Attorney General Cuomo Announces Wny Travel Operator Indicted For Selling Phony Travel Vouchers
BUFFALO, N.Y. (June 30, 2009) - Attorney General Andrew M. Cuomo today announced that a Western New York travel company owner was indicted for allegedly selling more than $100,000 in cruise packages to non-profits and other organizations without ever booking their trips.
A Niagara County Grand Jury charged Joseph Ehrenreich, 40, of Oakwood Drive in Pendleton, owner of Destination Management Group of Buffalo, with one count of Scheme to Defraud in the First Degree (E felony), 9 counts of Grand Larceny in the Third Degree (D felony) and 11 counts of Grand Larceny in the Fourth Degree (E felony). The top charges each carry a maximum penalty of seven years in prison. Ehrenreich was arraigned before Niagara County Judge Matthew Murphy who set bail at $20,000 cash or bond. The trial date is set for November 23.
Alleged victims of Ehrenreich’s scam include volunteers, employees, and supporters of area non-profits, including the Hospice and Palliative Care Group of Niagara County, the Meals on Wheels Foundation of Western New York and the Beechwood/Blocher Foundation.
“Posing as a legitimate travel agent, this individual allegedly ripped off more than $100,000 from Buffalo-area residents and cash-strapped not-for-profits,” said Attorney General Cuomo. “The list of alleged victims is astonishing: from Meals on Wheels, to a hospice center, to a cancer patient celebrating the completion of treatment. My office will continue to root out these kinds of scams, shut down the perpetrators, and protect consumers across New York.”
According to previously filed court documents, Ehrenreich operated Destination Management Group (DMG) from his home in Niagara County, offering businesses and other organizations a program where they could pay to have unlimited access to cruise vouchers. The client organizations - many of them non-profits - would then distribute the vouchers as fundraising tools, marketing incentives or employee rewards.
Ehrenreich allegedly claimed he would handle all the travel arrangements for the vouchers, citing his purported relationships with major cruise lines and his memberships with the International Airlines Travel Agents Network (IATAN) and the Cruise Lines International Association (CLIA). In fact, he was not affiliated with either association. Popular cruise lines, including Royal Caribbean, Norwegian, Holland and Carnival, all deny having any relationship with DMG or Ehrenreich and indicated that the invoice confirmation numbers he used were fictitious. IATAN also confirmed that the organization had never accredited neither Ehrenreich nor DMG. Ehrenreich also allegedly used the cruise lines’ logos on his Web site and vouchers without their permission.
According to court papers, those who received the vouchers from the client organizations would contact and/or meet with Ehrenreich to discuss scheduling of the cruise of choice. He often convinced the consumers to upgrade their vouchers, charging them thousands of dollars more. Ehrenreich would then require consumers to make immediate payment by check or cash to “hold” the reservation - he would not accept credit card payments. After receiving payment, Ehrenreich would issue an invoice with phony cruise line confirmation and IATAN accreditation codes.
However, consumers who called the cruise lines to confirm their reservations or check the status of the cruises then found out that Ehrenreich never booked any of the cruises and that he had kept the payments. Many victims only learned that their cruises were not booked when Ehrenreich filed for bankruptcy. In some cases, when consumers became suspicious, Ehrenreich attempted to conceal his theft by obtaining their credit card information and then using it to purchase trips for which they had already paid.
According to the complaint:
A volunteer from the Hospice and Palliative Care Group of Niagara County received a complimentary cruise voucher at the group’s holiday party, spent thousands of dollars to upgrade the trip and later found out no cruise was booked when she contacted the cruise line. Upon complaining to Ehrenreich about the discrepancy, he allegedly reassured her that the cruise line was mistaken and there was indeed a booking. She later learned that Ehrenreich obtained her credit card information and used it to pay for a cruise that was supposed to have been already paid for.
Another consumer received a DMG cruise voucher at the Hospice and Palliative Care Group of Niagara County’s holiday party. The consumer, who wanted to bring her granddaughters on the cruise, paid almost $4,000 for the cruise, travel insurance and airfare. After she repeatedly tried to reach Ehrenreich, he finally assured her that her cruise had indeed been booked. However, when she contacted Carnival directly, she learned that the reservation was never made.
A magazine, After 50 News, donated a voucher to a benefit being held for Police Officer Patricia Parete, who was seriously injured in the line of duty and to the Beechwood Continuing Care fundraiser. A consumer won the voucher and upgraded the cruise voucher for over $3,000. Months later, the consumer contacted the cruise line and was informed that a reservation was never made.
Another consumer attended the Twelfth Annual Auction and Food Extravaganza Fundraiser for the Beechwood/Blocher Foundation and submitted a winning bid of $1,200 for a cruise voucher donated by After 50 News. When the consumer attempted to register his certificate with Ehrenreich, he learned that he had filed for bankruptcy. The Beechwood/Blocher Foundation reimbursed the consumer for the amount of his bid.
Another consumer received a cruise voucher from After 50 News, which he planned to use to celebrate his daughter’s completion of cancer treatments. Ehrenreich claimed to book a five-day cruise and demanded immediate payment. The consumer’s daughter delivered a check for $1,375. After several unsuccessful attempts to reach Ehrenreich after making the payment, the consumer contacted the cruise line and found out that the cruise was never booked and that the confirmation and IATAN numbers listed on the invoice were fraudulent.
Two consumers purchased a cruise package for $1,400 at a fundraiser for the Meals on Wheels Foundation of Western New York and upgraded their cruise for over $5,000, which included the cruise, airfare and trip insurance. After paying Ehrenreich, the consumers contacted Celebrity Cruise Line in early 2008 and learned that their cruise was never reserved. After the Hospice and Palliative Care Group of Niagara County learned that the cruise vouchers it provided to volunteers, employees and donors were fraudulent, the organization took it upon itself to reimburse those individuals in the amount of $18,000.
Attorney General Cuomo urges any other organizations or individuals who believe they were defrauded by Ehrenreich or Destination Management Group to contact his office at 716-853-8400.
The case is being handled by Assistant Attorneys General Letizia Tagliafierro and Michael McCabe under the supervision of Assistant Attorney General-In-Charge of the Buffalo Regional Office Russell T. Ippolito and Deputy Bureau Chief Richard Ernst of the Criminal Prosecutions Bureau. The investigation was handled by OAG Investigator Shawn McCormick.
The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in court.