Michael Eugene Kelly, Michael Kelly, Jr., Yucatan Resorts, Majesty Travel, Resort Holdings Intern'l, Avalon Resorts, Universal Lease, World Phantasy Tours, Galaxy Property Management, S.A. rip-off! Scam! Mexico, Panama, Nevada, Arizona, Conneticut, South Carolina, Indiana

The IP Fund 1 complaint takes a big bite out of the wrongdoers and the SEC only paints a picture of greed, it has a lot of bark and no bite. I have seen this before and it is very important for everyone to come together under one voice! We expected this to happen and are ready to meet them head on. I believe we will be on the winning side of the argument.

Joel Held one of RHI attorneys wrote in a case filed in Texas claiming securities fraud and RICO: "It is as if the Fifth Circuit of Appeals was referring to the complaint in this action when it observed:" "A Complaint can be long-winded, even prolix, without pleading particularity. Indeed, Such a garrulous style is not an uncommon mask for an absence of detail" Southland Securities Corp. v. Inspire Insurance Solutions, Inc., F. 365 3rd 353,362 (5th Cir. 2004)

The SEC complaint is a classic example of an ill-conceived, shotgun pleading in search of defendants and cause of action to justify a SEC-Receivership. They already state the leaseholders have lost their money. "The fraudulent Universal Lease scheme eventually collapsed, leaving investors with losses that exceed $300 million."

What losses! RHI and other asstes are there and can be claimed to pay the leaseholders.

We all know at this point that Kelly and his family owned and controlled RHI and the other companies. It appears that the SEC is more concerned about the brokers than real justice!

In any case, we will challenge any SEC-Receiver appointment of their own receiver "the fox garding the chickens" and request that the court appointed receiver be the RMG group made of leaseholders. We are in for a fight and what we want has been done before by another group.

SEC Charges 26 Defendants in $428 Million Securities Fraud That Targeted Senior Citizens and Retirement Savings Commission's Crackdown on Financial Fraud Against Seniors Continues

FOR IMMEDIATE RELEASE
2007-172

Washington, D.C., Sept. 5, 2007 - The Securities and Exchange Commission today filed charges stemming from a $428 million securities fraud that victimized thousands of seniors and other investors throughout the United States.

The SEC's action, filed in federal district court in Chicago, Ill., charges 26 defendants and alleges that they participated in a massive fraud that involved the sale of securities in the form of "Universal Leases." The investments were structured as timeshares in several hotels in Cancun, Mexico, coupled with a pre-arranged rental agreement that promised investors a high, fixed rate of return. The fraudulent Universal Lease scheme eventually collapsed, leaving investors with losses that exceed $300 million.

The case is part of the Commission's crackdown on financial fraud against senior citizens, which has already resulted in more than 40 enforcement actions over the past two years.

In the latest action, the SEC alleges that Michael E. Kelly and those working with him duped thousands of U.S. investors into using their retirement savings to buy Universal Leases on the false promise of safe and guaranteed returns. The SEC alleges that from 1999 until 2005, Kelly and others raised at least $428 million through the Universal Lease scheme from investors throughout the United States, with more than $136 million of the funds invested coming from IRA accounts. The SEC further alleges that a nationwide network of unregistered salespeople who sold the Universal Leases collected undisclosed commissions totaling more than $72 million. For most of the scheme, the complaint alleges, Kelly and his organization used new investor funds raised in the scheme to make illusory "rental income" payments to Universal Lease investors. The SEC also alleges that Kelly and others ran the scheme from Cancun through a number of foreign entities in Mexico and Panama.

"This case illustrates the Commission's continuing commitment to hold accountable those who prey upon the retirement funds of older Americans," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "Kelly and his cohorts told investors they were purchasing a safe, high-income investment suitable for a retirement account. In reality, investor funds were at grave risk as investor funds were used in a way that guaranteed the collapse of the scheme."

