The U.S. Department of the Treasury recently took decisive action against four Mexican companies and three Mexican individuals allegedly involved in an extensive timeshare fraud scheme led by the notorious Jalisco New Generation Cartel (CJNG). This move aims to disrupt a fraudulent network that has targeted American timeshare owners for years, siphoning millions of dollars through elaborate scams.
A Sophisticated Fraud Scheme
The sanctioned individuals and companies are accused of operating call centers in Mexico where scammers pose as legitimate U.S. timeshare brokers, attorneys, or sales representatives. These call centers are central to the timeshare fraud scheme, which involves contacting U.S. timeshare owners and presenting them with seemingly genuine offers to buy their properties.
Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson explained the intricacy of these operations: “Cartel fraudsters run sophisticated teams of professionals who seem perfectly normal on paper or on the phone — but in reality, they’re money launderers expertly trained in scamming U.S. citizens.” The fraudsters utilize fake documents and professional-looking communication to convince victims to pay various upfront fees, purportedly for taxes or administrative costs, to finalize the supposed sale of their timeshares.
The Federal Bureau of Investigation (FBI) has reported a rise in such timeshare fraud scams since at least 2012, with criminal groups increasingly targeting U.S. timeshare owners. The scam often begins with an unsolicited offer to purchase the victim’s timeshare at an attractive price. The victim is then required to pay upfront fees or taxes before the sale can be completed. These demands can continue for months or even years, with victims ultimately losing tens or hundreds of thousands of dollars.
Michael Finn, founder of the Finn Law Group in Florida, outlined the typical progression of these scams: “They call you up, claim to have a buyer for your timeshare, send you convincing-looking documents, and demand payment of taxes before releasing your supposed payment.”
Real-Life Impact: A Victim’s Story
Steven, a victim who asked for his last name to be withheld, shared his harrowing experience with ABC News. In 2017, he received an offer from what appeared to be a legitimate U.S. company to sell his timeshare for $97,000. The company, which had a real address in Chicago and convincing documents, requested several tax payments. Steven, believing in the legitimacy of the offer, continued to comply with their demands.
Over three years, Steven was asked to make multiple payments under various pretenses, totaling more than $300,000. Despite his efforts to verify the company’s legitimacy, the continued requests for payments and lack of real progress eventually made him realize he had been scammed. Reflecting on the situation, Steven admitted, “In hindsight, I’m not sure how I allowed it to happen.” “It’s embarrassing.” Unfortunately, he never recouped his money.
The Treasury’s Sanctions
In its latest move, the Treasury Department sanctioned three Mexican accountants and four companies directly or indirectly linked to the CJNG. These sanctions are intended to cut off the financial lifelines of these fraudulent networks.
Assistant Special Agent in Charge Paul Roberts emphasized the severe impact of these timeshare frauds: “Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health.”
Law Enforcement and Prevention
The FBI has stressed the importance of immediate action once timeshare fraud is suspected. Roberts emphasized, “Reporting a fraudulent wire transfer promptly increases the chances of effective action being taken,” stressing the critical importance of the initial 12 hours. Despite these efforts, the complexity and international nature of the fraud make recovery difficult.
Michael Finn advises timeshare owners to be extremely wary of unsolicited offers to purchase their properties. He points out that the involvement of powerful criminal organizations like the CJNG makes it very challenging for law enforcement to effectively intervene. Finn lamented, “It’s disheartening to witness older individuals being targeted by these scammers. It feels like trying to secure the barn after the horse has already escaped.”
