Victoria Cruises Investigated for Fraud

Formal investigations of would-be Residential Cruising company Victoria Cruises Line, aka VCL, have started, and the first enforcement action was taken on Friday (7 June 2024). In order to provide full and fair clarity, this article is necessarily long.

While some deposited passengers have contacted the U.S. Federal Bureau of Investigation with allegations of fraud against VCL, the first actual investigation was conducted by a Fraud Investigator with the Utah Department of Commerce’s Division of Consumer Protection, with a starting focus on the following State of Utah Statutes:

• Utah Consumer Sales Practices Act (Utah Code Ann. §13-11)
• The Telephone Fraud Prevention Act (Utah Code Ann. §13-26)
• The Pyramid Scheme Act (Utah Code Ann. §76-6a)

The latter is apparently in regard to VCL’s multi-level-marketing sales scheme. The company heavily promoted its “Revolutionary Residential Ship Referral Program” idea, which was advertised as “Jointly Run by Mr. Art Williams and VCL”.

Who is Art Williams? He has been variously described by the company as its “Stakeholder Resident Ambassador”, “most loyal Resident”, and “the creator of this compansation [sic] program in partnership with Victoria Cruises Line!”

Williams ran a Facebook group heavily promoting VCL. He eagerly adopted me as an Admin of that group, and then banned me from the group and blocked me, as well as many others, when we started questioning whether the company was legit.

Why Utah?

The FBI appeared reluctant to take on the investigation, but a couple of passengers contacted the State of Utah because the company’s “Brand Ambassador”, Valerie Linderoth, aka Lyn Alspaugh, lives there.

The unrefunded passenger who thought of that brilliant move posted about it in a private Facebook group and, when we saw that, many of us joined in filing a complaint. Kit and I were in a particularly important position as far as the State of Utah was concerned: we met with Valerie when we happened to be in Utah, discussed VCL with her on Utah soil, and (very importantly) made the decision to book with VCL based on her representations.

When I pointed that out to the investigator, he was very interested and asked if we would be willing to either come in for an interview or, failing that, if we would be willing to be interviewed by recorded phone call, under oath.

Since we were already moved out of our home and had things in motion to leave the country to join Villa Vie Residences, we agreed to the recorded phone call, but in the end that was not necessary since Linderoth was willing to cooperate.

Full Disclosure: I did tell the investigator that in addition to being the victim of an apparent fraud perpetrated by VCL, I am also a journalist and the co-founder of this web site, and had already written about VCL and their questionable operations. To ensure that I did nothing to impede his investigation, I agreed to remain quiet about it here until the public release of the formal report. I did receive a copy of the final report before it was released to the public.

Side Trip: Multi-Level Marketing

According to the transcript on an “unlisted” video on Youtube that was for a time embedded on VCL’s web site (and has since been removed), Williams clearly explained the money-making opportunity this way (automated transcript as provided by Youtube):

We have 438 paid deposited residents on the vcl Majestic right now we only need 98 more cabins, however if we get 1,098 more then we can sell two ships or three ships or whatever they can work out so this is how it works if you recruit a cabin full of people doesn’t matter what size it is how long it is you make $2500 on that cabin when it’s deposited when the ship leaves and that person is on it so it’s not something that’s going to pay you next week if — let’s call that person Bill if you recruit Bill you make $2,500 when Bill is on the ship when it sails. If Bill recruits George, Bill makes $2500 on George, but you make a $1,250 override on George. If George recruits Sally and her family to fill a cabin then George receives 2500, Bill receives 1250, and you receive 625 — that’s as far as it goes, there does not go four levels deep, but if you take a look at this math you will see that with 438 cabins right now it doesn’t take long to recruit 98 cabins. Folks this is a done deal if you will just go help us do it now in doing that this is what you say you don’t walk up to somebody you think is a prospect and say ‘hey would you like to go with us?’ No. You walk up and say there’s a ship that’s sailing around the world that’s a residence do you know anyone who might be interested? They say ‘oh my gosh yes! Uh uh Bill and Mary would be awesome and they would love it!’ Well you get the contact information from Bill and Mary and you go talk to a call or send a letter to Bill and Mary and you don’t say ‘Would you be interested?’ You say, who who do you know that might be interested in going around the world cuz you don’t want just them, you want them and somebody they know because if they decide not to go guess what you have, you’ve got their person so anytime you talk to somebody you tell them how wonderful it is how you’re doing what you’re thinking about doing what you’ve already done, and you say, ‘Who do you know that might be interested in hearing this story?’ Oh they absolutely ‘uh, Frank would be the absolute person I know he’ll want to go!’ Okay let’s talk to Frank. You don’t say ‘Frank do you want to go?’ you say Frank who do you know?’ that’s what you say. Ask people ‘Who do you know, who do you know?’ and they’ll say, ‘I want to go!’ All right let’s talk about getting you there first and then we’ll talk about helping you recruit someone. Folks this is how you do it let’s get this done!