Merri Jo Gillette, Regional Director of the SEC's Chicago Regional Office, added, "Kelly and those involved in his operation may have hoped to evade U.S. law enforcement by operating the Universal Lease scheme from abroad. The action we filed today shows that the SEC will vigilantly pursue those who target older Americans, no matter what the obstacles. The SEC plans to aggressively seek recovery from the defendants to offset the huge losses they inflicted on investors."

According to the SEC's complaint, Kelly and others told investors that Universal Leases would generate guaranteed income through the leasing of investor timeshares by a large, independent leasing agent. In fact, the complaint alleges, the leasing agent was a small Panamanian travel agency controlled by Kelly, and for most of the scheme its payments to investors came from accounts funded by money raised from new investors. Further, the complaint alleges that Kelly and the other defendants failed to disclose several key facts about the Universal Lease investment, including the risks of the investment and that more than $72 million in investor funds were used to pay commissions as high as 27 percent to the selling brokers.

The SEC's complaint names the following individuals and entities as defendants: Kelly, Michael P. Kelly, Donald L. Kelly, John Corwin, Corporativo Nola, S.A. de C.V. Resort Holding International (RHI) S.A., Panorama Communities, S.A., World Phantasy Tours, Inc. (Viajest Fantasia Por El Mundo, S.A.), also doing business as Majesty Travel, Galaxy Properties Management, S.A., Yucatan Resorts, S.A. de C.V., Resort Holdings International, S.A. de C.V. The complaint also names as defendants a number of the unregistered brokers who sold the Universal Leases to the investing public. They are: Mark Ruttenberg, Ruttenberg and Associates Financial Marketing, Inc., Mark G. Meyer, Mark Meyer and Associates, Inc., Richard E. Riner, Southwest Income Marketing, Inc., George Phelps, also doing business as Safe Estate Plans, John E. Tencza, also doing business under the name of American Investment Management Group, Inc., American Elder Group, L.L.C., Carl Q. Lee, Carl Lee and Associates, Inc., Roy D. Higgs, Warren T. Chambers, William K. Boston, Jr. and Century Estate Planning, Inc. Finally, the complaint names Avanti Motor Corp. and DMK Properties, L.L.C., two entities affiliated with Kelly, as relief defendants, alleging that they received ill-gotten gains from the scheme.

The SEC's complaint charges the defendants with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. The SEC acknowledges the assistance of the German government (Bundesanstalt fr Finanzdienstleistungsaufsicht), the Mexican government (Comisin Nacional Bancaria y de Valores) and a significant number of state securities agencies.

Combating financial fraud against older investors will be a focus of the Commission's second annual Seniors Summit in Washington, D.C., on Sept. 10. The Summit also will include the release of findings from regulatory examinations of 110 firms offering "free lunch" investment seminars aimed at seniors.

The SEC's Seniors Summit will begin at 10 a.m. ET on Sept. 10 and will be webcast live on the SEC Web site at www.sec.gov. The event will further examine how regulators, community organizations, and others can increasingly coordinate efforts to educate older Americans and protect them from abusive sales practices and investment fraud. Registration information and other materials about the Seniors Summit are available at: http://www.sec.gov/spotlight/seniors/seniors_summit.htm.

# # #

For more information, contact:

Merri Jo Gillette
Regional Director
312-353-9338

Timothy L. Warren
Associate Director
312-353-7394

John J. Sikora, Jr.
Assistant Director
312-353-7418

SEC's Chicago Regional Office

Additional materials: Complaint


http://www.sec.gov/news/press/2007/2007-172.htm


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IP FUND 1
January 10, 2007

Dear Lease Holder,

This is our first update to all our members by mail and I want to wish you all a happy new year. I do want to encourage you to register for our emails so that you can receive our ongoing information. I also want to let you know we have moved and the new address is on the bottom of the second page. Our phones have been down for a few weeks because AT&T would not allow us to continue with the phone number we have had for 16 years, so we changed phone companies and are taking our phone number with us.

The Fund placed the IRA Custodians and the State of Wisconsin Division of Securities on notice of Kelly's fraud and also placed notices on the Internet.

