Aug. 13 (UPI) — The U.S. Treasury Department on Wednesday sanctioned four Mexican nationals and 12 companies in Mexico linked to a “brutally violent” cartel involved in a timeshare fraud of resorts in Puerto Vallarta.
The Treasury’s Office of Foreign Assets Control said the Jalisco New Generation Cartel is a U.S.-designated Foreign Terrorist Organization “that is increasingly supplementing its drug trafficking proceeds with alternative revenue streams such as timeshare fraud and fuel theft.”
Sanctions include blocking all U.S. property owned by the people and the companies named, and the assets must be reported to OFAC. Violations may include civil and criminal penalties.
The agency is reminding current timeshare owners in Mexico: “If an unsolicited purchase or rental offer seems too good to be true, it probably is. Those considering the purchase of a timeshare in Mexico should conduct appropriate due diligence.”
The FBI has a timeshare fraud resource page.
Victims of timeshare fraud can file a complaint with the FBI’s Internet Complaint Center. Elderly customers can contact the Department of Justice’s National Elder Fraud Hotline.
Timeshares are fractional ownership for a vacation property, often one week a year, that are not considered an investment and often are tough to resell.
There are 56 timeshare developments in Puerto Vallarta on Mexico’s Pacific coast, a popular tourist destination that includes beaches, nightlife and cultural attractions. There are 578,000 residents.
“We are coming for terrorist drug cartels like Cartel de Jalisco Nueva Generacion that are flooding our country with fentanyl,” Secretary of the Treasury Scott Bessent said. “These cartels continue to create new ways to generate revenue to fuel their terrorist operations. At President Trump’s direction, we will continue our effort to completely eradicate the cartels’ ability to generate revenue, including their efforts to prey on elderly Americans through timeshare fraud.”
Approximately 6,000 U.S. victims reported losing nearly $300 million between 2019 and 2023 in timeshare fraud in Mexico, according to the FBI. In 2024, there were 900 complaints with reported losses of more than $50 million.
Beginning in 2012, the Treasury Department said the cartel took control of timeshare fraud schemes in Puerto Vallarta in Jalisco and the surrounding area.
“These complex scams often target older Americans who can lose their life savings,” the release said. “The lifecycle of these scams can last years, resulting in financial and emotional devastation of the victims while enriching cartels like CJNG.”
After information on timeshare owners is received, call center personnel claim to be U.S.-based third-party brokers, attorneys or sales representatives.
Fraud may include timeshare resale, re-rent and investment scams. People are asked to pay advance “fees” and “taxes” via international wire transfers to accounts at Mexican banks and brokerage houses before receiving money supposedly owed to them, the Treasury Department said.
The money never comes to the consumers and they are told to pay more “fees” and “taxes.”
Then they may be further victimized when impersonated law firms claim they can initiate proceedings to recover lost funds. Sometimes, government officials are impersonated, claiming the victims have been involved in suspicious transactions with more “fees” required to release the funds or risk prison time.
The Treasury Department said it had blocked all property and interests in property of the persons named, or in possession or control of U.S. people. This also applies to entities owned at least 50% by one of more blocked people.
In addition, Americans are not allowed to be involved in the property of people blocked.
And secondary penalties may be imposed on participating foreign financial institutions.
The Treasury Department listed three senior cartel members most involved in the fraud, who “orchestrate assassinations of rivals and politicians using high-powered weaponry.” They are Julio Cesar Montero Pinzon (Montero), Carlos Andres Rivera Varela (Rivera), and Francisco Javier Gudino Haro (Gudino).
Five companies “explicitly acknowledge their involvement in the timeshare industry” are Akali Realtors, Centro Mediador De La Costa, S.A. de C.V., Corporativo Integral De La Costa, S.A. de C.V., Corporativo Costa Norte, S.A. de C.V. and Sunmex Travel, S. de R.L. De C.V. They “explicitly acknowledge their involvement in the timeshare industry.” Other companies were involved involved in timeshare-related transactions or involvement in real estate activities.