A former Long Beach man was sentenced Monday to 10 years and one month in federal prison for a scheme in which he and a group of coconspirators defrauded hundreds of timeshare owners looking to get out of their contracts, according to the U.S. Attorney’s office.
Federal prosecutors say that from 2015 to 2019, Michael McDonagh, who now lives in Massachusetts, created several telemarketing companies, including the Signal Hill-based Nationwide Exit Specialist Inc., that offered “timeshare relief” for a fixed fee.
McDonagh’s workers were tasked with contacting timeshare owners and falsely promising them financial relief, according to federal authorities. Using high-pressure sales techniques known as “boiler room tactics,” the workers would get the timeshare owners to terminate their contracts for a “one-time fee,” according to federal authorities.
Within weeks of paying the fee, the timeshare owners were again contacted by McDonagh’s workers, who’d lie and convince them to pay more money, according to federal authorities. Some victims were told that if they paid an additional fee, then they’d receive a large settlement payout from a lawsuit against their timeshare company, according to federal authorities.
If one of McDonagh’s companies was getting inundated with consumer complaints, he’d simply form a new one, federal authorities said. In total, according to authorities, McDonagh scammed timeshare owners out of more than $5 million.
“[McDonagh] and those who operated in the scheme he orchestrated defrauded over 500 victims, robbing many of them of significant savings – and some of over $100,000,” prosecutors said in a sentencing memorandum. “During the multi-year scheme, [McDonagh] exhibited callousness to the plight of his victims, including telling his co-schemers to take ‘no prisoners’ and have ‘[n]o remorse.’”
Federal authorities didn’t say when McDonagh was taken into custody. He pleaded guilty in May to one count of wire fraud, according to federal authorities.
Four other defendants in the case have also pleaded guilty to one count of wire fraud and are awaiting sentencing, federal authorities said.
In addition to prison time, a federal judge also ordered McDonagh to pay just under $5.5 million in restitution, according to federal authorities.