State gets judgment against Waunakee timeshare wholesaler
- GEORGE HESSELBERG firstname.lastname@example.org
- Feb 26, 2017
A Waunakee businessman who took over unused timeshares for a fee will have to refund money to owners and return the timeshares to resorts, according to a consent judgment announced Friday. Uri Fried and his companies, The Timeshare Group and The Timeshare Company, were accused by the state in June 2015 of violating consumer protection laws in marketing and selling “timeshare transfer” services nationwide.
The victims were timeshare owners and the resorts or owners’ associations where those timeshares were located.
Fried offered timeshare owners in a down market a way to break free from “legal obligations quickly and easily, in return for payment of a fee,” according to a complaint.
He did that via several steps in filing warranty deeds and forming limited liability companies. After that, the LLCs just held the timeshare deed and ignored the rights and responsibilities of timeshare ownership, such as paying annual fees.
There is a name for this practice, according to the complaint: “Viking Ship,” so-called because of a loose reference to Vikings who put their dead onto ships, set them on fire and pushed them out to sea.
The civil complaint said Fried set up 24 such Viking Ship LLCs, intentionally using names that sound like names of real people, in Wisconsin, and processed “tens of thousands” of timeshare transfers into them. Meanwhile, those units racked up bills to resorts that were never paid.
Many resorts eventually caught on and refused to accept transfers to Fried’s LLCs. But he continued to solicit business from timeshare owners at those resorts, the complaint said.
With that scheme, Fried claimed to have created the “timeshare disposal business” in the 1990s. Fried could not be reached for comment.
State regulators accused him and his companies of making repeated false, deceptive and misleading statements and practices in marketing via postcard and video and the internet.
The consent judgment includes a $145,000 settlement, of which nearly $32,000 goes to reimburse 14 consumers; $30,000 to be distributed between seven timeshare owners’ associations; $60,000 in forfeitures and assessments; and $23,000 to reimburse the state’s costs.
Fried is barred from the timeshare business and he has to return the timeshares to resorts, if they want them back, the complaint said.
According to federal court records, Fried pleaded guilty in 2015 and was sentenced to a year and a day in prison for filing a false tax return.
Fried, described then as a “timeshare wholesaler,” agreed that his unreported income from this business between 2008 and 2009 was $1,980,035 and that he owed $706,636 in federal taxes for these two years.