Mexican drug cartel also works timeshare scam
Typical prey are older, retired people ready to sell underused assets
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 via dozens of call centers in Mexico that relentlessly target American and Canadian timeshare owners, according to U.S. officials who were not authorized to speak publicly. 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.
Even those employees are vulnerable to the cartel’s ruthlessness. In May, the remains of eight young Mexicans who worked at a call center owned by the cartel were discovered in plastic bags in a ravine on the outskirts of Guadalajara, a city 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, Fla., which has represented thousands of people facing various forms of timeshare fraud. “We tend to be trusting.”
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 around $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.
“The victims don’t want to come forward because they are embarrassed and hide it from their families,” Finn said.
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, Calif., to a wealthy Mexican businessman. They asked that their last name not be published because they were “very embarrassed” about being defrauded.
The scam started with smaller fees, James said — a few thousand dollars here and there meant to settle Mexican government registration costs for “cross-border 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. About two dozen payments later, the couple have wired nearly $900,000 to various bank accounts in Mexico, according to bank records reviewed by the