The Treasury Department delivered a new warning to Americans who own or are looking to buy timeshares in Mexico, saying Thursday that a major smuggling cartel has infiltrated the market and is siphoning the money to its own nefarious ends.
Officials announced sanctions on one timeshare resort, Kovay Gardens, and slapped sanctions on five Mexican citizens and 17 companies associated with the operation.
The department said they have ties to the Jalisco New Generation Cartel, which has been designated a terrorist group by the U.S.
CJNG is particularly active in the Puerto Vallarta area, where its operatives gather names of American timeshare owners and then feed them to cartel-controlled call centers that run all manner of scams. They’ll offer to sell or rent out the property, demand upfront fees and taxes, then never deliver the promised profits.
Victims are then contacted by fake law firms or supposed government officials, again associated with the cartel scam, who offer assistance in getting their money back — again charging new fees and never delivering.
“Current owners of timeshares in Mexico should be aware: If an unsolicited purchase or rental offer seems too good to be true, it probably is. Those considering the purchase of a timeshare in Mexico should conduct appropriate due diligence,” the department said.
Treasury officials said timeshare fraud costs Americans hundreds of millions of dollars, with that money helping CJNG diversify its income beyond just drug smuggling.
“Whether through trafficking fentanyl into our borders or orchestrating timeshare fraud schemes, terrorist drug cartels like CJNG consistently victimize Americans for profit,” Treasury Secretary Scott Bessent said. “Under President Trump’s leadership, we will continue our efforts to completely eradicate the cartels’ ability to generate revenue and terrorize Americans.”
Cartel-based timeshare fraud has emerged as a focus of the Trump administration, part of a broader quest to defang the cartels that have plagued Mexico for decades.
The FBI reported 6,000 victims of timeshare fraud from 2019 to 2023, and received 900 complaints in 2024, totaling $50 million in losses. Officials said that’s an undercount of the actual problem, given the reticence of victims to report the fraud.
Treasury officials said Kovay Gardens, the specific timeshare resort in La Cruz de Huanacaxtle, is controlled by CJNG.
It uses deceptive tactics to lure customers, falsely promises to rent out unused time, overcharges credit cards and then shares its customer list with CJNG, which then runs the other scams.
Treasury sanctioned Administradora y Comercializadora del Mar, which handles reservations and other services for the resort, and also sanctioned resort founder Carlos Humberto Rivera Miramontes and 13 companies he controls in tourism, real estate and financial services.
The sanctions freeze property and assets held in the U.S. or controlled by American entities.
Mexican cartels have lost a significant portion of revenue with the closure of the U.S. border, denying the operations the fees they charged migrants.
Mr. Trump is also seeking to put pressure on their drug-smuggling businesses.
Cartels had already been searching for other operations, with the timeshare fraud and fuel theft named as emerging money-makers.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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