Missouri man ordered to pay $140M in timeshare exit fraud case

A federal judge has ordered a Missouri man to pay more than $140 million in damages and penalties for his role in running an unlawful timeshare exit scheme that affected more than 11,000 consumers.

The U.S. District Court for the Eastern District of Missouri granted summary judgment to the Department of Justice and the State of Wisconsin against Christopher Lee Carroll, whom the court described as the “mastermind” of the operation. The ruling permanently bars Carroll from marketing timeshare exit services and from engaging in unfair or deceptive trade practices.

The court ordered Carroll to pay more than $95 million to compensate consumers harmed by the scheme and an additional $45 million in civil monetary penalties.

Carroll and his co-defendants operated through businesses including Square One Group LLC and Consumer Law Protection LLC, where they used high-pressure sales tactics and false and misleading statements to persuade consumers to pay between $5,000 and more than $80,000 for purported releases from their timeshare contracts. In many cases, those services were not actually provided.

The court found the scheme violated the Federal Trade Commission Act’s prohibition on unfair or deceptive trade practices, the federal Cooling-Off Rule — which requires sellers to give consumers three business days to cancel certain purchases made outside a seller’s regular place of business — and Wisconsin state laws governing fraudulent misrepresentations and direct marketing. Consumers were not informed of their cancellation rights and were denied refunds when they or law enforcement officials complained.

“The Justice Department will hold accountable anyone who uses unlawful high-pressure sales tactics and deception to take advantage of and exploit consumers,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “Americans deserve to be treated fairly and honestly.”

Carroll was the final remaining defendant in the case. The court previously imposed permanent injunctions against 17 other defendants, including several interrelated corporate entities also held liable for the more than $140 million monetary judgment, and four individual defendants who agreed to stipulated orders carrying a combined $11 million in penalties, partially suspended due to demonstrated inability to pay.