Got It? Well Bill, George, and Sally do! …Maybe. VCL provided this handy chart to summarize the whole thing.

In the video details, VCL calls Williams their “main resident” and explained it with quite a bit less babbling:

WE GIVE 2500$ CASH FOR REFERRALS ON 3 LEVELS!

Dear Residents and Interested Parties!
It is with great pleasure that VCL announces a massive upgrade of our referral program!

At the initiative of our main resident, Art Williams, we have developed a highly incentivized referral program.

This will reward all those who invite their friends on this fantastic adventure on board the VCL residential ship with a real dollar reward.

In this video above, he talks about the program himself, and below we’ve included a detailed description for your reference!

A. Any Resident (A) who refers another cabin resident or residents (B) will be paid $2,500 upon sailing AND that cabin’s referral is onboard.

B. If that newly referred resident (B) in turn recruits an additional cabin’s residents (C) $2,500 will be paid to the referrer (B) AND $1,250 will be paid to YOU (A).

C. If the (C) referral recruits one or more cabins’ residents, resident (C) will be paid $2,500, Resident (B) will be paid $1,250, and Resident (A) will be paid $625.

Does it sound like a pyramid scheme? I’m not an expert on fraud, but Utah’s Fraud Investigator seemed to think it needed some of his time.

 

More On Art Williams

Art told me last year that his full name is Artis Otto Williams III, and is “in BrokerCheck since 1983!”

BrokerCheck is a service of the Financial Industry Regulatory Authority (aka FINRA), “an independent, non-governmental regulator for all securities firms doing business with the public in the United States. We are authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly.”

I recently searched there, with these results:

Narrowing my search as suggested to simply “Art Williams”, I get everything from William A Grinnel of Jupiter to Frank William Armitage of Tampa to Allyson A Williams of Jacksonville, but no plain old Art Williams, or even Arthur Williams, in Florida.

Perhaps he’s retired? But here he was, representing himself as a registered (presumably stock) broker with decades of experience. And, he told me, he had been highly trained in fraud detection and investigation.

Frankly, his assurances left us more dubious than confident.

Bottom line: that’s the “why” of Utah investigating a possible pyramid scheme, but Utah seems to have dropped that line of questioning, apparently because they have no jurisdiction over a resident of Florida, let alone a company in Hungary (or, as you will see, Italy), so that angle has apparently still not been fully explored. More on that in a bit.

Utah’s Conclusion

Today (10 June 2024), Utah released the results of their investigation. They fully concentrate on “Valerie Sariahlyn Linderoth” (her apparent legal name, mostly referred to as “Respondent”) in the resulting “Assurance of Voluntary Compliance (‘AVC’)” which, I gather, is similar to a Consent Decree used in federal regulatory actions. As a resident of that state, Utah does have jurisdiction over her commercial activities. The document notes she is 59 years old.

Some highlights follow, with “Division” referring to the Utah Division of Consumer Protection. You can download the entire document below. (A KFT is Korlátolt Felelősségű Társaság, Hungarian for Limited Liability Company; LLCs are quite common in the U.S. also.)

