Uri Fried gets year in jail fo not reporting 1.9mil in income via timeshare sales

[Laurie]

Way back in the early days, I called this guy. I was responding to a listing somewhere, and I was inquiring about selling one. He was incredibly rude and unprofessional on the phone. I knew I never wanted to do business with him.

Edited to add: I have bought a few timeshares on ebay from some other companies and individuals who might be described as Viking Ships. They were always polite and professional.

That's all.

 

[comicbookman]

Way back in the early days, I called this guy. I was responding to a listing somewhere, and I was inquiring about selling one. He was incredibly rude and unprofessional on the phone. I knew I never wanted to do business with him.

Edited to add: I have bought a few timeshares on ebay from some other companies and individuals who might be described as Viking Ships. They were always polite and professional.

That's all.

There is nothing inherently wrong about BUYING from a Viking ship operation. (other than it keeps it afloat to cause more havoc) That works out for everyone including the HOA. Its when the Viking ship goes down that everyone loses.

 

[theo]

There is nothing inherently wrong about BUYING from a Viking ship operation. (other than it keeps it afloat to cause more havoc) That works out for everyone including the HOA. Its when the Viking ship goes down that everyone loses.

I don't necessarily disagree, but will point out that one recurrent problem and complication is that many transfers to Viking Ships are never acknowledged or accepted by the resort in the first place, so the "transfer"(...even to a new, legitimate recipient) is sometimes muddied up considerably by the presence of a unknown "middleman" entity inserting itself (for money, of course) between the last known legitimate owner of record and a new prospective legitimate owner.

I witnessed this very situation yesterday for a week at a timeshare in Maine. Owners (so they thought) "signed over" ownership (and $1200) to a "middleman" in 04/2015.
There are no deeds at this particular place, just developer-signed "Certificates of Trust" identifying unit / week. Resort actually knows absolutely nothing about this whole matter, considers owners to still be the owners on their books; resort does not even know (or maybe even care) who this "middleman" (...a Viking Ship?) entity might be.

Sadly, the current owners could very easily have given the week back to this particular resort for free --- quickly and cleanly. Instead, it's now just a legal mess.
The owners of record are out of pocket $1,200, gone forever --- and literally do not yet even know that they are not actually "out" of their ownership at all.

 

[hotellier]

It seems like a fair tactic to put a timeshare in an LLC. Yes, the LLC can go bankrupt, but so can an individual.

I think the article puts to much emphasis on the timeshares being in an LLC as being a bad thing, when all it is is an instrument.

An individual can default on maintenance fees and not pay taxes on the timeshare the same way an LLC can, not sure why they are so focused on that.

Tugbrian said:
"plenty wrong with transferring a timeshare into an LLC setup for the sole purpose of abandoning said timeshare. "

Why would he go through the pain of transferring the timeshares into LLCs just to abandon them? Was he stripping them of points?

Thanks for the info thus far.

 

[DeniseM]

You don't understand how it works:

When these timeshare owners wanted to get rid of their timeshare, but they couldn't sell it or give it away, they paid a Viking Ship company to take the deed off their hands and ABANDON it.

If a timeshare has real resale value, the Viking Ship company sells it, but if it doesn't they simply let it go into default.

They make their money by charging the owner hundreds/thousands of dollars to "take their timeshare off their hands."

This is completely different than a private individual having financial problems and going bankrupt. With a bankruptcy, the timeshare would be discharged through the bankruptcy - not abandoned in a phony LLC.

To compound the problem, many times the deed is NOT completely transferred out of the original owner's name, so not only does the owner LOSE the fee they paid the Viking Ship Company, but they also are still fully responsible for the timeshare and all ongoing fees in the future.

It's fraud.

 

[comicbookman]

It seems like a fair tactic to put a timeshare in an LLC. Yes, the LLC can go bankrupt, but so can an individual.

I think the article puts to much emphasis on the timeshares being in an LLC as being a bad thing, when all it is is an instrument.

An individual can default on maintenance fees and not pay taxes on the timeshare the same way an LLC can, not sure why they are so focused on that.

Tugbrian said:
"plenty wrong with transferring a timeshare into an LLC setup for the sole purpose of abandoning said timeshare. "

Why would he go through the pain of transferring the timeshares into LLCs just to abandon them? Was he stripping them of points?

