Time-Share Scam Preys On Elderly

Fraud, Land scam, Real estate

One of Gene Gordon's favorite songs is "Thanks for the Memories." And he and his wife had years of fun at their time-share condominium, but were ready to sell it.

Then along came an intriguing offer, reports CBS News Correspondent Jim Acosta.

"It was something I couldn't lose anything on," Gordon said.

A company called "Buyers Source" offered $10,000 for Gene's time-share, if he would take that money and buy land in a South Carolina golfing community. The price was $30,000.

"She said I'd make a lot of money. I could turn right around and re-sell it," Gordon said.

Turns out Gene's lot was not on the ninth hole, although it was certainly "in the rough." And then Gene got his tax bill.

"That's what the tax is based on … $2,500," Gordon said, pointing to the tax bill.

County tax collectors said his land was worth $2,500.

"I feel like I did get taken, like I did get ripped off," Gordon said.

He's not alone.

State and federal investigators say "Buyers Source" associates scammed 1,000 people in seven states and made $25 million by buying lots for between $1,000 and $8,000 and then selling them to people like Gene for $30,000.

A source familiar with the transactions tells CBS News this company ran a phone bank that targeted vulnerable senior citizens; that managers made notes about customers with "terminally ill" spouses and that "people with oxygen tanks make better targets."

"They're scammers. They're tricksters. They're fraud artists," said N.C. Attorney General Roy Cooper.

Cooper recovered $1 million for some 40 buyers in his state and then passed the case onto the feds, who are trying to do the same.

"It was out-and-out fraud. They had presented these lots as an idyllic situation and one that they guaranteed would appreciate in value," Cooper said.

Federal prosecutors are suing the developers, and may go after assets like a Hummer parked outside their offices, where managers refused to comment.

If Gene can't get his money back, he'll try to sell his land, which is located at the corner of Scarlet and O'Hara - a fitting reference to "Gone with the Wind" - like his money.

"The person I'm disappointed in most of all would have to be me," Gordon said.