The U.S. Department of the Treasury has sanctioned four Mexican companies and three Mexican individuals allegedly linked to timeshare fraud led by a notorious drug cartel, a scheme that has targeted Americans for years and has netted the criminal group millions of dollars, according to officials.
“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,” said Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson.
According to officials, transnational criminal organizations operate call centers in Mexico with scammers impersonating U.S. timeshare brokers, attorneys or sales representatives.
Owners of timeshare properties will be targeted through “complex and often yearslong” schemes, including timeshare exit and investment scams, the officials said.
A beach on the Caribbean Sea, in Cancun, Mexico.
Adobe Stock
In the latest move by the Treasury, “three Mexican accountants and four Mexican companies linked, directly or indirectly” to the Jalisco New Generation Cartel were sanctioned.
According to the Federal Bureau of Investigation, since at least 2012, the notorious cartel and other criminal groups have increasingly targeted U.S. owners of timeshare properties in Mexico.
Last month, the agency issued a warning after seeing a rise in scams targeting timeshare owners.
“Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health,” said Assistant Special Agent in Charge Paul Roberts in a press release.
“Cartels have operated the most reported timeshare frauds involving properties in Mexico,” Roberts added.
According to Michael Finn, the founder of Finn Law Group in Florida, the scam begins when a timeshare fraud owner receives an offer to purchase their property.
“They call you up and tell you that they have a buyer for your timeshare,” Finn told ABC News. “They will send you documents that look real and tell you that you need to pay taxes before you can get your payment.”
According to the FBI, fraudsters will press victims to pay upfront fees or make multiple tax payments. The scam will go on for months with victims losing tens or even hundreds of thousands of dollars before they realize they’ve been scammed.
In 2017, a man named Steven, who asked that his last name not be revealed, got an offer from what appeared to be a U.S. company offering to sell his timeshare for him for $97,000.
“We started the process and from there all of a sudden there was state taxes,” said Steven.
Steven said that he took steps in an attempt to ensure he wasn’t being scammed.
“I looked into the company and saw that it was an Illinois based corporation that had a real address in Chicago,” Steven told ABC News.
The individuals claiming to be part of the company requested “tax payments” multiple times and assured Steven he would be refunded.
After three years of back-and-forth with the individuals, Steven knew something was wrong.
“I had enough money sunk into it that I had to hope that it was real,” Steven told ABC News. “But at that point, shortly after that point, we decided it was not real and that we couldn’t — I couldn’t put any more money into it.”
Steven lost more than $300,000.
“Looking back, I don’t know how I let it happen,” Steven said. “It’s embarrassing.”
Steven told ABC News he never recovered the money.
“The faster a victim reports a fraudulent wire transfer, the more likely it is that something can be done about it,” Roberts said in the press release. “The first 12 hours, in particular, are critical.”
Finn, who helps victims of timeshare fraud, told ABC News he believes owners of timeshare properties should stay away from offers to purchase their property.
“It’s sad to see folks, older folks, being targeted by these scammers,” Finn said.
And with criminal organizations like the Mexican cartels involved in the scam, Finn said he believes it’s “very hard for law enforcement to do much.”
“It’s locking the barn door after the horse is gone,” Finn said.
The U.S. Treasury Department recently announced sanctions against several companies allegedly linked to timeshare fraud by a Mexican cartel. The move comes as part of a broader effort to crack down on criminal organizations that use legitimate businesses as fronts for illegal activities.
According to the Treasury Department, the companies in question were involved in a scheme that targeted unsuspecting timeshare owners, promising them lucrative returns on their investments in exchange for upfront fees. However, instead of delivering on these promises, the companies allegedly pocketed the money and left victims with worthless timeshares.
The sanctions are designed to disrupt the flow of illicit funds and prevent the companies from continuing to defraud consumers. In addition to freezing any assets held by the companies in the U.S., the sanctions also prohibit American citizens from doing business with them.
This is not the first time that timeshare fraud has been linked to criminal organizations. In recent years, there have been numerous cases of cartels using legitimate businesses, such as timeshare companies, to launder money and fund their illegal activities.
The Treasury Department’s actions send a clear message that it will not tolerate companies that engage in fraudulent practices or provide support to criminal organizations. By targeting the financial networks that enable these activities, the government is taking a proactive stance against timeshare fraud and other forms of financial crime.
Consumers who have been victimized by timeshare fraud are encouraged to report their experiences to the appropriate authorities. In many cases, victims may be eligible for restitution or other forms of assistance to help them recover their losses.
Overall, the sanctions against companies allegedly linked to timeshare fraud by a Mexican cartel represent a significant step towards combating financial crime and protecting consumers from fraudulent schemes. By holding these companies accountable for their actions, the Treasury Department is sending a strong message that criminal activity will not be tolerated in any form.
