Treasury sanctions 'brutally violent' cartel for timeshare fraud in tourist destination, warns Americans
The Treasury Department is now warning current U.S.-based owners of timeshares and those considering the purchase of a Mexico-based timeshare, to conduct "appropriate due diligence." Officials warn that the scams often target older Americans who can lose their life savings.
The Treasury Department's Office of Foreign Assets Control imposed sanctions on four Mexican individuals and 13 Mexican companies linked to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG). The individuals linked to the fraud are based in or near Puerto Vallarta.
"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 in a statement. "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."
The three senior CJNG members most involved in timeshare fraud sanctioned Wednesday are Julio Cesar Montero Pinzon (Montero), Carlos Andres Rivera Varela (Rivera), and Francisco Javier Gudino Haro (Gudino).
Additionally, Puerto Vallarta native Michael Ibarra Diaz Jr. (Ibarra) was sanctioned. Treasury says Ibarra is "engaged in timeshare fraud on behalf of CJNG."
The companies sanctioned 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."
Another company involved in timeshare-related transactions that was sanctioned is TTR Go, S.A. de C.V. They claim only to be a travel agency.
Three additional companies were sanctioned for their alleged real estate activities: Inmobiliaria Integral Del Puerto, S.A. de C.V., KVY Bucerias, S.A. de C.V., and Servicios Inmobiliarios Ibadi, S.A. de C.V.
"This diverse corporate network also includes tour operators (Fishing Are Us, S. De R.L. de C.V.; Santamaria Cruise, S. de R.L. de C.V.), an automotive service company (Laminado Profesional Automotriz Elte, S.A. de C.V.), and an accounting firm (Consultorias Profesionales Almida, S.A. de C.V.).
Cartel de Jalisco Nueva Generacion is a U.S.-designated Foreign Terrorist Organization. Officials said the cartel is increasingly supplementing its drug trafficking proceeds with alternative revenue streams like timeshare fraud and fuel theft.
"Treasury has taken a series of actions targeting the diverse revenue streams benefitting the cartels, including fuel theft, human smuggling, extortion, and fraud," the Treasury Department said. "As Treasury and its partners seek to disrupt the cartels' revenue streams, it is important to remind current owners of timeshares in Mexico: If an unsolicited purchase or rental offer seems too good to be true, it probably is."
Treasury added: "Those considering the purchase of a timeshare in Mexico should conduct appropriate due diligence."
Officials said Mexico-based cartels have been targeting U.S. owners of timeshares through call centers in Mexico staffed by telemarketers in fluent English.
Officials said that beginning in 2012, CJNG took control of timeshare fraud schemes in Puerto Vallarta, Jalisco, Mexico, and the surrounding area.
The scams often target older Americans "who can lose their live savings," officials warned, adding that the lifecycle of the scams can "last years, resulting in financial and emotional devastation of the victims while enriching cartels like CJNG."
Officials said the cartels typically obtain information about U.S. owners of timeshares in Mexico from "complicit insiders at timeshare resorts."
"After obtaining information on timeshare owners, the cartels, through their call centers, contact victims by phone or email and claim to be U.S.-based third-party timeshare brokers, attorneys, or sales representatives in the timeshare, travel, real estate, or financial services industries," the Treasury Department said.
Officials explained that the fraud may include timeshare exit scams, or resale scams, timeshare re-rent scams, and timeshare investment scams.
"The common theme is that victims are asked to pay advance 'fees' and 'taxes' before receiving money supposedly owed to them," officials warned. "This money never comes, and the victims are continuously told to send these 'fees' and 'taxes' via international wire transfers to accounts held at Mexican banks and brokerage houses."
After initial scams, officials warn that "re-victimization scams can occur."
In July 2024, Treasury Department's Financial Crimes Enforcement Network and the FBI issued a joint-notice on the timeshare fraud associated with Mexico-based cartels and criminal organizations.
In the six month period following that notice, FinCEN received more than 250 Suspicious Activity Reports, and filers reported approximately 1,300 transactions totaling $23.1 million, sent primarily from U.S. based individuals to counterparties in Mexico.
Based on FinCEN's analysis, U.S. fraud victims sent an average of $28,912 and a median amount of $10,000 per transaction to the suspected scammers since July 2024.
The FBI says approximately 6,000 U.S. victims reported losing nearly $300 million between 2019 and 2023 to timeshare fraud schemes in Mexico. But officials said that figure "likely underestimates total losses, as the FBI believes the vast majority of victims not report the scam due to embarrassment, among other reasons."
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