A U.S. government investigation recently found that thousands of Americans, many of whom are reportedly elderly, have fallen for the widely operated timeshare/telemarketing scheme controlled by one of Mexico’s most violent cartels in the past 10 years.
The Jalisco New Generation Cartel, commonly known as CJNG, began its timeshare scam business in Puerto Vallarta and years later, it has a significant hold on the Cancún timeshare. CJNG has managed to expand its fraud network to at least two dozen call centers that contact U.S. owners of property in the previously mentioned cities, along with other popular areas for North American retirees, including Acapulco.
In branching into timeshares, the cartel has discovered a business with profits that could rival their most prominent venture, drug trafficking, U.S. officials believe.
The Jalisco cartel is known for its brutality, regularly making headlines across Mexico with beheadings, torture, and deadly gun battles against national military forces. Additionally, they are also known for their business acumen and ability to diversify their flows of revenue.
Based on their investigation, an anonymous U.S. government official estimated the fraud from Mexico-based timeshare companies at hundreds of millions of dollars a year.
“It’s more cash in hand than they make from drugs,” said the official. “The overhead is really low for this.”
Few of the telemarketing firms involved in the scams have been criminally charged, partly because the business shape-shifts, abandoning shell companies and bank accounts as authorities identify them, then proceeding to quickly create new ones.
The FBI has received an average of 1,400 complaints per year that have been related to timeshare fraud in Mexico over the past five years, and more people are reporting timeshare fraud each year.
“What we’re seeing here is an increase in the number of complaints,” said FBI Deputy Assistant Director James Barnacle. “That’s evidence that the fraud schemes are growing.”
The cartel is able to operate the scheme by hiring call center workers who speak English and teaching them to lure unsuspecting Americans with overseas property into believing they are steps away from freeing themselves of their expensive timeshares, and then the money flows through Mexican banks, which are largely affiliated with the cartel.
So far, the U.S. Treasury Department has sanctioned 40 Mexican companies associated with the Jalisco cartel and its telemarketing scam, yet few people have been arrested.
