Authorities in New Jersey, who accused a 59-year-old Greenwich resident of operating a Ponzi scheme, filed a lawsuit against him and his this week.
Acting Attorney General John Hoffman filed a lawsuit against Robert Paris and his brother, Thomas Paris, of New York, claiming that the men violated New Jersey’s Consumer Fraud Act by defrauding customers out of more than $1 million through their Bloomfield, New Jersey-based members-only travel company Crown Travel Services, also known as Club ABC Tours and ABC Destinations.
The brothers are accused of using members’ payments for futures to pay for earlier trips booked by other members.
“The two brothers who owned and operated these travel companies allegedly kept their business afloat by using money from new customers, to pay for trips booked by previous customers. When this scheme inevitably fell apart, hundreds of customers lost more than $1 million,” Hoffman said after filing the lawsuit against the men on Tuesday.
It is also alleged that after their company went belly-up, the brothers continued to accept money from members; money which authorities said was used by the brothers to maintain their lavish lifestyles.
Member Jane Riesel, of Fort Lee, who paid Club ABC more than $6,000 for a 10-day all inclusive tour of Italy not knowing that the company had already folded, said the first two days of her trip was fine but she soon learned that the rest of her trip was never booked or paid for.
“They knew that we were going to be stranded and they let us leave,” Riesel said.
Hoffman said the state of New Jersey “will use its full authority in an effort to recover the money [members] lost.”
He is asking that the brothers be compelled to give up all funds and property acquired through the alleged violations and to refund money.
Under the Consumer Fraud Act, a first violation is subject to a civil penalty of up to $10,000 and subsequent violations are subject to civil penalties of up to $20,000. Each deceptive practice or advertisement is considered a separate violation of the Consumer Fraud Act.
The New Jersey Division of Consumer Affairs received 230 complaints about the company totaling more than $1 million in losses.