Here is a small excerpt from one letter to a Custodian 3/06: RHI and its principles are involved in a $450 million scheme. There are ongoing FBI investigations surrounding RHI's and Kelly's fraudulent enterprise. Mike Kelly (Kelly), RHI and their co-conspirators are attempting to use IRA Custodians to further their fraudulent enterprise by asking the Custodians to forward an offer to buy back the leases for 75% of their purchase price without reimbursing the owners for the past due rental income. IP Fund 1 Inc. (the Fund) and its members are placing the IRA Custodians on notice that there is an ongoing effort by the Fund to file a formal Racketeer Influenced and Corrupt Organizations.

The Fund has been very active, we have held our cards close to our chest and it has paid off. The FBI arrested Kelly on December 22, 2006 in Florida. This is a good thing and will help the Fund's RICO complaint. Here is what the FBI is claiming:

Associated Press
December 28, 2006, 7:04 AM CST
CHICAGO -- FBI agents have arrested a man on charges that he used time-share leases in Mexico to bilk real estate investors, including several in Illinois, out of $400 million. Michael E. Kelly, 57, allegedly sold "universal leases" on time-share properties and promised buyers an 11 percent returns on their investments, according to a criminal complaint released Wednesday. Kelly, of Cancun, was arrested Friday in Jacksonville, Fla. He is in custody in Florida and will be brought to Chicago to face federal mail fraud charges, officials said.

It is not immediately clear who Kelly's lawyer is. Authorities allege that he told investors that a third-party company would rent their time-shares. He also allegedly guaranteed high returns even if the properties weren't rented. But Kelly owned the third-party company and paid out the returns to investors himself, authorities allege.

Eventually he stopped making payments and instead spent investors' money on a lavish lifestyle that included a private plane and a large yacht, officials said. He allegedly netted $400 million from the late '90s to 2004. Jennifer French, a financial institutions fraud special agent for the FBI, said investors didn't see the red flags in the deal until it was too late. "Many of these folks eventually said it was just too good to be true, but the victims were diverse," French said. "Some of these people were sophisticated investors."

I am sure more arrests are to come.

The Fund's investigation uncovered 24 conspirators who may be named in our complaint or turned over to FBI and we will work with the FBI to get a handle on Kelly's and his conspirators ill-gotten gains and assets. We can now serve Kelly with our RICO complaint in jail; this should force a Receivership showdown. We will ask the court to allow the leaseholders to take over all the companies that received leaseholder money from Kelly or were started with leaseholder money, however, the government will not go away quietly. "The most terrifying words in the English language are: I'm from the government and I'm here to help." - Ronald Reagan. The agency in charge will want the court to allow them their own receivership claiming it is to protect the investors, however, the Receivership process can be a wolf in sheep's clothing.

It will be a dogfight to keep the government out as a receiver now that Kelly has been charged with fraud. The law is on the side of the investors, however, no one is ever on the ready to derail the appointment. This is why the government always appoints its own receiver who will charge millions in fees to "investigate wrongdoing" and the victim's recovery is always secondary.

There will also be attorneys surfacing, wanting to represent you for a fee of 30% - 50% of your recovery. Do not surrender your money. As members of the Fund, your claim will be pursued and the Fund will pay for the attorneys from the membership fees, no attorney's fee will be taken from the recovery.

It is more important than ever to have the leaseholders come together to take a stand. We propose to form a new company made up of leaseholders. The board of directors to head up this new company will also be leaseholders who will not take a paycheck and will act in the best interest of the leaseholders. This will cut out millions of dollars of expenses for a FTC or SEC Receivership. If you would like to be considered as a board member please fax us your resume to: 210.828.0096 or 7088.

For those leaseholders and brokers sitting on the fence, there is no time to take a wait and see attitude! It is time for the leaseholders to come together, When spider webs unite, they can tie up a lion!

Why join the IP Fund 1? Your membership is the best way to take action to recover your money without the expense of an FTC or SEC Receivership In most cases the Receiver and his attorneys receive most, if not all, of the money in fees. Receiverships are well known for taking all the assets and leaving the investors high and dry. I am guardedly optimistic the Lease Holders can recover their money without this type of receivership and since when does a victim have to pay for their own investigation?