Thanks for the info thus far.

because that way you can transfer a bunch of no value timeshares, that you were paid to take, out of your name and just let them drift away with no easy way for the HOA to come after you. He pocketed the money, paid no MF's and the HOA's could only go after the bankrupt LLC, which has no assets other than the unsellable timeshares. The LLC part is important because it is the actual owner of record, not Uri.

 

[comicbookman]

I don't necessarily disagree, but will point out that one recurrent problem and complication is that many transfers to Viking Ships are never acknowledged or accepted by the resort in the first place, so the "transfer"(...even to a new, legitimate recipient) is sometimes muddied up considerably by the presence of a unknown, mythical "middleman" entity inserting themselves between the last known legitimate owner of record and a new prospective owner.

I witnessed this very situation first hand just yesterday for a week at a place in Maine. Owners "signed over" their ownership (and $1200) to a middleman in April, 2015.
No recorded deeds at this place, just a signed "Certificate of Trust" identifying unit / week. Resort knows absolutely nothing about the whole matter, considers owners of record to still be the current owners; resort does not even know (or maybe even much care) who this "middleman" (Viking Ship?) entity might be.

The saddest part of all is that the current owners could have given the week back to the resort for free --- quickly, easily and cleanly. Instead, it's now a legal mess.
The owners of record are already out $1200 and they literally don't yet even know that they are not "out" of their ownership at all.

I meant a successful purchase from a Viking ship. Your point above is another reason Viking ships are bad.

 

[TUGBrian]

http://tug2.net/timeshare_advice/timeshare_viking_ship_llc.html

 

[hotellier]

You don't understand how it works:

When these timeshare owners wanted to get rid of their timeshare, but they couldn't sell it or give it away, they paid a Viking Ship company to take the deed off their hands and ABANDON it.

If a timeshare has real resale value, the Viking Ship company sells it, but if it doesn't they simply let it go into default.

They make their money by charging the owner hundreds/thousands of dollars to "take their timeshare off their hands."

This is completely different than a private individual having financial problems and going bankrupt. With a bankruptcy, the timeshare would be discharged through the bankruptcy - not abandoned in a phony LLC.

To compound the problem, many times the deed is NOT completely transferred out of the original owner's name, so not only does the owner LOSE the fee they paid the Viking Ship Company, but they also are still fully responsible for the timeshare and all ongoing fees in the future.

It's fraud.

Thanks for clarifying Denise. I didn't know people paid him to take it off their hands.

That said, however, a good lawyer could argue that the he did not go into default on those properties purposefully. He could argue he honestly believed he could sell them and ended up not being able to, and exercised his right of default. Last I checked you don't need to go into bankruptcy to default and let a timeshare "go."

These types of things happen in the business world all the time. Perhaps if those timeshares had marketable value they would sell and not default, one could argue.

But yeah he's screwed because of the not paying taxes thing and misrepresenting his services. And leaving some original owners hanging is just reprehensible.

 

[hotellier]

because that way you can transfer a bunch of no value timeshares, that you were paid to take, out of your name and just let them drift away with no easy way for the HOA to come after you. He pocketed the money, paid no MF's and the HOA's could only go after the bankrupt LLC, which has no assets other than the unsellable timeshares. The LLC part is important because it is the actual owner of record, not Uri.

I understand what you're saying. I feel sorry for the owners who were duped, but not sorry for the timeshare companys themselves.

Many timeshares should have a product of "value." There's something wrong with an industry that sells something that cannot be sold for $1 on eBay (a majority of them). Don't get me wrong I love my timeshares. But I have toured sales presentations and heard the load of bullocks they sell to the public.

I heard over half of Westgate timeshares are in default (not sure if it's accurate).

To me, it appears people have resorted to desperate measures to rid themselves of timeshares when they are unable to pay the maintenance fees. In most cases the timeshare company will just foreclose on the timeshare and resell it anyways.

 

[DeniseM]

You still don't understand how it works:

1) It cost money to foreclose and resale a timeshare - the HOA is responsible for that - not the developer.

2) Timeshare resorts belong to the timeshare owners - not the developers.

3) Many times the timeshare is not transferred out of the owner's name, so they lose their fee and they are still stuck with the timeshare.

