There has been a long-documented history of Mexican drug cartels preying on unsuspecting tourists, resulting in violence, kidnappings and sometimes deaths. But in recent years, one cartel has turned its attention toward an unconventional method of scamming tourists by targeting people that own Mexican timeshares.
Both the U.S. Treasury Department and the FBI have sent out bulletins warning of a widespread timeshare scam being perpetrated by the Jalisco New Generation Cartel (CJNG). The cartel, based in the namesake Mexican state of Jalisco, “generates substantial revenue for its multi-faceted criminal enterprise through its timeshare fraud network,” Treasury Secretary Janet Yellen said in a press release. News of CJNG’s operation first began making the rounds in 2023 but has been going on for much longer — over the past five years, the cartel has scammed timeshare owners out of $288 million, according to the FBI.
CJNG uses “extreme violence and intimidation to control the timeshare network, which often targets elder U.S. citizens and can defraud victims of their life savings,” Yellen said. How is the cartel perpetrating this scam, and how can people defend themselves from fraudsters?
What does the cartel’s timeshare scam entail?
CJNG “started its timeshare fraud business in Puerto Vallarta and has now largely taken over the Cancun timeshare market as well,” USA Today said. In recent years, the cartel has “expanded the fraud network to at least two dozen call centers that contact U.S. owners of property in those two cities, as well as other areas popular with North American retirees, including Acapulco.”
The scam, while widespread, is “relatively simple,” The New York Times said. CJNG members “posing as sales representatives call up timeshare owners, offering to buy their investments back for generous sums,” said the Times. They then “demand upfront fees for anything from listing advertisements to paying government fines.” This often leads to victims wiring “large amounts of money to Mexico, sometimes as much as hundreds of thousands of dollars.” By the time the victims realize what has happened, the scammers have vanished.
Over the years, CJNG has “turned defrauding American citizens with timeshares into a science,” USA Today said, refining its schemes over time. The cartel “hires call center workers who speak perfect English and teaches them to lure unsuspecting Americans into believing they are steps away from freeing themselves from their timeshares.” The workers are even taught to “craft documents with names of companies, brokers and attorneys that appear legitimate,” said USA Today, sometimes even stealing the identities of actual lawyers and U.S. officials.
The U.S. government was tipped off to the scam when “sellers were contacted via email by scammers who said they had a buyer lined up, but the seller needed to pay taxes or other fees before the deal could go through,” according to CBS News. And while anger might be placed toward the cartel’s workers, it seems many of them are there by force. In June 2023, “as many as eight young workers were confirmed dead after they apparently tried to quit jobs at a call center operated by the Jalisco cartel,” said CBS.
How is the U.S. government trying to stop this scam?
Federal agencies have been fighting back against CJNG — or at least trying to. The United States has sanctioned at least eight companies tied to the cartel. All of these companies are based in Puerta Vallarta or Guadalajara, and “all claim to either be financial services or real estate firms,” CNN said. However, investigators believe they are all connected to CJNG’s timeshare scam, with the Treasury Department saying they have “at times” pretended to represent the U.S. government.
The United States has also tried to get ahead of the game by warning timeshare owners about the scam. The Treasury Department’s Office of Foreign Assets Control (OFAC) — which the scammers often try to impersonate to demand timeshare funds — released a document noting that they do “not collect, demand or request this type of payment from members of the public.”
Americans — or anyone who owns a timeshare in Mexico — should “not share any personal or confidential information, such as account information, with, nor make any payments to, any person purporting to represent OFAC,” the document said. It also encouraged potential victims to report any scams to the Treasury Department.