The U.S. Department of the Treasury (USDT) has announced new sanctions against Mexican individuals and companies involved in cartel-backed timeshare fraud schemes in Puerto Vallarta, Jalisco. The scheme has defrauded thousands of U.S. citizens, resulting in hundreds of millions of dollars in losses. The sanctions, issued by the Office of Foreign Assets Control (OFAC), target three Mexican accountants and four companies linked to the Jalisco New Generation Cartel (CJNG), which is behind the scheme.
The accountants, based in Puerto Vallarta, assist in the CJNG’s timeshare fraud activities, and have familial ties to previously designated persons. The four companies sanctioned are connected to these accountants and are implicated in the fraudulent activities targeting U.S. timeshare owners.
CJNG and other criminal organizations operate call centers in Mexico where scammers impersonate U.S.-based timeshare brokers, attorneys, or sales representatives. These scammers use complex and prolonged telemarketing, impersonation, and advance fee schemes to defraud U.S. timeshare owners. Victims are often re-targeted in “re-victimization schemes,” where scammers impersonate law firms and authorities to extort more money.
Victims typically send payments via wire transfers to Mexican shell companies, which then launder the funds through additional shell companies and trusts controlled by cartel members or their associates. Between 2019 and 2023, around 6,000 U.S. victims reported losses nearing $300 million. The actual losses are likely higher due to underreporting.
Brian E. Nelson, USDT’s Under Secretary for Terrorism and Financial Intelligence, highlighted the sophistication of the fraudsters, who appear legitimate but are trained in scamming U.S. citizens. He warned against unsolicited calls and emails that seem too good to be true.
The origins of the CJNG’s involvement in timeshare fraud trace back to Mexican attorney and businessman Omar Aguirre Barragán, who learned the fraudulent tactics from Puerto Vallarta-based fraudsters over a decade ago. In 2012, Aguirre collaborated with CJNG, which eventually took direct control of the scheme.
The sanctioned individuals include accountants Griselda Margarita Arredondo Pinzón, Xeyda Del Refugio Foubert Cadena, and Emiliano Sánchez Martínez, all sanctioned under Executive Order 14059 for their involvement in the global illicit drug trade. Arredondo is the half-sister of CJNG member Julio Cesar “El Tarjetas” Montero Pinzón, a key figure in the cartel’s enforcement group. Foubert is linked to Manuel Alejandro Foubert Cadena, a Mexican attorney connected to CJNG’s timeshare activities, and is married to Emiliano Sánchez.
The four companies sanctioned are Constructora Sandgris, Pacific Axis Real Estate, Realty & Maintenance BJ, and Bona Fide Consultores. These sanctions cut them off from the U.S. financial system and freeze any U.S.-based assets.
To combat timeshare fraud, U.S. authorities, including the Financial Crimes Enforcement Network (FinCEN), OFAC, and the FBI, issued a notice to financial institutions outlining the fraud schemes and providing red flag indicators to help identify and report suspicious activity. Nelson emphasized the importance of disrupting these fraudulent activities, which fund drug trafficking and human smuggling, and encouraged public vigilance.
The FBI recently warned of a rise in scams targeting timeshare owners, noting that older Americans are primarily targeted, making it a form of elder fraud. Paul Roberts of FBI New York’s Complex Financial Crimes Branch pointed out that timeshare fraud is attractive to cartels due to its low overhead costs compared to other illicit activities like drug and weapons trafficking.