Trial opens in alleged N.J. time-share scam

This week, many people will be heading for the beach or the mountains, possibly to their time-shares, taking vacations in the heart of the summer.

Not the 16 jurors who will spend the next several weeks holed up in a Camden courtroom, where testimony will center, ironically for them, on potential fraud in the vacation time-share business.

"This is a case about a group of people who lied to make money," Assistant U.S. Attorney Alyson Ward Oswald told the jury during opening arguments in U.S. District Judge Noel L. Hillman's courtroom Monday.

On trial are Adam and Ashley Lacerda, 29 and 33, a husband and wife who own Vacation Ownership Group L.L.C., and three employees: Ian Resnick, 37, of Absecon, N.J.; Genevieve Manzoni, 47, of Florida; and Joseph Diventi, 32, of Somers Point, N.J.

All are charged in an alleged scheme to trick time-share owners - more than 225 of them, many of them elderly - into believing that the Egg Harbor Township-based company, now known as VO Financial Corp., could help people get out of their time-share mortgages in 2009, 2010, and 2011.

The victims lost $2.4 million, the federal government said, because they paid Vacation Ownership Group to get them out of their time-share payments, but the Lacerdas did not follow through and kept the money.

Several defense lawyers told the jury that scams abound in the time-share business, but their clients were not part of the problem. They were trying to be part of the solution, the lawyers said.

The company is has four offices, hundreds of employees, and "thousands of satisfied customers," said Charles Nugent of Marlton, who represents Ashley Lacerda.

Troubled by high-pressure sales tactics the Lacerdas had seen as time-share salespeople for Wyndham Property Resorts in Atlantic City, Adam Lacerda decided to form a company to help time-share owners who wanted to get out of their contracts, said his lawyer, Mark Cedrone of Philadelphia. "He saw an opportunity to help," said Cedrone.

The FBI began investigating Vacation Ownership Group in July 2009, an agent told the jury.

What the jury did not hear Monday was the economic backdrop to the case.

Until September 2008, time-share sales grew steadily. In 2009, as the recession deepened, time-share unit sales dropped by a third in one year, from more than $9 billion in 2008 to $6.3 billion in 2009, said Howard Nusbaum, president of the American Resort Development Association, a trade group with offices in Washington.

Salesmen left the business in droves - either quitting or being fired - and some started their own companies, Nusbaum said.

At the same time, owners who had bought their time-shares when they were in their 40s and 50s, Nusbaum said, were now in their 80s and 90s and not as eager to travel, particularly since their investments were taking a beating.

"As people age, their ability to discern a fraud" diminishes, Nusbaum said. "People are preying on the elderly."

That's what happened at Vacation Ownership Group, Oswald told the jury in court Monday in a trial that is expected to last weeks.

Basically, she said, the sales people would tell time-share owners that if they made a partial payment - maybe half the amount owed - they could stop making the rest of the payments. Some people wrote checks for $40,000.

Salespeople were given a script to read when they called time-share owners, Oswald said. They began by insisting that they called in response to an owner's complaint.

If the owner said he had not complained, the salespeople were told to respond, "You may not remember," but "you definitely called in complaint about something, otherwise it would not be sitting in front of me," Oswald said, reading from the script.

She said elderly people would be particularly vulnerable to the suggestion that they had perhaps forgotten something.

Besides the paper evidence - checks and contracts signed by the people contacted by Vacation Ownership Group - the heart of the government's case will be testimony from some of the more than a dozen former employees who have pleaded guilty in the case.

And that's also the heart of the defense case, which is seeking to paint the former employees as "rogue" independent contractors who cheated customers without the permission or approval of the Lacerdas or the other defendants. In court, the lawyers said, they'll be lying again to earn reduced sentences.

Resnick, said his lawyer, Michael E. Reilly of Philadelphia, had been making $200,000 a year at Wyndham, but became disgusted with his own high-pressure tactics.

He could have stayed at Wyndham, Resnick said, "selling time-shares like he used to do, ripping people off and lying to people like he used to do," he said. But one day, he no longer could "face his conscience or the consequences of his lies," so he quit.

A lawyer representing Wyndham in related matters could not be reached for comment Monday afternoon.

Resnick joined the Vacation Ownership Group "to set the record straight, to do something to fix things," Reilly said.

That was also the motivation of former Wyndham saleswoman Manzoni, who joined Vacation Ownership Group as a saleswoman and quit when she didn't see customers getting results quickly enough, her lawyer, Ralph A. Jacobs of Philadelphia, told the jury.

Diventi was simply an employee doing what he was told without any intent to defraud anyone, said his attorney, Brian O'Malley of Haddon Heights.

Ashley Lacerda was a co-owner of the company but merely handled administrative matters, Nugent said.