Between 1984 and 1987, PTL sold Heritage USA "lifetime partnerships," a one time payment of about 1,000 dollars that entitled the buyer to a three night annual stay at a planned luxury hotel on the grounds. The United States Postal Inspection Service's own history of the case describes the mechanism plainly: PTL sold tens of thousands of partnerships, raising more than 400,000,000 dollars, while only one 500 room hotel was ever built, far too few rooms to honor the stays already promised, let alone the ones still being sold.
The gap between promised capacity and built capacity became the core of the federal fraud case against Jim Bakker, who resigned from PTL on March 19, 1987, amid the unrelated disclosure of a payment to church secretary Jessica Hahn. Investigators found that partnership revenue had been used for operating costs and personal expenses rather than solely for the additional construction the sales were represented as funding. Bakker was convicted in 1989 on all 24 federal counts of mail fraud, wire fraud and conspiracy connected to the scheme; the convictions were upheld on appeal in 1991, though his sentence was reduced.
PTL entered bankruptcy proceedings following the scandal, and control of Heritage Village Church passed to fellow broadcaster Jerry Falwell. Heritage USA closed in 1989 and was later sold and largely demolished; the PTL Club ceased broadcasting under that name.