When someone defaults on their timeshare by dumping it with a Viking Ship company, all of the rest of the owners - YOU AND ME - have an increase in the maintenance fees to cover the maintenance, and the cost of recovering the abandoned deed, and reselling it.

It has NO impact on the developer.

*It's very interesting that your first 4 posts would be in support of Viking Ship Companies...

 

[theo]

Yessa!

You still don't understand how it works:

1) It cost money to foreclose and resale a timeshare - the HOA is responsible for that - not the developer.

2) Timeshare resorts belong to the timeshare owners - not the developers.

3) Many times the timeshare is not transferred out of the owner's name, so they lose their fee and they are still stuck with the timeshare.

When someone defaults on their timeshare, by dumping it with a Viking Ship company all of the rest of the owners - YOU AND ME - have an increase in the maintenance fees to cover the maintenance, and the cost of recovering the abandoned deed, and reselling it.

It has NO impact on the developer.

*It's very interesting that your first 4 posts would be in support of Viking Ship Companies...

Very well said and completely accurate, as the developer is out of the picture just as soon as they make the first sale of the product (...and head off to the bank).

The one thing that guest "hotellier" was actually correct about is that some developers (the cite of Westgate was an appropriate example, although Wyndham should also be included) will sometimes take their product back from its' current owner and just sell it all over (and over and over) again. Pure profit for them.

 

[vacationhopeful]

Actually, with Wyndham ... the HOA pays to foreclose and CARRY the deed in its inventory (other owners get to cover all MFs of the inventory held by the resort).

Wyndham sweetheart deal is - they solely can BUY (pick and chose) the foreclosed deeds held by the HOA and pay the HOA $1 per deed IF and WHEN Wyndham wants an interval. Think of it as "just in time" inventory for Wyndham; HOA and other owners get no profit, just the bills.

 

[TUGBrian]

one should take a bit more time to research a point before acting as a champion for it in an argument =)

 

[rickandcindy23]

*It's very interesting that your first 4 posts would be in support of Viking Ship Companies...

Yes indeed.

Anyone who thinks this is a good business model to make some big money should think about the ramifications of losing everything and going to jail. I am not talking about the IRS necessarily. Plenty of companies have been caught with their pants down, especially in Florida, with Pam Bondi, who is watching out for scams relating to retired folks.

Nonetheless, I get several calls per day, and I realize it's because we own so many timeshares, so I just answer and hang up on 'em. It's not always a deterrent.

 

[VegasBella]

I don't think Viking Ships are immoral. No one would use them if there were better alternatives. The way to save the resort from dealing with Viking Ships and similar problems is to offer a more attractive exit strategy. The HOA should accept deed-backs, period.

 

[DeniseM]

I don't think Viking Ships are immoral. No one would use them if there were better alternatives. The way to save the resort from dealing with Viking Ships and similar problems is to offer a more attractive exit strategy. The HOA should accept deed-backs, period.

Congratulations! Starting tomorrow the resorts that you own are going to start accepting unlimited deed backs. To accomplish this, they are going to raise maintenance fees 30% to cover the influx of unpaid maintenance fees and the cost of reselling the units. You don't mind - right?

BTW - it doesn't really matter if it's "moral" or not, in most states creating an LLC for this purpose is illegal, and more and more states are catching onto the Viking Ship Scheme and passing legislation specifically against it.

 

[rickandcindy23]

It's an immoral business model because the end game is sticking an HOA BOD with the difficult task of getting the week back through a foreclosure process.

By the way, I have mentioned this before, one Viking Ship operation called Vacation Solutions, LLC, registered to the state of Colorado, really backfired on Michael Dunahay because resorts connected to the weeks he abandoned started complaining about the LLC to the state of Colorado. Colorado had all information on Michael Dunahay to bankrupt him, and he lost the famous Sleeper House, which he bought in a depressed market and remodeled. It's the most famous house in Colorado (in my opinion), set on the side of the mountain and looks like a spaceship. It's a Colorado landmark.

I didn't feel one bit sorry for Michael Dunahay. In Colorado, you have to give your SS# to start an LLC. He made his money in a devious business model and lost all of it.

 

[VegasBella]

Congratulations! Starting tomorrow the resorts that you own are going to start accepting unlimited deed backs. To accomplish this, they are going to raise maintenance fees 30% to cover the influx of unpaid maintenance fees and the cost of reselling the units. You don't mind - right?