• The Division found Respondent was directly engaging in marketing, customer service, and sales solicitations on behalf of a foreign company, Victoria Cruises Line KFT (VCL).
• The Division found that VCL was purporting to offer a residential cruise at a later date, and required an upfront deposit from customers in the amount of $10,000. VCL required the deposit to be wired from the customer’s bank directly to a bank in Hungary.
• The Division found that, while the cost of cabins advertised by VCL varied, the required deposit on the cabins did not vary, and the deposit was generally more than the actual cost of renting the cabin.
• The Division found that prior to changing its name to “Victoria Cruises Line KFT”, the Hungarian legal entity was officially registered as “Akoya Gold Commercial and Service KFT” and engaged in a completely different industry than VCL.
• The Division found that the underlying owner of VCL is Viktoria Judit Takacs-Ollram, a Hungarian national. The Division found that a LinkedIn profile for a purported Chief Executive Officer of VCL, Olavs Zvinelis, utilized generic stock images and was being accessed via an IP address in Italy. The Division has good reason to believe that this profile is not actually operated by an individual named Olavs Zvinelis.

• 

  The Division found that VCL posted video clips of individuals purporting to be hired staff for the planned voyage. The Division reached out to some of these individuals and determined that they had no employment or compensation agreements with VCL, and did not plan on being on the advertised cruise.

• The Division found that VCL had not filed any regulatory documents or surety bonds with the Federal Maritime Commission (FMC) as of April 12, 2024. The FMC confirmed in writing to the Division that these filings are generally required to operate a cruise.
• The Division found that VCL had not reserved a departure date in July, 2024 from the Florida Port Authority as advertised to consumers.
• The Division found that multiple consumers submitted deposits to VCL based on representations made by Respondent on behalf of VCL. Further, the Division found that Respondent was actively encouraging prospects to submit their deposits and simultaneously attempting to mitigate the concerns of consumers who were considering requesting a refund.
• The Division found that Responded provided ideas and strategy suggestions to VCL with the intent of aiding VCL in acquiring additional consumer deposits.
• The Division found that Respondent truthfully believed that the residential cruise was going to depart as represented by VCL.
• The Division also found that Respondent did not receive any monetary compensation from VCL. Rather, Respondent relied on VCL promise of a room on the cruise ship on a future sailing as payment.

That’s one hell of a list of Findings by a fraud investigator in a tiny state agency!

It is clear to me that VCL has no experience whatever in operating a cruise line, despite claims to the contrary.

Useful Idiots

In political terms, a Useful Idiot “is a person who thinks they are fighting for a cause without fully comprehending the consequences of their actions, and who is cynically manipulated by the cause’s leaders or by other political players.” (Wikipedia)

The term is also used for those who unwittingly shill for fraudsters because they believe in the cause or offering in that fraud — e.g., “The Division found that Respondent truthfully believed that the residential cruise was going to depart as represented by VCL.”

Clearly, the term applies well to Linderoth. Seems to me that the term also well applies to Art Williams. He personally assured me “They have a ship.” They do not, and never have. “Been in business 20 years. Public record.” They have not — go ahead, show me the record!

The first such record I found shows they were formed in 2021 — and even then, not for the operation of a cruise line, but rather “Non-specialized wholesale of food, beverages and tobacco”. Yeah, really.

Marcell Herrod, as named in this filing as the “sole director” of the company, is apparently the son of VCL’s owner, Viktoria Judit Takacs-Ollram. In an email to us after my last article here about the company, he claims to be VCL’s Vice President.

Of course, that’s for VCL’s operations in Italy, where Viktoria and Marcell live. What about Hungary? I finally found that business filing too, just this weekend, and it’s very helpfully available in English.

The filing, which I won’t even try to sceencap since it contains several pages due to its multiple business sectors, shows that “Victoria Cruises Line LLC” was first registered on 14 July 2017 (my math says that’s not 20 years ago), for the “Retail sale of flowers, plants, seeds, fertilisers, pet animals and pet food in specialised stores”. But wait! That’s not all! Also:

• Retail sale of medical and orthopaedic goods in specialised stores.
• Dispensing chemist in specialised stores.
• Retail sale of second-hand goods in stores.
• Retail sale of cosmetic and toilet articles in specialised stores.
• Retail sale of footwear and leather goods in specialised stores.
• Retail sale of watches and jewellery in specialised stores.
• Retail sale of clothing in specialised stores.
• Accounting, bookkeeping and auditing activities; tax consultancy.
• Other human health activities.

