A 42-year-old man who controlled several telemarketing companies in Orange and Los Angeles counties and used them to scam dozens of timeshare owners, including elderly victims, pleaded guilty to one count of wire fraud on Monday, officials said.
Former Long Beach resident Michael McDonagh and four co-conspirators fraudulently obtained over $3.5 million from victims through a telemarketing scheme that used misleading and high-pressure sales tactics to promise financial relief to timeshare owners, according to the U.S. Justice Department and court records.
From 2015 to May 2019, McDonagh, who founded or controlled telemarketing companies based in Irvine, Costa Mesa, Santa Ana and Signal Hill, used “openers” to contact timeshare owners and offer a fixed fee to terminate their timeshare interests. Court records state McDonagh instructed company employees to “take no prisoners” and have “no remorse when interacting with victims.”
He also told workers to “take every penny” they could from victims, “so they cannot sue” the telemarketing companies. Owners who expressed interest in using their services were transferred to a “closer” who would persuade victims to sign contracts with the telemarketing companies for a one-time fee, of several thousand dollars, in order to get them out of their timeshare contracts, court records show.
McDonagh and his co-conspirators would also leave false positive reviews online and form new telemarketing companies to continue the fraud after the former firm was flooded with consumer complaints, a Justice Department news release said.
Within weeks of paying the initial one-time fee, the victims were contacted by the telemarketing companies and falsely told they could secure a large settlement or restitution payment from the timeshare company for an additional fee. For example, in one case, a co-conspirator solicited an additional $4,475 from a victim by falsely stating the fee would be reimbursed and that the victim’s timeshare company had agreed to pay $66,725 in restitution, according to a grand jury indictment.
The four co-defendants charged along with McDonagh have also pleaded guilty to one count of wire fraud, officials said. When sentenced, McDonagh faces a statutory maximum sentence of 20 years in federal prison.
Source: Orange County Register
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