US Issues Alert to Financial Institutions Regarding Mexican Cartel-Operated Timeshare Scam
According to a joint statement by the Treasury Department and the FBI, older adults, including retirees, are frequent victims of Mexican cartel-run timeshare schemes facilitated by financial entities.
U.S. federal agencies have announced a crackdown on Mexican cartel-operated timeshare schemes targeting older adults, with sanctions imposed on four Mexican companies and three Mexican accountants connected to cartel-led timeshare fraud activities, as reported by the Treasury Department’s Office of Foreign Assets Control (OFAC) in a post.
The Treasury Department, along with the FBI, issued a joint notice to financial institutions urging vigilance in detecting, identifying, and reporting timeshare fraud perpetrated by Mexico-based transnational criminal organizations (TCOs) who have been targeting U.S. owners of timeshare properties in Mexico, especially older adults and retirees.
Timeshares involve a lifelong investment to pay for a vacation resort, such as a beachside condominium, where one can visit at scheduled times. The funds acquired through timeshare payments are being used by TCOs to support their drug trade, including the manufacturing and trafficking of fentanyl and other synthetic drugs into the United States.
The FBI’s Internet Crime Complaint Center and the Federal Trade Commission reported that between 2019 and 2023, 6,000 people lost $300 million to timeshare fraud in Mexico, a figure that likely underestimates the total losses due to victims choosing not to report the scams.
‘A Complex Scam’
Elderly financial exploitation by criminal organizations poses a growing threat to the United States, targeting U.S. timeshare owners through complex telemarketing scams operated out of CJNG-owned call centers in Jalisco, Mexico. TCO scammers act as third-party timeshare holders before luring victims into various scams.
After the victim makes the first payment, the scammer either shuts down contact or continues to ask for more money, using tactics like providing fraudulent documents and spoofed online bank account dashboards to reassure victims.
Brian Nelson, the under secretary for Terrorism and Financial Intelligence, highlighted the operation run by sophisticated criminal teams in a post by the Treasury Department on X, warning against unsolicited calls and emails made by cartel-supported criminals.
The timeshare fraud scheme began over a decade ago when a Mexican attorney and businessman devised the plan and shared it with the CJNG, who eventually removed the attorney from the operation. In 2023, the OFAC took action against multiple people and companies involved.
Sanction Authorization
Under Executive Order 14059, which targets entities engaging with known drug traffickers, the OFAC issued sanctions against individuals involved in the operation, aimed at disrupting illicit activities, including drug trafficking and human smuggling.
“Treasury and our partners are deploying all tools available to disrupt this nefarious activity, which funds things like deadly drug trafficking and human smuggling, and we encourage the public to use our resources to stay vigilant against these threats,” Mr. Nelson said.
