LAS VEGAS, NV – Michael Kroger, 60, is headed to prison after admitting his central role in a decade-long telemarketing scheme that bilked over 1,000 timeshare owners out of nearly $800,000. Kroger pleaded guilty on the eve of trial to conspiracy to commit mail fraud and wire fraud, finally facing justice for a scam that preyed on vulnerable property owners.
U.S. District Judge Jennifer A. Dorsey didn’t mince words at sentencing, specifically noting Kroger’s complete lack of remorse for the financial and emotional toll his crimes took on his victims. Kroger was ordered to pay restitution totaling approximately $212,396, a small fraction of the $782,090 stolen from individuals in Nevada, across the United States, and even in Canada.
Court documents detail a meticulously crafted fraud that ran from around 2000 until March 2010. Kroger joined the conspiracy in 2004, teaming up with co-conspirator Michele Paonessa to create a revolving door of fictitious companies and bogus contracts. The pair lured timeshare owners seeking to sell their properties with the promise of a smooth transaction, but instead demanded upfront fees for processing fake documents and closing costs. The money, of course, never made it to a legitimate sale.
Investigators uncovered a staggering 29 shell companies used to perpetrate the fraud. Not a single timeshare ownership was ever successfully sold during the entire 10-year operation. Kroger and Paonessa repeatedly abandoned failing businesses, only to resurface with new iterations of the scam, continuing to fleece unsuspecting victims. The scheme was remarkably persistent, and the pair skillfully avoided scrutiny until the net finally closed.
Michele Paonessa has also pleaded guilty and is scheduled to be sentenced on August 20, 2019. She faces a maximum penalty of 20 years imprisonment and a $250,000 fine. The investigation was a joint effort by the U.S. Secret Service, the Henderson Police Department, and the Southwestern Identity Theft and Fraud Taskforce (SWIFT), highlighting the collaborative effort needed to dismantle complex fraud schemes.
Assistant U.S. Attorneys Kimberly Frayn and Jared Grimmer prosecuted the case, bringing Kroger and now Paonessa to account for their predatory actions. This case serves as a stark reminder to timeshare owners – and anyone considering a financial transaction with an unfamiliar entity – to exercise extreme caution and thoroughly vet any company before handing over their money. The District of Nevada continues to aggressively pursue those who exploit others for personal gain.”
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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