Glen Ivy Fined $200,000, Will Hire ‘Watchdog’

Glen Ivy Financial Group has agreed to pay $200,000 in fines and expenses and to employ a former state investigator as a consumer watchdog to settle civil charges that it misled customers.

The Riverside County district attorney, who led a raid on Glen Ivy’s offices early this month, said Monday’s settlement was just “Chapter One” in a two-pronged action against the nation’s largest time-share company and some of its officials.

The district attorney, the California attorney general and the state Department of Real Estate are still investigating possible criminal actions by some Glen Ivy officials. Neither Glen Ivy nor any of its executives has been charged with any criminal wrongdoing.

Results of the criminal investigation are not expected for at least a month, said Riverside Dist. Atty. Grover Trask II. Though a number of officials are possible targets, Trask said Glen Ivy itself would not be charged in the criminal case.

Trask said Monday that his office now has evidence indicating that some Glen Ivy time-share customers were not given ownership deeds to property they purchased.

More than 100 law enforcement authorities raided Glen Ivy’s offices Dec. 10 after some former and current employees claimed the company had oversold time-share resorts in the late 1980s through an elaborate system of forgery and secret computer codes. The company has denied those charges.

The agreement announced Monday prohibits the company from engaging in some of the activities that are also the subject of the criminal investigation. For instance, Glen Ivy cannot sell a time-share property unless it first gets the owner’s permission or goes through a foreclosure proceeding.

Some company officials are under investigation for allegedly forging the signatures of inactive or defaulted owners on deeds in order to resell those units to new customers. The company has said it has no reason to believe the accusations are accurate. The injunction also requires the company to pay restitution to a select group of customers who have discovered that their deeds have not been recorded as required by law.

Several former and current Glen Ivy managers have said in interviews with The Times that the company deliberately did not record hundreds--and possibly thousands--of deeds because some resorts were oversold. Those who complained got recorded deeds--public proof of ownership--as space became available, employees claim.

Glen Ivy officials deny these accounts and say it can take “three months to three years” to record a time-share deed in a few location, such as Hawaii, but said 95% of transactions close escrow within 90 days.

A Glen Ivy spokesman has acknowledged that the company may have sold more time-share units than space allowed because company sales offices throughout Southern California were operated independently of one another in the late 1980s.

By the end of every month, however, 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 customers the opportunity to switch to a different resort.

Regulators and Glen Ivy’s attorneys spent days negotiating the civil agreement, which allows the company to remain in business and thereby protects its 1,400 employees and 60,000 time-share owners.

“The point of (the civil agreement) was to protect the consumer,” said Deputy Atty. Gen. Jerry Smilowitz. “It was never the goal to destroy the company.”

Ralph Mann, company founder and chief executive, has agreed to pay $50,000 in fines and regulatory expenses as part of the settlement.

An unusual aspect of the settlement is the appointment of O. Odell Moon, a certified public accountant and former investigator with the state Franchise Tax Board, as a “compliance officer” at Glen Ivy. He will be responsible for ensuring that Glen Ivy officials obey all state regulations governing the time-share industry.

Glen Ivy, which operates 24 resorts in eight states, has agreed to deposit $100,000 in a trust fund to pay Moon’s salary and expenses.

Moon will report to the Riverside Superior Court every 45 days with his findings.

Glen Ivy Ruling

The permanent injunction issued Monday imposes various requirements on Glen Ivy Financial Group, including:

* Offering restitution to a select group of consumers.

* Recording grant deeds at close of escrow.

* Complying with state laws governing contests used to attract potential buyers.

* Refraining from untrue, deceptive or misleading claims in sales presentations.

* Refraining from selling a time-share property without the owner’s permission or a foreclosure judgment.

* Refraining from altering grant deeds without permission of either customers or a court.

Los Angeles Times