Dream vacations turned timeshare nightmares

Timeshare fraud nightmare
Timeshare fraud nightmare   

Jennifer Kirk ran a massive telemarketing scheme that bilked more than 22,000 victims out of over $30 million.

"This was an outfit that grew from four employees to nearly 300, with nine locations across Florida all for one purpose—to cheat people out of their money," federal prosecutor Stephen R. Wigginton told CNBC.

Wigginton, U.S. Attorney for the Southern District of Illinois, said 36 telemarketers have already been convicted in the scheme.

Kirk, 33, of Howell, N.J., eventually plead guilty in June 2011 to conspiracy to commit mail fraud and wire fraud.

It all began when Kirk and her boyfriend, Matthew Hicks, started a time-share telemarketing business called Universal Marketing Solutions.

When Hicks died in 2007 of a heroin overdose, Kirk took over the business and changed the name to Creative Vacation Solutions. Between October 2007 and December 2009, Kirk's business grew—defrauding victims in all 50 states, Puerto Rico and Canada. Kirk even produced a promotional video featuring "People's Court" actor Doug Llewelyn, and company employees posing as satisfied customers.

Kirk was sentenced in 2012 to more than 15 years in prison. Investigators are still working on the case.

Phone calls to Kirk's attorney for comment were not returned.

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Janine Lamontagne | Getty Images

According to investigators, Kirk recruited employees from drug rehab centers. She believed that "substance-abuse addicts were the best liars in the business because they had lied to family and friends for most of their adult lives," Wigginton said.

According to videotaped statements, Creative Vacation Solutions would tell future employees that as long as they could lie and cheat, there was no limit to the amount of money they could make, investigators said.

In one statement taken by the U.S.Attorney's office in 2013, an employee told investigators: "There is no way you can work there and not know that it was a scam. The job was to scam people out of money."

Prosecutors said the scheme had three parts, which the company referred to as "opener," "closer" and "customer service."

An opener would call timeshare owners from an illegally obtained "call list," according to authorities. The employee would use a high pressure sales script to convince the timeshare owner that the company could sell their timeshare at a profit. Once the opener persuaded the owner to sell, the owner was then transferred to the "closer."

"The closers were particularly brazen and would laugh and hold customers in contempt, call them names, would make fun of them with the other telemarketers, and would play tricks on them during the phone call just to generate laughs. They were horrible people," Wigginton said.

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Jennifer Kirk was sentenced in 2012 to 188 months behind bars.
Source: New Jersey Department of Motor Vehicles
Jennifer Kirk was sentenced in 2012 to 188 months behind bars.

The closer would tell timeshare owners that the company had a buyer ready and waiting to purchase their timeshare, they just had to pay a small closing fee that would be returned to them with the payment for the timeshare within 60 to 90 days. The closing fee ranged from $1,500 to $3,000 depending on how desperate the timeshare owner was to sell. According to Wigginton, "the sole objective of the closer was to get your credit card number."

The final arm of the company was the customer service department, which was meant to stall customers past the time they could challenge the deal paid with their credit card, prosecutors said. Investigators say employees read from a script and kept a "log of lies" in a spreadsheet in order to keep track of which part of the script had already been told. An employee told investigators in a videotaped statement that, "they kept the lie going by stating that the buyer had backed out, they got a new offer on the property. It's going to take at least another 30 to 60 days."

—By CNBC's Andrea Day and Valerie Patriarca. Follow them on Twitter @AndreaDay and @PatriarcaCNBC