For more infromation please send your request and include your full name and contact information.


Very truly yours,
Ernest Bustos

CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.

I to am a victim of mike kellys "universal lease scam" to the tune of thirty three thousand dollars.I live in west virginia, and was led to believe this was a good sound investment which was insured against any problems which was stated
in the contract I signed.

The person who sold me this universal lease, was Rodney L. Hinkle a local person who was with the Heritage Living Trust, home office in scotts valley california. Mr hinkle has been fined in maryland and given a ceast and desist order there as well as pennsylvania and florida by the S.E.C. This did not stop him as he conned me after this in 2003.

I would love to find his location to have him brought back to west virginia and prosecuted for his involvement in this "ponzi scheme." I also believe that Resort Holdings International in mexico owned by mr kelly should have to
return peoples original investment along with rental income not paid to investors.

There is much more to tell about this four hundred and fifty million dollar "scam" but much of it has already been spoken of in other articles on the net. In closing I hope there is someone who may be able to help "the little guy."

sincerely,
sam

Michael Kelly appeared at his detention hearing in Chicago today. He was denied the right to bail since he has no assets in the US and is a flight risk. The case against him is overwhelming and he is facing 53 years in jail for defrauding thousands of retirees. He actually had the nerve to state that he only makes $55,000 a year and has a meager $48,000 in assets.

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire

MICHAEL EUGENE KELLY , of Resort Holdings Intl.was arrested today in Jacksonville Fla. according to the AP wire

My parents were also ripped off by these same people and others while living in Missouri and had similar exeriences. I need to know how to contact the appropriate people to find out how to proceed or join with others in recovery of funds invested.

Thank you for the help,

Rollin

We have been in contact with the FBI here in virginia......they know where Kelly lives ,in panama....the agent is working the case as of now and he claims complaints keep comming in, we also had over 200,000 invested...there are many people here in va. that have invested money in thids so called company(Resort holdings Intl).We will try to keep you updated on any news.... william in va.

My in-laws were equally ripped off by these guys to the tune of $200,000 while they were in Texas and had similar experiences (I'm filing a separate report). I need to know how to make contact with those that have posted here.

We are one of the investors in Yucatan originally and went through the chain of entities that were connected with Michael Kelly. We trusted the broker as he had invested other things for us and we had not been scamed but we believe that he was scamed also.
We invested two IRA's plus a lot of other money which we can ill afford to lose since we were depending on that money to help support us. Now we are in a world of hurt over money. We cannot get in touch with anyone on this as to what we should do and to see if we have a chance of recovery at all.

We were also told we could get our money back when the leases ran out which all of ours have done now. We haven't gotten any income in over a year.

We would appeciate any information that would be helpful to us. We were wondering if any kind of suit is going to be or has been filed in Texas.

Thanks for all information and help.

As some of you already know, Mike Kelly of RHI stopped paying the Lease Holders their rental income over a year ago and is attempting to buy back the leaseholders' leases for less than the full price paid. I do not want to alarm the Lease Holders, however, the leaseholders must take steps to protect their rights so that your money and your rental income can be fully recovered. This is why I am proposing the Lease Holders join with other leaseholders to remove the current management.

Regulators in at least six other states have taken formal action against one or
more of the following: Michael E. Kelly of South Bend, Indiana, Yucatan Resorts, Inc., Cancun, Mexico and South Bend, Indiana; Resort Holdings International, Inc., Cancun, Mexico and South Bend, Indiana; World Phantasy Tours, Inc., Panama. Kelly, Yucatan, Resort Holdings and World Phantasy. These states forced Kelly and his companies to pay back 100% of the money collected by Kelly's Universal Lease Program. However, Regulators failed to collect the leaseholders' rental income.

