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Scandal grows for travel companies

Published Sep. 16, 2005

In a growing Olympic embarrassment, the same companies that stranded thousands of students in Atlanta last week now are under criminal investigation for possibly defrauding 1,000 travelers and investors from around the world.

Tourists from as far as Japan and Australia have arrived this week, only to be told they have no place to stay, officials said. A German family spent more than $50,000 on a bogus travel package, said Mike Hobbs, a deputy attorney general in Georgia.

"There are some folks who have spent an awful lot of money to come to Atlanta," Hobbs said.

A special task force has been set up to handle the broadening inquiry into Creative Travel Services and affiliates.

"The more we look at it, the more angles we become aware of," said John Bankhead of the Georgia Bureau of Investigation. "The situation with the students was what got this snowball rolling downhill, and it's continuing to grow."

Some 2,000 to 3,000 high school students from as far as Hawaii were brought to Atlanta after being promised free lodging, $5-an-hour concession jobs and free tickets to two Olympic events.

When the students _ including close to 200 from the Tampa Bay area _ arrived last week by bus they discovered they had no lodging. A deal to house them at schools had fallen through, and Creative Travel couldn't come up with a back-up plan.

The teenagers and their chaperones were sent home, with the company promising to pay students $200 apiece and chaperones $1,000 each for their troubles.

On Saturday, state officials received a tip that the jobs program was part of a larger problem, said Carolyn Mills of the state Office of Consumer Affairs.

Tourists and travel groups from around the world had contacted Creative Travel after seeing ads in newspaper and on the Internet, Mills said.

Unlike the students, the adult travelers had paid for accommodations. Their money was somewhere, Mills said, but it wasn't being used to pay for hotel rooms.

Other companies under inquiry were identified as: Summer Games Employment Services, or SGES Corp.; Event Management and Marketing Associates; and Atlanta Recruiting Inc. The man identified as president of Creative Travel and Event Management is Merle Zmak Jr.

Officials estimated the amount of payments being investigated as "several million."

Neither Zmak nor any other principals have tried to leave Atlanta, Mills said. The task force has stayed in regular contact with them, she said.

No one has been arrested.

Zmak did not return calls from the Times Thursday. A public relations firm handling calls for Creative Travel was unable to shed light on what went wrong.

"I have no clue. I really have been out of the loop for the last 2{ days," said Sharon Goldmacher of Communications 21. "I've been told things are going in a positive direction and they're trying to work through everything."

But, she acknowledged, "I can barely even get through to the attorney" for an update.

A third group of potential victims also has emerged, Mills said. Those are people who invested in kiosks that were to be set up and staffed by Creative Travel's affiliate companies. Few, if any, of the kiosks have been opened.

"Some of the backers are quite wealthy _ millionaire types. They saw it as a really, really, good venture," Mills said. "They are furious, absolutely furious."

Employees at the Consumer Affairs Office have been working around the clock to phone foreign travelers, Mills said.

"We're trying to get a hold of people before they get on their planes," she said.

Meanwhile, students in Florida and elsewhere have yet to see the $200 reimbursements. A handful of parents and students huddled in St. Petersburg on Thursday to explore legal action against the companies.

"At this point, from everything I've heard, nobody feels confident we're going to get anything," said Paul Chorney, a Northeast High School science teacher who served as a chaperone and shelled out $216 of his own money for a hotel room for students.

"Hopefully," he said, "the kids won't lose faith in future endeavors with adults who make promises."

_ Times researcher Kitty Bennett contributed to this report.