Former area man guilty of timeshare fraud scheme
HARRISONBURG – A former Frederick County man pleaded guilty in federal court Friday to defrauding owners of timeshare properties.
Michael Dean Kent, 57, also known as Michael Dean and Michael Scott, most recently of Franklin County, North Carolina, pleaded guilty in U.S. District Court in Harrisonburg to a charge of conspiracy to commit wire fraud, according to information from the U.S. attorney’s office. Kent waived his right to be indicted and entered the plea. Acting U.S. Attorney Rick A. Mountcastle announced the development.
Kent and his co-conspirators defrauded more that 500 victims out of at least $550,000, according to the attorney’s office.
Assistant U.S. Attorney Erin M. Kulpa presented evidence to the court that, between 2014 and 2017, Kent and his co-conspirators targeted more than 500 people across the country who owned interests in timeshare properties, made false representations, by phone and email to convince the victims to sign property transfer contracts and to send currency under false pretenses to them via mail, according to information from the prosecutors.
Kent and his co-conspirators represented themselves as employed with two firms – The Holiday Property Group and Vacation Properties by Owner. Kent incorporated both entities, operated and served as principal of both and took steps to make the firms appear legitimate. Kent and his co-conspirators set up websites, paid for commercial post office boxes in various states, bought memberships in business-rating organizations such as the Better Business Bureau, applied for and received a federal tax identification number and obtained corporate debit and credit cards in the names of the entities.
Prosecutors say Kent and his co-conspirators would identify timeshare owners and introduce the victims to another co-conspirator who posed as the buyer by assuming a false identity that included a different name and email address. The buyer communicated with the victim by phone and email and would agree to purchase the victim’s property, often at the asking price, and would tell the victim they would use the two entities for the sale. The buyer was in contact with multiple victims at a time.
Kent and his co-conspirators would contact the victim and say they needed to send money to the entities, typically between $500 and $1,500, to cover expenses associated with the sale, such as closing costs or resort transfer fees. Kent told victims that fees would be held in escrow and were refundable at any time. However, evidence showed the fees were deposited into the accounts of the entities and not held in escrow.
Kent usually withdrew immediately much of the money deposited from the victim payments to use for personal expenses, cover the cost to continue the scheme or to pay his co-conspirators for their role.
The U.S. Postal Inspection Service, the Virginia Office of the Attorney General and the Frederick County Sheriff’s Office investigated the case. Kulpa and trial attorney Andrew Tyler of the Department of Justice’s Fraud Section prosecuted the case.