#romancescams | Timeshare resort manager arrested for massive elder fraud and embezzlement targeting timeshare owners

Katherine Tice Craig, a/k/a Kathy Tice, has been arraigned on federal charges of mail fraud.  The defendant allegedly embezzled over $2 million dollars from a company she was managing.

“Craig’s scheme defrauded over 1,000 timeshare owners who were her employer’s customers,” said U.S. Attorney Byung J. “BJay” Pak.  “Most of these victims were elderly.  She allegedly collected and spent the fees owed the company on gambling and trips for herself.”

“The U.S. Postal Inspection Service takes 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,” said USPIS Inspector-in-Charge David M. McGinnis.

According to U.S. Attorney Pak, the charges, and other information presented in court: Since 2003, Katherine Tice Craig worked at Caribbean Service Group (“CSG”), a business running a timeshare resort in Freeport, Bahamas called the Woodbourne Estates Resort. CSG operated in Atlanta, Georgia and Zebulon, Georgia. After the original business owners died in 2009 and 2010, the business was held up in probate. During this time, Craig managed CSG with no close supervision. By February 2012, Craig was allegedly embezzling CSG Group funds for her own purposes.

From 2012 through 2018, Craig allegedly embezzled over $2 million from CSG, using a variety of techniques. These were funds she took from the business, over and above her salary. Craig took over $1.2 million by simply transferring money from CSG’s bank accounts to her own, over $450,000 by negotiating checks made out by CSG to “cash,” and more than $300,000 by writing checks on CSG’s accounts to pay her own personal credit cards. Craig spent much of the embezzled funds on gambling, including many trips to the Beau Rivage casino in Biloxi, Mississippi, and high-volume purchases of Georgia Lottery tickets.  Money that should have been used by CSG to run the resort and fulfill its obligations to timeshare owners was allegedly embezzled by Craig instead.

During an overlapping time period from 2012 to 2019, Craig defrauded and misled over 1,000 timeshare owners – most of them elderly retirees. Craig saved money – unsustainably – by operating the resort without casualty insurance, even though the Lease Agreements required CSG to maintain casualty insurance. Over the years, the buildings at the resort deteriorated through storm damage and neglect, so that fewer were usable. Craig allowed the resort less money to run on as time went on, before cutting off financial support to it entirely in December 2015.

By early 2016, the resort was in such bad shape that Craig wasn’t allowing any timeshare owners to vacation there any more, even though the Lease Agreements entitled them to stay in particular units at particular times.  Craig continued billing timeshare owners for maintenance fees, and threatened many who fell behind with referral to a collection agency. She also approved transfers of some of the timeshare leases to new owners, essentially recruiting new victims even after the resort was no longer viable. Craig never told the timeshare owners that there was no casualty insurance on the resort, or that the main expense being paid for by their maintenance fees was her own alleged pattern of embezzlement.

Katherine Tice Craig, 51, of Zebulon, Georgia, was arraigned before U.S. Magistrate Judge Justin S. Anand.  Craig was indicted by a federal grand jury on January 7, 2020.  Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

The U.S. Attorney’s Office for the Northern District of Georgia is part of the Department Of Justice Transnational Elder Fraud Strike Force. The Strike Force focuses on investigating and prosecuting defendants associated with foreign-based fraud schemes that disproportionately affect American seniors.  These include romance scams, phone scams, mass-mailing fraud schemes, and tech-support fraud schemes.  For further information on these scams, see https://www.justice.gov/elderjustice/senior-scam-alert.

The U.S. Postal Inspection Service is investigating this case.

Assistant U.S. Attorney Alana R. Black is prosecuting the case.


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