The U.S. Treasury Department has sanctioned a network connected to the brutal Jalisco Nueva Generacion (CJNG) cartel for orchestrating large-scale timeshare fraud targeting American citizens, especially older individuals in Puerto Vallarta, Mexico. The sanctions, imposed by the Treasury’s Office of Foreign Assets Control (OFAC), target 13 Mexican companies and four individuals, including senior cartel members responsible for leading the fraudulent schemes. These actions follow growing concerns about the cartel’s increasing use of alternative revenue streams to fund its drug trafficking operations and support its terrorist activities.
Officials emphasized that the fraudulent activities often target elderly Americans, who can lose significant life savings through deceptive practices such as timeshare exit scams, resale scams, and investment fraud. The Treasury Department’s warning comes amid a surge in reports of scams that have cost victims millions, with some cases resulting in devastating financial and emotional consequences. The fraudulent schemes, which often involve unsolicited offers that seem too good to be true, have led to the loss of life savings for many seniors, who are particularly vulnerable to such schemes due to their age and potential lack of financial expertise.
The Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned four individuals and 13 companies linked to the timeshare fraud led by the Cartel de Jalisco Nueva Generacion, a U.S.-designated foreign terrorist organization. The individuals sanctioned include Julio Cesar Montero Pinzon, Carlos Andres Rivera Varela, Francisco Javier Gudino Haro, and Michael Ibarra Diaz Jr., all based in or near Puerto Vallarta. The companies sanctioned include Akali Realtors, Centro Mediador De La Costa, S.A. de C.V., Corporativo Integral De La Costa, S.A. de C.V., and several other entities involved in real estate and travel services. These companies are accused of explicitly acknowledging their involvement in the timeshare industry, often through deceptive practices that involve fraudulent transactions and misrepresentation.
Secretary of the Treasury Scott Bessent emphasized the Treasury’s commitment to eradicating the cartels’ ability to generate revenue, including their efforts to prey on elderly Americans through timeshare fraud. “We are coming for terrorist drug cartels like Cartel de Jalisco Nueva Generacion that are flooding our country with fentanyl,” Bessent said. “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 Treasury Department’s action is part of a broader campaign targeting the diverse revenue streams benefitting the cartels, including fuel theft, human smuggling, extortion, and fraud. The Treasury’s warning comes amid rising concerns about the cartels’ ability to adapt and expand their fraudulent activities, which now include sophisticated schemes targeting U.S. citizens. Officials said that the cartels, now leveraging technology and telemarketing to expand their reach, have been targeting Americans through call centers in Mexico staffed by telemarketers fluent in English. These call centers have been used to contact victims by phone or email, posing as U.S.-based brokers or attorneys in the real estate and financial services industries.
According to officials, the fraudulent schemes often involve timeshare exit scams, resale scams, and investment scams, where victims are asked to pay advance fees and taxes before receiving money supposedly owed to them. These transactions are typically conducted through international wire transfers to accounts held at Mexican banks and brokerage houses, which are difficult to trace and recover. The Treasury Department has called on current and prospective timeshare owners in Mexico to conduct appropriate due diligence before engaging in any transactions, urging them to be wary of unsolicited offers that seem too good to be true.
Officials have also highlighted the scale of the problem, noting that the FBI estimates approximately 6,000 U.S. victims have reported losing nearly $300 million between 2019 and 2023 to timeshare fraud schemes in Mexico. However, officials believe the actual financial losses are likely underreported, as many victims are reluctant to come forward due to embarrassment or a lack of awareness about the nature of the scams. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has also reported a significant increase in suspicious activity related to these scams, with over 250 reports filed in the six months following a joint-notice issued by FinCEN and the FBI in July 2024. These reports include transactions totaling $23.1 million, with an average loss per victim of $28,912.
The Treasury Department’s actions are part of a broader effort to disrupt the cartels’ ability to generate revenue through illegal means, including their exploitation of vulnerable populations. The warning highlights the growing threat posed by organized crime groups, which are increasingly turning to fraudulent schemes to fund their operations. The Treasury’s sanctions and warnings are part of a larger strategy to combat these threats, emphasizing the need for vigilance and due diligence to protect vulnerable individuals from falling victim to such scams. As the government continues to take action against these fraudulent activities, the focus remains on preventing further financial losses and ensuring the safety and security of American citizens, particularly the elderly, who are at the highest risk of being targeted by these schemes.