Hyper-violent CJNG cartel ‘making more money from Mexican timeshare resale fraud than drugs’

A decade-long US government investigation says thousands of mainly elderly Americans have been defrauded by one of the world’s most violent cartels through Mexican timeshare resale fraud.

Drug lords adopt a new crime strategy

The stomach-churningly brutal drug trafficking organisation Jalisco New Generation Cartel (Cártel Jalisco Nueva Generación – CJNG) is reported to have moved into timeshare resale fraud around ten years ago, starting in upmarket Puerto Vallarta before expanding to Cancun. The network is believed to operate a minimum of 24 call centres focused on defrauding US timeshare owners across those two locations, plus several other timeshare hotspots.

“It’s more cash in hand than they make from drugs,” claimed a US official, speaking anonymously to USA Today. “The overhead is really low for this.”

A US government investigation estimated the Mexico-based fraud scheme to be bringing in hundreds of millions of dollars a year.

Because the operation is fast-moving, few of the telemarketing criminals have been charged. Shell companies and bank accounts are abandoned as soon as they are flagged by authorities, and replaced quickly with new ones.

How the CJNG timeshare scam works

As well as their shocking levels of violence, the CJNG are known for business discipline and for spotting new opportunities. Millions of Americans own timeshares, and up to 85% are unhappy with their ownership. Many contracts are deliberately written to make it difficult to exit once owners realise the product doesn’t make financial sense.

“What you therefore have is a huge market of desperate people, trapped paying annual fees for something they don’t want,” confirms Mark Jobling, communications officer for the Timeshare Advice Centre.

These cartel ‘resale’ operations buy or obtain data lists of timeshare owners and then cold-call, offering an attractive price to purchase the ownership. Many owners understandably seize the chance. Later, often very skilfully, a fluent English-speaking caller starts requesting money to cover ‘local taxes’, ‘federal taxes’, ‘insurance bonds’ and a growing list of other supposed costs. “They are extremely convincing,” says Jobling. “They keep finding new reasons to ask for money until the victims finally accept they’ve been scammed and stop paying.”

A real-world example

Stephen, a 54-year-old Midwestern financial manager, was approached in this way and offered $65,000 for a two-bedroom Cancun timeshare condo he had paid $47,000 for six years earlier. With his family growing up, they were using it less and less, so he accepted. The catch: he was told he would need to pay a ‘Mexican Federal tax’ of $3,900, supposedly held in escrow and refunded once the sale completed.

One charge led to another, as endless bogus attempts to progress the sale were presented. Stephen says he ultimately paid close to $1.8 million after being manipulated through this relentless fraud.

“It’s almost like an addiction,” says Stephen. “I kept thinking that the next person was going to help me get out of it.”

The FBI receives an average of 1,400 complaints annually about Mexican timeshare resale fraud, and the figure is increasing every year.

Need a genuine solution?

Modern communications and the internet make all of us easier to reach, including for fraudsters. With a bit of vigilance and common sense, however, protecting yourself from this type of scam doesn’t need to feel overwhelming.

Timeshare memberships that were mis-sold, or that no longer offer value to the owner, are a problem that needs addressing.

Following these simple rules can help you choose a capable and credible firm to handle your relinquishment.

And always keep the number one rule in mind when someone offers a deal beyond your wildest expectations: if it sounds too good to be true, it is.

For further advice on timeshare-related issues, get in touch with our team at the Timeshare Advice Centre.