The Treasury sanctioned eight Mexican companies accused of being involved in a timeshare fraud scheme controlled by one of Mexico's most infamous drug cartels.
The Treasury’s Office of Foreign Assets Control accused the eight companies of assisting the Cartel Jalisco Nueva Generacion, which is estimated to be the second-largest drug cartel in Mexico and is thought to be responsible for a large portion of the fentanyl supply in the United States. The sanctions were enacted in coordination with the Mexican government, according to a press release.
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Of the eight companies, Servicios Administrativos Fordtwoo, S.A. de C.V., Integracion Badeva, S.A. de C.V., JM Providers Office, S.A. de C.V., Promotora Vallarta One, S.A. de C.V., Recservi, S.A. de C.V., Corporativo Title I, S.A. de C.V., Corporativo TS Business Inc, S.A. de C.V., and TS Business Corporativo, S.A. de C.V., most were based in Puerto Vallarta, Jalisco, Mexico, a CJNG stronghold. Servicios Administrativos Fordtwoo, S.A. de C.V. was also accused of making direct payments to cartel members.
“As CJNG has consolidated territory over the past decade, it has added other crimes to its core activity of drug trafficking,” OFAC Director Andrea M. Gacki said. “In tourist destinations such as Puerto Vallarta, CJNG has become heavily engaged in timeshare fraud, which often targets U.S. citizens. This crime, which can defraud victims of their life savings, results in another significant revenue stream for the cartel and strengthens its overall criminal enterprise. Today’s action exposes this CJNG scheme and also serves as a warning to potential victims, many of whom are elderly.”
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The most prominent type of timeshare scam is described as having three main steps; "(1) third-party scammers, who claim to have ready buyers, make unsolicited purchase offers to timeshare owners; (2) if offers are accepted, scammers make requests of timeshare owners for payments of advance fees and taxes, supposedly to facilitate or expedite the sale with assurances of reimbursement upon closing; and (3) once multiple payments have been made to the scammers, timeshare owners eventually realize that the offers were fictitious, that there are no buyers, and that their money is gone."
As a result of the sanctions, all assets of the companies within the U.S. are blocked and must be reported to OFAC. The Treasury launched its first round of sanctions against the CJNG in 2015, with the most recent being a round of sanctions against companies accused of assisting it in 2021.