And, finally!

• Sea and coastal passenger water transport, Service activities incidental to water transportation, and Renting and leasing of water transport equipment.

…but that last group of activities wasn’t added until 11 July 2020, which is also not 20 years ago.

The listed “senior officers” of the company are:

• Olavs Zvinelis, Date of birth: 7 August 1956, Managing Director, as of 26 November 2020.
• …and that’s all.

As you may recall from my previous article on VCL, Zvinelis’s LinkedIn page is illustrated with a stock photo, which fact was picked up by the Utah fraud investigator. Does Olavs actually exist? Unclear. The more we dig, the more damning the evidence that VCL is not a serious Residential Cruising company. More points toward concluding it is rather a scam.

The document ends with:

A more recent update shows new additional business sectors:

• Car rental.
• Leasing of other machines and tangible assets.

…both starting in September 2023. Interestingly, Marcell seems to have started a Maserati rental business in Italy. Gosh, I wonder where he got all the money to buy sports cars to rent out?

So back to Art Williams, who laughed off suggestions that VCL was a fraud because he is a “fraud expert” who knows VCL is “the real deal.” He left it unclear what his formal training is regarding fraud. I would presume that as a broker he had some continuing education on the subject, but does that make him an “expert” as he claimed?

Not in my opinion.

According to a reliable source I will not name, Williams was a witness for a federal case in which he himself was defrauded in a Ponzi scheme. Kit and I have now been defrauded too, but that doesn’t make us fraud experts.

Williams says he was also defrauded by VCL. If so, it’s sad that he is apparently a fraud victim twice over. It still doesn’t make him an expert in my eyes.

To be clear, Utah looked into what the investigator termed a possible “pyramid scheme,” not Williams himself. The FBI should pick up that job.

Utah’s Actions

The Division alleged that it found these violations:

• 19 [counts] of Utah Rule R152-11-10(C) for failing to provide refunds to consumers who requested them within 30 days of the request; and
• One violation of Utah Code Ann. §13-11-4(2)(k) for marketing a referral program wherein compensation was contingent not on the receipt of the referral’s deposit, but on their embarkment on the cruise at a later date.

I take that second as meaning no evidence of a “pyramid scheme” as defined by state law, but rather violation of a different law.

The state, with its Assurance of Voluntary Compliance, has several stipulations, which Linderoth has agreed to, including:

• Respondent admits to the allegations contained herein.
• Contingent upon Respondent’s compliance with this AVC, the Division agrees to close its investigation of the Respondent.
• Respondent agrees to cease and desist from further facilitating the operations of Victoria Cruises Line KFT.
• Respondent agrees to cease and desist from providing any service in exchange for compensation in the travel industry unless the compensation is received as a W-2 employee of a legally organized business entity.
• This AVC is between the Division and the Respondent and does not affect the civil claims of other parties. In addition, this AVC does not affect any enforcement action that might be brought by any local, state, or federal enforcement authority, including any enforcement action that might be brought by a criminal prosecutor.

(Emphasis added in the last point.)

This is what gives us hope: now that a state agency has conducted a fairly thorough review of VCL’s activity and found multiple violations of regulations and law, perhaps a “federal enforcement authority” will now pick up the case.

The FBI is already looking into the conduct of Life At Sea in relation to their spectacular failure and lack of customer refunds, so perhaps that same investigator or team will widen their view for a closer look at VCL.

The dozens and dozens of victims of VCL’s conduct, mostly but not exclusively Americans, deserve nothing less.

P.S.

Kit and I are scheduled to move onto the Villa Vie Odyssey at the end of this month. More on that soon!

Last Updated June 17, 2024
Originally Published June 10, 2024