Over the years, one might say that timeshare travel has gotten a little out of control. Because regulations weren’t an initial priority, many resorts operated at their own will. Perpetual agreements not only give hospitality conglomerates total control, but it also empowers the little guy too. When greed drives the organization, consumers usually pay the price. We know because we’ve helped hundreds of embezzled timeshare owners. This was especially true at the Caribbean Service Group (CSG), starting back in 2009 when the original owner passed away.
The timeshare company, which was located in Georgia, was responsible for managing The Woodbourne Estates Resort in Freeport, Bahamas. Since the deceased owner had no concrete plans for his exit, CSG’s operation was held up in probate. After spending the previous 6 years with the company, Katherine Tice Craig, a close employee of the late owner, took it upon herself to begin managing the day to day activities of the business. While her initiative may have drawn admiration at first, her ambition was eventually exposed.
How Resort Manager Embezzled Timeshare Owner Funds.
By early 2012, Craig, also known as Kathy Tice, had fully immersed herself in a leadership role with the Caribbean timeshare retailer. After getting rather comfortable as the head honcho, the U.S. Attorney Pak claims she began embezzling money from the business for herself. For the next 7 years, Katherine went on to steal an excess of $2 million from more than 1,000 of her employer’s customers without blinking twice.
Like many scam artists in the timeshare realm, Craig used a variety of techniques to line her pockets. “Most of these victims were elderly,” said Attorney Byung Pak. Targeting vulnerable users increased her chances. Investigators found that Craig had deposited more than $1.2 million of GSC’s profits into her own bank account and even wrote over $300K in company checks to pay off her credit cards. But the misconduct didn’t only involve simple reallocations. Craig also contacted several timeshare owners and talked them into paying cash instead of writing checks. This allowed her to skim another $450K from the business.
“She allegedly collected and spent the fees owed to the company on gambling and trips for herself,” said Pak. Some of the purchases included large quantities of lottery tickets and numerous stops at a Biloxi, Mississippi Casino called The Beau Rivage. Rather than focusing on honoring her paying guests and managing the resort efficiently, Craig decided embezzling the money for these types of guilty pleasures was a better idea.
Covering Up the Timeshare Embezzlement.
In order to make up for the stolen money, Katherine eventually began participating in unethical attempts to cut costs. Aside from avoiding casualty insurance (a requirement of the lease agreements she sold), Craig also refused to maintain the property. After years of neglect, mother nature ran its course and the resort began to fall apart. By December of 2015, she made the decision to halt all financial support.
At this point, The Woodbourne Estates Resort was in such bad shape that timeshare owners weren’t even allowed to visit the property anymore. But Craig continued billing them, adding excessive maintenance fees to their tabs. When owners refused to pay because availability didn’t exist, she threatened to send them to collections. In the meantime, she approved multiple transfers, continued avoiding insurance and even recruited new owners with false promises.
Craig Has Yet to Be Charged for Mail Fraud.
After Craig was arraigned on federal charges of mail fraud, she was indicted by a federal grand jury on January 7th of this year. U.S. Magistrate Judge Justin S. Arnold will oversee the case and the U.S. Postal Inspection Service has also taken an interest. The inspector-in-charge, David McGinnis, had this to say about the indictment. “[We take] great pride in protecting the American public, especially our vulnerable older Americans. Those seeking to defraud and take advantage of our postal customers should know they will not go undetected and will be held accountable.”
Hopefully this type of criminal activity within the timeshare marketplace ends soon. Until then, take the time to research your rights and the companies you do business with so you can avoid scams in the timeshare industry.