Glen Ivy Accused of Routine Forgery
Glen Ivy Financial Group oversold time-share contracts to hundreds--possibly thousands--of customers in the late 1980s by using an elaborate system of forgery, secret computer codes and color-coded billing statements, several former and current employees alleged in interviews this week.
One mid-level manager said Glen Ivy sold at least 2,000 time-share weeks that had already been deeded to other customers at resorts in Laguna Beach, Palm Springs, Hawaii, and Lake Havasu City, Ariz.
“I’d say a good 2,000, possibly more,” were oversold, said the manager, who asked not to be identified, fearing reprisal from Glen Ivy.
Glen Ivy, which has 60,000 customers, was raided last week by more than 100 local and state regulators conducting two separate investigations of the Corona company’s sales practices--one civil and one criminal.
The company has adamantly denied accusations that it oversold resorts or forged the signatures of customers on certain documents. Neither the company nor any Glen Ivy executives have been charged with wrongdoing.
Sources said Glen Ivy hopes to settle any civil accusations against it as early as next week in a bid to convince lenders, time-share owners and its 1,400 employees that it can weather this storm. The criminal investigation, however, is expected to take much longer.
Former and current employees, however, contend that the company set up an elaborate computer system with secret codes to differentiate between owners and non-owners, who were allegedly put on a waiting list until time-share units became available and they could be given a recorded deed--public proof of ownership.
Different-colored billing statements--blue for owners and red for non-owners--also enabled a handful of managers to distinguish between the two different categories, several employees said.
Some customers, managers said, had to wait up to two years to get their deeds recorded.
Westminster residents Norma P. Hamilton and Lavaughn P. Ayers bought a week at Glen Ivy’s Pono Kai resort in Hawaii on May 10, 1989, but documents at the state of Hawaii Bureau of Conveyances indicate that the sisters did not receive a recorded deed until Aug. 29, 1990.
“We kept asking and asking and asking and really had to fight to get the thing,” said Hamilton, who with Ayers paid $8,000 in cash for the property.
Several employees contend that Glen Ivy could not record all of those who thought they owned time shares because a title company would quickly discover the alleged overselling.
But Glen Ivy officials said it can take “three months to three years” to record a time-share deed in a few select locations, including Hawaii, because of the great amount of paperwork pouring into those areas.
Hawaii Registrar Sandra Furukawa said Friday that her office did have as much as a year’s worth of backlogged deeds in the late 1980s.
Annie Atondo of Irvine bought two time-share weeks in April, 1989, at Glen Ivy’s Lake Havasu resort, but records indicate that one of those properties was not recorded until May 23, 1990.
Glen Ivy said Atondo’s case is not typical and that the second property did not record right away because of “an administrative error.”
The company said in a statement that singling out a few transactions “out of 90,000 is clearly not a fair representation of the practices of this company.”
A Glen Ivy spokesman acknowledged this week that the company may have inadvertently contracted out more time shares than were available because sales offices scattered around Southern California operated independently of one another in the late 1980s.
However, by the end of every month, the spokesman said, Glen Ivy reconciled purchase agreements with available time-share weeks and either refunded purchases made at sold-out resorts or offered those consumers a chance to transfer to a different location.
Glen Ivy strongly rebuts employees’ accusations and in a written statement this week said 95% of all customer purchases close escrow and are recorded at government offices within 90 days.
One of the central issues in the Riverside County investigation is whether certain Glen Ivy officials forged the signatures of defaulted or inactive customers on deeds, then resold those properties to different customers.
The company has adamantly denied those allegations in the past.
Two years ago, a company consultant said Peter Giummo, then Glen Ivy’s chief financial officer, had used a photographer’s light table to trace over customer signatures. A federal grand jury investigation was dropped after 11 months and no charges were filed.
Giummo’s home was raided last week in the county grand jury investigation, and a light table was found in his attic.