Guest Writer for The Timeshare Beat
May 29, 2000
In September of last year six men and one woman faced charges in the British courts on the issue that they defrauded
17,000 timeshare owners out of an estimated £30M (US$44,790,000). The charges related to the activities of
a number of companies in Tenerife, Canary Islands, and Brentwood and covered the period between 1990 and 1970.
Those charged were:
On May 2, in a surprise move, the Judge eliminated two of the five defendants from the current trial. John Palmer and Christina Ketley are both out on bail, and are facing a re-trial.
On May 25, after an 8-month trial, the jury returned a verdict of guilty on the other five defendants, who are
free on bail while they await pre-sentencing reports.
The majority of the defrauded timeshare owners were from Great Britain, though they included owners from most of
the European countries. The majority have not been able to get any of their money back.
According to solicitors trying the case at the Old Bailey, it was a "slick and professional operation"
involving "glib, fast-talking and untruthful salesmen" carefully trained to dupe ordinary holidaymakers.
The fraud involved an intricate network of companies allegedly run by John Palmer, and the systematic use of complicated
and deliberately misleading paperwork. Thousands of people were tricked into purchasing new timeshares with the
promise that the company would purchase the one they already owned and resell it themselves. This promise turned
out to be a lie, and the owners ended up with both their new purchase and their original purchase, with the obligation
to keep up payments on both.
Though with reputable companies such an arrangement is not unusual, and often takes the form of allowing a "trade-in" value on the old timeshare purchase, all too often this "buy/sell" pitch is a scam. In the Tenerife example, this turned out to be the case.
“They were tricked by lies," said David Farrer, QC, prosecuting, "by promises that timeshares that
they already owned would be sold very quickly if they bought a new one – leaving them the owners of two timeshares.
This became known as the 'buy-sell' scam.
“They were confronted with a ruthless system – a system designed to part them and their money as rapidly as possible
and make recovery of their money as difficult as possible.”
Farrer told the court that the victims of the fraud were "people of very ordinary means, modest incomes and
people on a pension or not in good health - the reality is it could have been one of us."
He added: "They were tricked by lies and promises that the timeshare apartments they already owned would be
sold very quickly if they bought a new one at a simply incredible price. It is one of the largest and longest-running
rackets to come before a court in this country."
The amazing thing to many people is that the accused continued to operate even though they knew they were under
investigation by the police.
John Palmer is considered one of the richest men in Great Britain. He has for many years controlled a large timeshare
empire in Tenerife, believed to include some eleven resorts as well as other interests in Tenerife, the Mediterranean
region and England.
Coverage of the case in the British newspapers has been spotty due to the fact that on September 22 the Judge imposed
what Americans call a "gag order", precluding the publication of John Palmer's name in relation to the
case. Since any reporting without the mention of his name was essentially impossible, this ruling effectively blocked
much mention of the case.
A date for the re-trial of Palmer and Ketley is pending.