Cartel’s new targets? Seniors and their timeshares

Older and retired people often victim of sales pitch scam

GUADALAJARA, MEXICO » First the cartel cut its teeth with drug trafficking. Then avocados, real estate and construction companies. Now, a Mexican criminal group known for its brutality is moving in on seniors and their timeshares.

The operation is relatively simple. Cartel employees posing as sales representatives call up timeshare owners, offering to buy their investments back for generous sums. They then demand upfront fees for anything from listing advertisements to paying government fines. The representatives persuade their victims to wire large amounts of money to Mexico — sometimes as much as hundreds of thousands of dollars — and then they disappear.

The scheme has netted the cartel, Jalisco New Generation, hundreds of millions of dollars over the past decade, according to U.S. officials who were not authorized to speak publicly, via dozens of call centers in Mexico that relentlessly target American and Canadian timeshare owners. They even bribe employees at Mexican resorts to leak guest information, the U.S. officials say.

The scam represents the latest evolution of the Jalisco New Generation, which is entrenched in both illegal and legal sectors of the economy. With little more than a phone and a convincing script, cartel employees are victimizing people across multiple countries. eight young Mexicans who worked at a call center owned by the cartel were discovered in dozens of plastic bags in a ravine on the outskirts of Guadalajara in Jalisco state.

The cartel typically preys on older, retired people who want to leave as much money as they can to their family by selling off assets. Several victims interviewed by The New York Times said the money they had lost to scammers exceeded the value of their initial investment in timeshares in Jamaica, California and Mexico.

“I’m old, just like these clients,” said Michael Finn, founder of Finn Law Group in St. Petersburg, Florida, which has represented thousands of people facing various forms of timeshare fraud. “We tend to be trusting when someone calls chatting us up and selling us these dreams.”

Finn realized how serious this type of fraud was becoming four years ago when he received a call from a desperate woman whose mother had wired $1.2 million, her entire life savings, to Mexico to sell her timeshare.

The timeshare industry is booming, with $10.5 billion in sales in 2022, a 30% jump from the year before, according to the American Resort Development Association. Nearly 10 million American households own timeshares, the association said, spending an average of about $22,000 for their investment on top of annual fees of about $2,000. Most timeshares are beach resorts.

The sector’s growth coincides with a 79% rise over the past four years of timeshare fraud complaints received by the FBI. But for scams that originate in Mexico, the FBI can investigate only if it gets the local authorities’ cooperation. And American law firms cannot file lawsuits in Mexico without retaining a licensed Mexican lawyer.

Over the past five years, American timeshare owners were bilked out of $288 million, according to the FBI, through various types of scams, including those run by the cartel. The real number is most likely about $350 million, as about 20% of those defrauded never register a complaint.

In October 2022, a retired couple — James, 76, and his wife, Nicki, 72 — said they received a call from a supposed real estate agent at Worry Free Vacations in Atlanta, offering to broker the sale of their timeshare in Lake Tahoe to a wealthy Mexican businessman. They asked not to publish their last name as they were “very embarrassed” about being defrauded.

As their daughters grew older, the family had stopped using the vacation spot that it bought in the 1990s for some $8,000, so the couple jumped at the opportunity to sell.

The scam started with smaller fees, James said — a few thousand dollars here and there meant to settle Mexican government registration costs for “crossborder transactions.” The fees grew heftier as he was told he was being fined by the Mexican authorities for various violations and could be extradited for breaking the law unless he paid. At one point, James said, the scammers even persuaded him to invest in a new commercial property in Mexico. to think I was fairly intelligent.”

The scammers identified themselves as sales representatives and an official at Mexico’s Central Bank, emails reviewed by the Times show, and kept promising that if he paid only “one more fee,” everything would be cleared and his money released.

Yet after every payment, a new fee was piled on.

In a statement, the Mexican Central Bank said it was aware that timeshare fraud was being committed in its name and warned people away from falling for the scam.

Late last year, James started to receive desperate messages from alleged representatives who claimed their colleague was jailed in Mexico after trying to settle James’ case, according to recorded calls and emails reviewed by the Times.

“Please, do everything that you can, to get my friend/boss back home. He misses his family so much and hearing him feels awful, you’re the only hope for this to be resolved,” a recent email read. “The pending amount to be paid is: $157,786.61.”

James said he was considering taking out a second mortgage to pay the amount, until his daughters stopped him.

While the scam targeting timeshare owners is financial, in Mexico it can be deadly.

The eight Mexicans found dead on the outskirts of Guadalajara last year all worked at a call center in the heart of Guadalajara run by the Jalisco New Generation cartel, American officials said. Local prosecutors said when they searched the center, they found a mop with red stains, blackboards with foreign names and details of timeshare memberships.

When New York Times reporters recently visited the call center, they found it was closed, with a police vehicle parked outside.