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4 California men arrested for allegedly scamming elderly timeshare owners out of $5 million

Four Southern California men were arrested Thursday after being charged with scamming dozens of elderly timeshare owners out of more than $5 million.

The men – along with a fifth defendant authorities are still searching for – are accused of using “boiler room tactics” and lying about being able to provide victims with financial relief, according to a newly-unsealed federal grand jury indictment.

Federal prosecutors identified Michael McDonagh — a 41-year-old Long Beach man who founded or controlled telemarketing companies in Irvine, Costa Mesa, Santa Ana and Signal Hill — as the ringleader of an alleged scheme that targeted dozens of people, many of whom were 55 or older.

Three other co-defendants — Antonio Duarte, 42, of Corona, Christopher Vannoy, 32, of Norwalk and Ruben Ortiz, 40, of Long Beach — were also arrested on Thursday, while a fifth man — Frank Molina, 43, of San Pedro — was reportedly still at large.

According to the indictment, employees at McDonagh’s telemarketing firms would contact timeshare owners and try to get them to sign contracts promising the companies would get them out of their timeshare interests for a fixed fee.

After the clients would pay that initial fee, prosecutors allege, the telemarketing firm employees would contact them weeks later and tell them “a series of lies” in order to extract more money from them. That included some of the victims being told that for an additional fee they could get a large settlement payment based on “purported litigation” against the timeshare companies, according to the indictment.

Prosecutors allege that the victims were falsely told they could receive restitution to cover the fees they were paying once a settlement had occurred. The defendants are also accused of convincing the victims to pay fraudulent non-disclosure agreements by saying the forms were necessary before they could reach out to the telemarketing companies, prosecutors said.

But, according to the indictment, there was no litigation pending against the timeshare companies and none of the promised restitution payments were ever made.

The indictment alleges that McDonagh told employees to “take no prisoners” to have “no remorse” and to “take every penny you can.” Prosecutors allege that when one of the men raised concerns about the risks they were accused of taking, McDonagh told him, “It’s a decision you personally have to make, I’ve made (peace) with it, (I’ve) been a criminal my whole life and now it’s actually benefiting me.”

The men were arrested following an investigation by the U.S. Secret Service and the Huntington Beach Police Department.

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