Massachusetts Tackles Timeshare Scam

Owner collected $1.5 million for resort that was never used

April 17, 2009

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The State of Massachusetts has obtained a temporary restraining order against a former timeshare operator who allegedly collected over $1.5 million from consumers for timeshare intervals at the Navigator Beach Club Resort, which were never made available for use.

In a lawsuit, the Massachusetts Attorney General's Office alleges that the defendants' conduct violated the Massachusetts Consumer Protection Act and the Massachusetts Real Estate Time-Share Act in connection with the construction and development of the Navigator as well as the marketing and sale of the time-share intervals.

The temporary restraining order prohibits Robert Reposa, the former owner of the Navigator Beach Club and LSC Associates (LSC), the time-share's developer and managing entity partner, from collecting monies from consumers for any time-share intervals in Massachusetts.

"The defendants in this case took well over $1 million in deposits from consumers for Navigator time-share intervals, yet failed to ever complete construction on the time-share resort or even record the time-share licenses," said Attorney General Martha Coakley.

"Time-share developers cannot mislead consumers by making sales pitches that promise what they cannot deliver in order to obtain hard-earned money from consumers," Coakley said.

According to the complaint, from 2005 through 2008, Reposa and LSC targeted and deceived over 100 consumers, including dozens of senior citizens, in connection with the sale of time-share intervals for the Navigator, a time-share resort located in Dennisport, Massachusetts. The defendants allegedly gave consumers false assurances that the resort was financially sound and would be completed by 2007.

Coakley says the defendants took significant payments from consumers for time-share weeks, but never recorded the individual time-share licenses, or completed the construction on the project beyond installation of some rough plumbing and electricity in Navigator's pre-existing buildings.

As part of their sales strategy, Coakley claims Reposa and LSC also falsely represented that the Navigator would be part of a time-share exchange network, which would allow consumers to exchange their time-share week at the Navigator for a week at a different resort, but evidence suggests that any membership the Navigator had in an established time-share network was quickly revoked.

According to the complaint, prices for the time-shares ranged from $10,900 up to $54,900. By at least as early as the summer of 2006, however, Reposa and LSC allegedly knew that the Navigator was experiencing financial problems and that construction would not be completed by its target date. In an effort to quickly acquire as much cash as possible from consumers, the defendants allegedly induced consumers into paying off their entire remaining balances by offering an "early payment" discount.

The complaint further alleges that Reposa and LSC violated the Massachusetts Real Estate Time-Share Act by failing to record consumers' time-share licenses with either the Barnstable County Registry of Deeds or the Barnstable County Registry District of the Land Court, thereby leaving no record of consumers' time-share interval ownership.

Under the temporary restraining order issued April 15, 2009, by Judge Christopher Muse, the defendants are prohibited from forming a business to manage or develop a time-share resort in Massachusetts, destroying records that relate to their personal and business finances and disposing of any of their assets. As part of this lawsuit, the Attorney General's Office is seeking restitution, penalties and costs, including attorney's fees from the defendants. A hearing for a preliminary injunction is scheduled for Tuesday, April 21, 2009 at 2:00 p.m. in Suffolk Superior Court.

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