Judge orders $1.6M payment in timeshare case

A Denver District Court judge has barred Louis Welt from the securities industry in Colorado and ordered him to pay $1.6 million in connection with a resort timeshare scheme, state Securities Commissioner Fred Joseph said Tuesday.

Welt, a resident of Boulder, sold condominium timeshare investments to Colorado investors -- mostly seniors -- in a company called Resort Holding International (RHI), according to a complaint filed by Joseph against Welt in Denver District Court in April.

Welt told investors that RHI owned 11 resort properties, mostly in Cancun, Mexico. Under the company's so-called "Universal Lease Program," the investor also hired a third-party management company to rent and manage the condominium. Welt allegedly guaranteed investors a 9 percent annual return for 25 years.

But none of the investors ever saw a 9 percent return, and most lost their entire investment, Joseph said.

RHI has also been known as Yucatan Resorts, Avalon Resort, Majesty Travel, World Phantasy Tours and Galaxy Property Management, Joseph said.

Michael Kelly, the purported owner of RHI, was indicted by the U.S. Attorney's office in Chicago and arrested by the FBI in December 2006 for operating RHI in what the FBI called a $400 million Ponzi scheme, the state securities commissioner said.

"I encourage investors to call our office," Joseph said in a statement. "With a simple phone call, we could have told investors that Mr. Welt was not licensed to sell securities in Colorado, and provided to the investor information about the numerous cease-and-desist orders from other jurisdictions that were in effect against RHI at the time."