• Report: #229404

Complaint Review: Resort Holdings

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  • Submitted: Mon, January 08, 2007
  • Updated: Sun, September 09, 2007

  • Reported By:Frisco Texas
Resort Holdings
2533 N. Carson St. #4149 Carson City, Nevada U.S.A.

Resort Holdings, Michael Kelly, Avalon Resorts, Galaxy Mgt. We invested $80,000 in IRAs for Resort Holdings universal lease & can't find anyone to buy our lease & return our money that is needed for medical bills Ripoff Carson City Nevada

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

*Consumer Suggestion: JOIN OTHER LEASEHOLDERS FOR RECOVERY !

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We want to join other Universal Lease holders in a class-action lawsuit of Michael Kelly, Resort Holdings, Avalon Resorts for IRA money stolen from us since 2002. The company was to buy back our lease in 2005 after the 3 yrs. without surrender fees.

We have been unable to retrieve our money or find out who to contact--we will notify the TX Attorney General but heard Kelly was arrested in Florida in Dec. 2006. Please contact us with any info! Joe & Antoinette Watson, twatson326@hotmail.com

Toni
Frisco, Texas
U.S.A.

This report was posted on Ripoff Report on 01/08/2007 04:59 PM and is a permanent record located here: http://www.ripoffreport.com/r/Resort-Holdings/Carson-City-Nevada-89706/Resort-Holdings-Michael-Kelly-Avalon-Resorts-Galaxy-Mgt-We-invested-80000-in-IRAs-fo-229404. 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.

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#1 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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#2 Consumer Suggestion

JOIN OTHER LEASEHOLDERS FOR RECOVERY !

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

IP FUND 1 INC.
January 10, 2007

Dear Lease Holder,
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 complaint.
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 attorneys are working with the FBI. The FBI has requested our members complete the enclosed questionnaire and return it to us before the 18th by fax or mail. We sent the news of Kelly's arrest to the Mexican newspapers to turn up the heat on Kelly at home and are working with them to expose all of Kelly's fraud there also.

The Fund's investigation uncovered 17 co-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 co-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?

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