Consumer Comment

Rip-Off by Michael Kelly and Yucatan/Resort Holdings

AUTHOR: Jo Ann - (U.S.A.)

We are one of the investors in Yucatan originally and went through the chain of entities that were connected with Michael Kelly. We trusted the broker as he had invested other things for us and we had not been scamed but we believe that he was scamed also.
We invested two IRA's plus a lot of other money which we can ill afford to lose since we were depending on that money to help support us. Now we are in a world of hurt over money. We cannot get in touch with anyone on this as to what we should do and to see if we have a chance of recovery at all.

We were also told we could get our money back when the leases ran out which all of ours have done now. We haven't gotten any income in over a year.

We would appeciate any information that would be helpful to us. We were wondering if any kind of suit is going to be or has been filed in Texas.

Thanks for all information and help.
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#16 Consumer Comment

Best way for leaseholders to pursue their recovery

AUTHOR: Ernest - (U.S.A.)

As some of you already know, Mike Kelly of RHI stopped paying the Lease Holders their rental income over a year ago and is attempting to buy back the leaseholders' leases for less than the full price paid. I do not want to alarm the Lease Holders, however, the leaseholders must take steps to protect their rights so that your money and your rental income can be fully recovered. This is why I am proposing the Lease Holders join with other leaseholders to remove the current management.

Regulators in at least six other states have taken formal action against one or
more of the following: Michael E. Kelly of South Bend, Indiana, Yucatan Resorts, Inc., Cancun, Mexico and South Bend, Indiana; Resort Holdings International, Inc., Cancun, Mexico and South Bend, Indiana; World Phantasy Tours, Inc., Panama. Kelly, Yucatan, Resort Holdings and World Phantasy. These states forced Kelly and his companies to pay back 100% of the money collected by Kelly's Universal Lease Program. However, Regulators failed to collect the leaseholders' rental income.

Mr. Kelly made many misrepresentations: Kelly represented to leaseholders that if
they left the rental income to accumulate; RHI would pay as high as 11% interest. In reality, RHI, Kelley, and his co-conspirators have wasted, secreted, and otherwise dissipated the lease purchasers' funds, revenues, and other assets acquired and held in connection with the sale of RHI. Though RHI has collected the sums of rental income due and credited the accumulated interest to the accounts, RHI has not paid the leaseholders their monthly rental income. RHI has also refused to release the accumulated rental accounts. Kelly and his co-conspirators are attempting to defraud the leaseholders by claiming that Galaxy and Majesty are separate from RHI, Kelly, and his co-conspirators. On that claim they escape liability by asking owners to seek the rental income from Galaxy/Majesty. However, Galaxy is not independent from RHI and is controlled by Kelly and Kelly also controls Majesty. As many as 80% of the leaseholders have not received a dime of their rental income, which could be as much as $200 million. RHI, Kelly, and his co-conspirators are running the classic shell game. When a leaseholder looks underneath the wrong shell the corporation's funds are gone and the leaseholders lose.

In the Arizona complaint on RHI and Kelly The National White Collar Crime
Center stated, "A detailed investigation revealed that investor funds were shuttled between numerous US-based financial institutions and later wired to undisclosed locales, including dozens of companies and individuals in Mexico." Classic Money Laundering!

What needs to be done and how should it be done? The IP Fund 1 Inc a Texas Corp intends to file a complaint of fraud on behalf of its members, the Lease Holders, and to petition the court to allow the Lease Holders to remove Kelly along with RHI's current management and replace them with a committee of Lease Holders. They will oversee the operation and hire a new management team. They will determine what courses of action should be taken for the best interests of the Lease Holders. Even though there are no guarantees in any action, I believe this is the best way for leaseholders to pursue their recovery.

Very truly yours,
Ernest
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#17 REBUTTAL Individual responds

YOU ARE RIGHT THEY ARE A BUNCH OF CROOKS

AUTHOR: GARY - (U.S.A.)

I WAS ALSO INVESTED IN THIS SHAME COMPANY. THE PERSON THAT I THOUGHT WAS OK, MAN I WAS WRONG HE IS JUST AS BIG OF A RIP OFF ARTIST AS KELLY. HIS NAME IS RICK GREEN.

I TO HAD TO JUMP THROUGH THERE HOOPS BUT I REFUSED TO WRITE A LETTER I WENT IN AND TOLD THEM THAT I WANT MY MONEY. IT TOOK THEM APPROX. 2 MONTHS TO GET SOME OF IT BUT NOT ALL. LIKE I TOLD RICK GREEN IT IS MY MONEY AND NOT HIS. THEN THEY TRIED TO GIVE ME A GLOBAL CASH CARD.

HERE IS ANOTHER JOKE, YOU CANNOT GET ALL OF YOUR MONEY OFF THE CARD. OR YOU HAVE TO FIND A PLACE TO USE IT AND THERE IS A LIMIT TO WHAT YOU CAN TAKE OFF OF IT.

I AM KNOW PHONING MEXICO ABOUT EVERYDAY TRYING TO TALK TO SOMEBODY THAT KNOWS WHAT IS GOING ON. I HAVE TRIED TO TALK WITH JOHN CORWIN, HAROLD, AND EVEN KELLY HIMSELF, BUT I HAVE NOT HAD ANY LUCK. I FINALLY TALKED TO CARLO AND BEN. THEY ARE AT LEAST TRYING TO HELP BUT THE OTHER COWARDS WILL NOT RETURN MY PHONE CALLS OR EMAILS.

IF ANY OTHER WOULD LIKE TO CONTACT THESES COWARDS THE NUMBER IS 1-866-644-4164 AND FOR THE CAMALOT GROUP IN BLOOMINGTON ILLINOIS AND TALK TO ONE OF KELLYS HIGHER UPS IS RICK GREEN 1-309-661-1780. MAKE SURE THAT YOU LET THE ANSWERING MACHINE GO THROUGH THE OPTIONS BEFORE YOU CHOOSE HIS NUMBER.

THE GLOBAL CHECK CASHING CARD THE NUMBER IS 1-866-395-9200. THIS IS ANOTHER KELLY (RICK GREEN) ITEM OF INTEREST.
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