U.S. Agencies Warn Timeshare Owners of Rising Mexican Cartel Activity

A coalition of prominent U.S. official agencies has issued a warning to U.S. timeshare owners, urging them to stay vigilant against Mexican cartel activity. In a joint statement, the U.S. Treasury’s Office of Foreign Assets Control (OFAC), FinCEN, the Treasury’s AML unit, and the FBI highlighted that Mexican international cartels “have increasingly targeted U.S. owners of timeshare properties in Mexico.”

The announcement coincided with the U.S. imposing sanctions on several accountants involved in these schemes. The agencies stated, “Older adults, including retirees, are frequent victims in these schemes.” They further explained that cartels use the proceeds from timeshare fraud “to diversify their revenue streams and finance other criminal activities, including the manufacturing and trafficking of illicit fentanyl and other deadly synthetic drugs into the United States.”

Timeshares involve multiple owners holding the right to use a property, typically in exotic holiday locations, with each owner allotted specific periods of time at the site.

The alert follows widespread reports of timeshare fraud linked to the Jalisco New Generation Cartel (CJNG). The cartel is said to operate at least two dozen call centers that target U.S. timeshare owners with various scams. Fraud from these Mexico-based operations is estimated to generate hundreds of millions of dollars annually. The Treasury Department has sanctioned 40 Mexican companies associated with the Jalisco cartel and its fraudulent activities.

According to the joint statement, approximately 6,000 U.S. victims reported losing nearly $300 million to timeshare fraud schemes in Mexico between 2019 and 2023. However, the FBI believes this figure likely underestimates the total losses, as “an estimated 80 percent of victims choose not to report the scam due to embarrassment, lack of resources, or other reasons,” the notice stated.

The joint statement was released alongside a declaration from OFAC, which announced sanctions against three Mexican accountants and four Mexican companies “linked, directly or indirectly, to timeshare fraud led by CJNG.”

Further information on the methodologies, financial typologies, and red flag indicators associated with timeshare fraud in Mexico is available in the notice. U.S. officials have urged financial institutions to review this information to aid in identifying and reporting suspicious activities to FinCEN and law enforcement.

FinCEN has advised financial institutions with questions about the notice on Mexican timeshares to contact its Regulatory Support Section at frc@fincen.gov.

By fLEXI tEAM