Mr. Kelly made many misrepresentations: Kelly represented to leaseholders that if
they left the rental income to accumulate; RHI would pay as high as 11% interest. In reality, RHI, Kelley, and his co-conspirators have wasted, secreted, and otherwise dissipated the lease purchasers' funds, revenues, and other assets acquired and held in connection with the sale of RHI. Though RHI has collected the sums of rental income due and credited the accumulated interest to the accounts, RHI has not paid the leaseholders their monthly rental income. RHI has also refused to release the accumulated rental accounts. Kelly and his co-conspirators are attempting to defraud the leaseholders by claiming that Galaxy and Majesty are separate from RHI, Kelly, and his co-conspirators. On that claim they escape liability by asking owners to seek the rental income from Galaxy/Majesty. However, Galaxy is not independent from RHI and is controlled by Kelly and Kelly also controls Majesty. As many as 80% of the leaseholders have not received a dime of their rental income, which could be as much as $200 million. RHI, Kelly, and his co-conspirators are running the classic shell game. When a leaseholder looks underneath the wrong shell the corporation's funds are gone and the leaseholders lose.

In the Arizona complaint on RHI and Kelly The National White Collar Crime
Center stated, "A detailed investigation revealed that investor funds were shuttled between numerous US-based financial institutions and later wired to undisclosed locales, including dozens of companies and individuals in Mexico." Classic Money Laundering!

What needs to be done and how should it be done? The IP Fund 1 Inc a Texas Corp intends to file a complaint of fraud on behalf of its members, the Lease Holders, and to petition the court to allow the Lease Holders to remove Kelly along with RHI's current management and replace them with a committee of Lease Holders. They will oversee the operation and hire a new management team. They will determine what courses of action should be taken for the best interests of the Lease Holders. Even though there are no guarantees in any action, I believe this is the best way for leaseholders to pursue their recovery.

Very truly yours,
Ernest

I WAS ALSO INVESTED IN THIS SHAME COMPANY. THE PERSON THAT I THOUGHT WAS OK, MAN I WAS WRONG HE IS JUST AS BIG OF A RIP OFF ARTIST AS KELLY. HIS NAME IS RICK GREEN.

I TO HAD TO JUMP THROUGH THERE HOOPS BUT I REFUSED TO WRITE A LETTER I WENT IN AND TOLD THEM THAT I WANT MY MONEY. IT TOOK THEM APPROX. 2 MONTHS TO GET SOME OF IT BUT NOT ALL. LIKE I TOLD RICK GREEN IT IS MY MONEY AND NOT HIS. THEN THEY TRIED TO GIVE ME A GLOBAL CASH CARD.

HERE IS ANOTHER JOKE, YOU CANNOT GET ALL OF YOUR MONEY OFF THE CARD. OR YOU HAVE TO FIND A PLACE TO USE IT AND THERE IS A LIMIT TO WHAT YOU CAN TAKE OFF OF IT.

I AM KNOW PHONING MEXICO ABOUT EVERYDAY TRYING TO TALK TO SOMEBODY THAT KNOWS WHAT IS GOING ON. I HAVE TRIED TO TALK WITH JOHN CORWIN, HAROLD, AND EVEN KELLY HIMSELF, BUT I HAVE NOT HAD ANY LUCK. I FINALLY TALKED TO CARLO AND BEN. THEY ARE AT LEAST TRYING TO HELP BUT THE OTHER COWARDS WILL NOT RETURN MY PHONE CALLS OR EMAILS.

IF ANY OTHER WOULD LIKE TO CONTACT THESES COWARDS THE NUMBER IS 1-866-644-4164 AND FOR THE CAMALOT GROUP IN BLOOMINGTON ILLINOIS AND TALK TO ONE OF KELLYS HIGHER UPS IS RICK GREEN 1-309-661-1780. MAKE SURE THAT YOU LET THE ANSWERING MACHINE GO THROUGH THE OPTIONS BEFORE YOU CHOOSE HIS NUMBER.

THE GLOBAL CHECK CASHING CARD THE NUMBER IS 1-866-395-9200. THIS IS ANOTHER KELLY (RICK GREEN) ITEM OF INTEREST.