Federal Court Slams Timeshare Exit Scam Operator With $140 Million Penalty, Lifetime Ban for Defrauding Seniors
A federal court has ordered a leading figure in a nationwide timeshare exit scheme to pay $140 million and permanently barred him from marketing similar services, concluding a sweeping enforcement action brought by federal and state authorities over allegations the operation defrauded mostly older Americans out of more than $90 million.
The ruling against Christopher Lee Carroll, described by the court as a “mastermind” of the operation, follows an investigation by the Federal Trade Commission and litigation pursued by the Department of Justice and the state of Wisconsin. The U.S. District Court for the Eastern District of Missouri granted summary judgment against Carroll, the final remaining defendant in the case.
Under the order, Carroll must pay more than $95 million in restitution to consumers and an additional $45 million in civil penalties, which will be deposited into the U.S. Treasury. The court also imposed a permanent ban prohibiting him from advertising, marketing, promoting, or offering timeshare exit services, as well as from engaging in deceptive door-to-door sales and other misleading conduct.
The defendants operated through 11 companies and trusts, including Consumer Law Protection LLC, Consumer Rights Council, Premier Reservations Group LLC, Resort Transfer Group LLC, Square One Development Group Inc., Square One Group LLC, Timeshare Help Source LLC, Farmington Allegiance LLC, Mainline Partners LLC, and two irrevocable trusts.
The case stems from a civil enforcement action filed in November 2022 by the Department of Justice, on behalf of the FTC, along with the Wisconsin Attorney General. The lawsuit targeted 16 defendants, including five individuals—Carroll, George Reed, Louann Reed, Scott Jackson, and Eduardo Balderas—and 11 companies and trusts they owned or operated.
Those entities included Consumer Law Protection LLC, Consumer Rights Council, Premier Reservations Group LLC, Resort Transfer Group LLC, Square One Development Group Inc., Square One Group LLC, Timeshare Help Source LLC, Farmington Allegiance LLC, Mainline Partners LLC, and two irrevocable trusts established in 2019.
According to the complaint, the defendants ran a Missouri-based operation that, since at least 2018, used direct mail campaigns and in-person seminars to market timeshare “exit services” to consumers nationwide, with a particular focus on senior citizens. Customers were charged large upfront fees—ranging from $5,000 to more than $80,000—with promises that the companies would help them terminate their timeshare contracts.
Authorities alleged those promises were rarely fulfilled.
Prosecutors said the scheme relied on high-pressure sales presentations conducted at hotels and restaurants across multiple states. During those events, sales representatives allegedly made false claims that consumers could not exit timeshare agreements on their own, misrepresented affiliations with legitimate timeshare companies, and warned that heirs would be burdened with escalating maintenance fees if contracts were not terminated.
The complaint further alleged that consumers were not informed of their legal right to cancel contracts within three business days, as required under the FTC’s Cooling-Off Rule. In some cases, customers were pressured into signing agreements that falsely stated they could not cancel, a violation of federal law.
Regulators said the defendants employed a range of deceptive tactics, including using logos of legitimate companies to imply endorsements, making misleading statements about consumers’ options, and invoking unfounded fears about financial consequences for heirs. The operation also advertised money-back guarantees that were rarely honored, according to the complaint. When customers sought refunds, the companies allegedly cited nonexistent litigation, the COVID-19 pandemic, or other false explanations before denying requests.
The court found that these practices violated the FTC Act’s prohibition on unfair or deceptive conduct, the federal Cooling-Off Rule governing certain sales made outside a seller’s normal place of business, and Wisconsin laws addressing fraudulent misrepresentation and direct marketing.
In its memorandum and order, the court concluded that Carroll was central to an unlawful enterprise that harmed more than 11,000 consumers. He served as president and chief executive officer of Square One Group, one of several corporate entities used to carry out the scheme, alongside Consumer Law Protection, Premier Reservations Group, Resort Transfer Group, and Timeshare Help Source.
