A Springfield man pleaded guilty in federal court July 28 for crimes related to his role in "timeshare exit" businesses, according to a news release from the United States Attorney office.
Brian Scroggs, 54, pleaded guilty to one count of wire fraud and one count of failure to pay employment taxes, the release said. Scroggs owned and operated several companies that took large sums of money from customers with the promise to either transfer or terminate their consumer timeshare contracts within a year.
In the past seven years, Scroggs has been sued by both the states of Missouri and Arkansas for his business practices. Court records indicate that Scroggs owned and operated several businesses, including Vacation Consulting Services, LLC., The Transfer
Group, VCS Communication, LLC., and Real Travel, LLC.
"Scroggs took monies from each of his clients while making promises that guaranteed he would either get his clients out of their times shares, give each client a full refund, or assume financial responsibility over the client’s time share moving forward," the news release said. He failed to fulfil those promises.
In addition to that, he employed sales and administrative employees, whom he collected employment taxes from and then failed to pay those funds to the Internal Revenue Service or the state of Missouri, and failed to pay any matching funds he was obligated to pay as the owner and operator of the businesses.
A sentencing hearing is not yet scheduled. Scroggs is subject to up to 20 years in federal prison without parole and a maximum fine of $250,000 for the wire fraud. For failure to pay employment taxes, Scroggs is subject to up to 5 years in prison, a maximum fine of $10,000, or both.
Scroggs has faced legal repercussions before
In 2021, a Benton County, Arkansas, court ordered Scroggs and his company, Real Travel, to pay a $2.6 million judgment, following a separate October judgment that required Scrogg's co-defendant to pay $50,000 in restitution and $450,000 in suspended civil penalties, according to previous News-Leader reporting.
At that time, 88 consumers across the country collectively paid the timeshare-exit company "millions" to get out of their vacation contracts, Arkansas' then-Attorney General Leslie Rutledge wrote in a press release.
"Dishonest timeshare exit companies need to understand that they have no place in Arkansas," Rutledge said in a prepared statement, according to News-Leader reporting. "Instead of helping people, Real Travel left consumers with unwanted timeshares and additional debt. That’s why I made it a priority to hold them accountable for their inexcusable deceptive practices."
In 2020, Missouri's then-Attorney General Eric Schmitt announced he was taking legal action against Scroggs for his business practices.
"The corporate defendants were merely a cloak used by defendant Scroggs as a subterfuge to continue to perpetuate his fraud," the attorney general's office wrote in its July 1, 2020, complaint in Greene County circuit court.
Schmitt's lawsuit also accused Scroggs and his companies of telling clients to stop paying regular maintanance fees to timeshare developers, because the exit group would cover those costs. Customers who trusted that promise ended up being late on bills owed to the resort developers because Scroggs and his companies didn't make the promised payments, according to previous News-Leader reporting.
This article originally appeared on Springfield News-Leader: Springfield man pleads guilty in timeshare exit business scheme
