The Galveston Daily News from Galveston, Texas • Page 3

WEDNESDAY MORNING, NOVEMBER 11,1987 THE GALVESTON DAILY NEWS 3-A Timeshare fraud case to be tried in Galveston ByARLENEBATTISTA The Daily News GALVESTON A group accused of bilking $730,000 from at least 150 area residents will be tried in federal court here starting Nov. 30. In August, James E. Freese, 44, and four others named in a 30- count indictment were charged with mail and wire fraud in connection with allegedly selling bogus deeds for Galveston area timeshare properties. Indicted with Freeze were his wife, Carolyn Freese, 44; his brother, Richard Freese, 40; her uncle, Edward Robenolt, 59, all from Acapulco, Mexico; and Theodore Weiswasser of Dear- born, Mich.

One man with knowledge of the timeshare operation, James Shuman, terms himself as a key witness, but reportedly is hiding in Mexico and may not appear in the Galveston courtroom. Assistant. U.S. attorney Rusty Herman, said his job will not be tougher because of Shuman's absence. "I've got 150 victims," Herman said Tuesday from his Houston office.

"Those are the people who count." The victims allegedly paid anywhere from $2,000 to $10,500 in cash to purchase a timeshire unit in one of four area condominiums, he said. Under the timeshare concept, the owner is allowed to spend a week either in the condominium where purchased or in an affiliate timeshare unit, located in such places as Acapulco or Hawaii. Those who paid cash were reportedly given a phony deed, with the money allegedly going into the pockets of the indicted, Herman said. Thousands of others purchased units on credit, and according to investigators those transactions were legitimately handled. The federal indictment states that from March 1982 to July 1985 the group allegedly mailed fliers, made phone calls and gave away $5 bills to entice potential buyers to a sales presentation.

In all, thousands of people, most from Texas and many from the Galveston-Houston area, are be- lieved to have purchased a unit week. The group allegedly operated Sunward Resorts, Sunward Developers Sunward Sales and Four Seasons Sales the indictment states. Through these companies, they allegedly sold timeshare units for the Four Seasons and Captain's Cove, both on the island, Harbour Cove in Tiki Island and Peregrine Townhouses near Freeport. Of the condominiums used in the scheme, three have closed. The fourth is now known as Inverness By The Sea and is operating under new management.

The now- defunct Four Seasons is different from the timeshare of a similar name, which is still operating in Galveston. Each count in the indictment carries a maximum sentence of 150 years in prison and a $2.2 million fine, Herman said. The case will be heard by a Galveston County jury, U.S. District Judge Hugh Gibson presiding. Despite the large number of area victims involved in the case, Herman said he remains confident an impartial jury will be seated.

Witness in case in Mexico, says he fears for his life MEXICO CITY (AP) An American AIDS victim says he is hiding in Mexico because U.S. prosecutors won't protect him after three attempts on his life and have threatened to jail him if he does not testify at a fraud trial in Galveston. But Assistant U.S. Attorney Rusty Herman of Houston denies threatening to arrest James Shuman, 34, who says he was involved in the sale of time-shares at a Galveston resort. Herman also said he has not issued any subpoena for Shuman to testify later this month, saying Shuman has "got his story confused." "I am a citizen without a country.

I am dying of AIDS," said Shuman, of Columbus, Ohio, who is living in a second-rate downtown hotel near a hospital where he goes for daily treatment. "I am in a damned-if-you-do, damned-if-you-don't situation. If I stay in Mexico. 1 am going to be killed. If 1 don't go to Houston, Herman threatened to arrest me I am their key witness." he said.

Shuman said he is scheduled to testify in a federal court trial scheduled for Nov. 30 against James Freese and four other defendants charged with mail and wire fraud in connection with time-share sales inGalveston. It wouldn't be the first time for Shuman to testify against Freese. Earlier this year, he testified against Freese in Cobb County. where prosecutors called him an important witness.

Freese was sentenced recently to 50 years in Georgia and ordered to pay $132,000 for his part in a solar energy scam. "1 made myself totally open and vulnerable. Now I am running out of money, he tells me if I don't show up there will be a warrant out for my arrest. He is not giving me any protection," Shuman said of Herman. But Herman, who characterizd Shuman as a "top lieutenant" in the time-share operation, disputes Show features Dickens fest GALVESTON Dickens on The Strand will be featured on The Jovce Gay Report, Thursday at 7:30 p.m! on Houston Public Broadcasting Station Channel 8.

Entitled "A 19th Century Christmas," the production will show the magical transformation of Galveston's historic commercial district into The Strand of London during the life and times of Charles Dickens for this special pre-Christmas celebration. This year's Dickens on The Strand is'set for Dec. 5-6. his version, saying, "He is just one witness who tells a good story. I am not hurting for witnesses." Herman declined to say whether Shuman appeared before a federal grand jury in Houston and would not say whether he thought a jury would view Shuman as credible witness.

Shuman said he appeared before the panel on May 15. "I have ruined my stature in the (time-share) business because I am what you might call a turncoat. I went for the truth. I decided I had been on the wrong side of the fence, willingly but not knowingly," Shuman said. "What is so funny about it is that Herman would have never even have had the availability (of mv testimony) if I had not called Elissa sails him and said 'hey, I am here and 1 know what is going on and I want to make a he said.

Asked if he threatened Shuman with arrest if he did not appear. Herman said in a telephone interview, "No way, no. I told him if he absented himself from the country after being served with a subpoena, he could face criminal contempt charges. But he has not been subpoenaed. He's got his story confused." Shuman says he was shot at twice last year while living in Acapulco, where he worked with Freese in a time-share operation, and that a car tried to run him over near his hotel a few months ago.

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Several boats went out to greet and lead the Elissa, including The Alligator, captained by yachtsman Gene Wallet. On board were Biloxi Mayor Gerald Blessing and the mayors of Waveland, Ocean Springs, Long Beach, Gulfport, Bay St. Louis, Pass Christian and Gautier, as well as all Biloxi City Council members. A safe harbor was a welcome sight for crew members who had experienced 5- to 6-foot seas and winds gusting to 39 knots on the voyage from Beaumont to Biloxi. Elissa will be open for tours beginning this morning and continuing through Sunday.

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