Carroll was the last defendant to be resolved in the case. The court had previously entered permanent injunctions against 17 other defendants, including corporate entities held jointly liable for the monetary judgment. Four individual defendants agreed to stipulated orders totaling more than $11 million in penalties, much of which was suspended based on inability to pay.
The enforcement action also coincided with separate lawsuits filed by the attorneys general of Alaska and Missouri in June 2022 concerning similar conduct.
Federal officials said the case underscores a broader effort to combat fraudulent schemes targeting vulnerable populations, particularly older Americans.
“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.”
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said the defendants relied on coercive tactics to extract thousands of dollars from seniors for services that were not delivered, adding that the agency worked closely with federal and state partners to halt the scheme.
With the judgment finalized, authorities said the court’s order brings an end to a years-long operation that used deception and pressure tactics to exploit consumers seeking relief from timeshare obligations.
FTC Shuts Down Student Loan Relief Schemes, Secures Bans and Asset Forfeitures
Federal regulators have taken action against multiple student loan debt relief operations accused of deceiving borrowers, securing permanent industry bans and court orders to halt what officials described as widespread fraudulent practices targeting financially vulnerable consumers.
In one case, operators of an alleged transnational scam agreed to be permanently barred from the debt relief industry and to surrender more than $1 million in assets to resolve charges brought by the Federal Trade Commission. The agency said the scheme extracted millions of dollars from student loan borrowers through false promises of loan forgiveness and other deceptive tactics.
The settlement stems from a July 2024 complaint filed by the FTC against Florida-based Start Connecting LLC and Colombia-based Start Connecting SAS, which did business as USA Student Debt Relief, along with their owners and operators Douglas Goodman, Doris Gallon-Goodman, and Juan Rojas.
According to the FTC, the defendants falsely claimed affiliation with the U.S. Department of Education and its loan servicers to lure borrowers seeking relief. They allegedly promised low, permanently fixed monthly payments and full loan forgiveness, while charging illegal upfront fees for services that were never delivered.
Regulators said the operation collected more than $7.3 million in unlawful fees and payments. Consumers were told their monthly payments would be applied toward their loan balances, but instead, the defendants kept the money and funneled much of it to a call center in Colombia. The agency also alleged the companies promoted fake reviews and testimonials online to bolster their credibility.
Under the proposed settlement, the defendants are prohibited from misrepresenting affiliations with government entities, making false claims about loan forgiveness or repayment terms, charging advance fees, or using deceptive marketing practices, including fake testimonials. The order also bars them from engaging in debt relief services and unlawful telemarketing.
The agreement includes a $7.3 million monetary judgment, which is largely suspended due to the defendants’ financial condition, but requires them to turn over more than $1 million in personal and business assets. If authorities determine that financial disclosures were inaccurate, the full judgment could become immediately due.
“It is illegal for debt relief companies to make false promises and use fake reviews and testimonials to promote a business,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “The FTC will not hesitate to enforce the law against bad actors.”
Separately, the FTC has also moved to stop another alleged student loan debt relief operation, securing a temporary restraining order against companies NERD Solutions Inc. and ED REF Inc., along with their operators Natalie Rodriguez and Pablo Ortiz.
In a complaint filed in federal court, the agency alleges that since at least February 2022, the defendants used cold-calling tactics to target thousands of consumers, including individuals listed on the National Do Not Call Registry. The callers allegedly impersonated representatives of the Department of Education or legitimate loan servicers.
According to regulators, the defendants used those misrepresentations to persuade borrowers to enroll in purported debt relief programs, charging upfront monthly fees of up to $1,400. The FTC alleges the operation collected at least $8.8 million from consumers already burdened by student loan debt.
The agency charged the defendants with violating multiple federal laws, including the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act.
A federal court in the Central District of California entered a temporary restraining order in the case on April 13, 2026, halting the alleged scheme while litigation proceeds.
The FTC said both cases reflect ongoing efforts to combat deceptive student loan relief operations that exploit borrowers seeking financial assistance. The agency noted that legitimate help with federal student loans is available at no cost through official government channels.
The commission votes to approve the enforcement actions were unanimous in each case, and the matters remain subject to final court approval or adjudication.
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