You make a lot of assumptions, the primary one of course is the assumption that accepting deed-backs would be more expensive than dealing with foreclosures due to Viking Ships. For starters, most of the Viking Ship companies charge a fee to accept the deed HOAs could also charge a fee. So they could get that fee PLUS save on all the costs related to loss of MF until foreclosure and legal fees related to foreclosure.

Also, for the record the resorts I own probably wouldn't have that issue. One resort has significant resale vale, one resort is owned by DRI and they're accepting deed-backs (they'd likely take ours), the last one the HOA helps owners rent or sell their weeks.

 

[DeniseM]

You make a lot of assumptions, the primary one of course is the assumption that accepting deed-backs would be more expensive than dealing with foreclosures due to Viking Ships. For starters, most of the Viking Ship companies charge a fee to accept the deed HOAs could also charge a fee. So they could get that fee PLUS save on all the costs related to loss of MF until foreclosure and legal fees related to foreclosure.

You said "accept all deed backs" period. That is not the same as accepting deed backs only from those owners who can and will pay a fee.

Also, for the record the resorts I own probably wouldn't have that issue. One resort has significant resale vale, one resort is owned by DRI and they're accepting deed-backs (they'd likely take ours), the last one the HOA helps owners rent or sell their weeks.

So, because you don't think it would increase your maintenance fee, you are endorsing an idea that definitely would increase the maintenance fee for a lot of other people.

BTW - I agree that there should be an option for owners to deed their timeshare back, but it's going to have to involve the developers, because most HOA's simply could not handle the flood of deed backs they would get. Simply throwing open the door and accepting all deed backs would bankrupt many nice resorts.

 

[DeniseM]

By the way, I have mentioned this before, one Viking Ship operation called Vacation Solutions, LLC, registered to the state of Colorado, really backfired on Michael Dunahay because resorts connected to the weeks he abandoned started complaining about the LLC to the state of Colorado. Colorado had all information on Michael Dunahay to bankrupt him, and he lost the famous Sleeper House, which he bought in a depressed market and remodeled. It's the most famous house in Colorado (in my opinion), set on the side of the mountain and looks like a spaceship. It's a Colorado landmark.

I didn't feel one bit sorry for Michael Dunahay. In Colorado, you have to give your SS# to start an LLC. He made his money in a devious business model and lost all of it.

Cindy - I believe the Colorado was the first state to pass legislation against Viking Ship Schemes.

 

[rickandcindy23]

Cindy - I believe the Colorado was the first state to pass legislation against Viking Ship Schemes.

I didn't know and am glad! These scammers need to be stopped, but until states require SS#'s for all LLC's, there will be more.

 

[VegasBella]

You said "accept all deed backs" period. That is not the same as accepting deed backs only from those owners who can and will pay a fee.

No, I didn't say "all". Go back and read what I wrote. I never said anything like "accept all deed-backs without restriction."

So, because you don't think it would increase your maintenance fee, you are endorsing an idea that definitely would increase the maintenance fee for a lot of other people.

There's no definite about it. There isn't any actual proof to support your claim. You are simply assuming one outcome.

And as I stated, one of my resorts is owned by DRI and they are accepting many deed-backs. Well, my MF have not skyrocketed and the quality of the resort has improved.

There are other resorts where the HOA has implemented a deed-back program successfully. So, while there is some evidence that my suggestion can work I haven't seen evidence to support your assertion.

 

[LannyPC]

To me, it appears people have resorted to desperate measures to rid themselves of timeshares when they are unable to pay the maintenance fees.

It's not so much that people are unable to pay the MFs, although that is usually the case. It's more or less that people just don't see the value of paying.

For >90% of the TSs out there, you can rent from an owner for less than the MFs. And for some travelers, after owning TSs, they might feel that TSs just don't fit their traveling desires and needs. Or, they may be able to pay the MFs but then have no room in their vacation budget for airfare, activities, and all the other peripheral travel costs.

Actually, the list could go on and on as to why people want to divest themselves of ownership. TBS, the Viking Ship method is not recommended. There are other ways to get rid of your TS if you can put in a little time and effort.

 

[Beefnot]

I have never been a VeganBella fan, but DeniseM, her points (and counterpoints) to you are on the money.