The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a timeshare fraud network led by the Cártel Jalisco Nueva Generación (CJNG), which the cartel used to make automated calls to lure potential buyers to sales presentations and later defraud them.
The office said in a statement that the Mexican timeshare resort Kovay Gardens, along with five Mexican nationals and 17 Mexican companies associated with the network, were targeted by the sanctions. OFAC said the network led by the Jalisco cartel used robocalls to attract potential buyers to presentations, where deceptive sales practices were used to entice them.
After convincing individuals to purchase a property, Kovay Gardens then shared its customer database with CJNG-controlled call centers that carried out timeshare resale, re-rent and re-victimization fraud schemes.
According to OFAC, the fraudulent activity was conducted in part through the resort’s founder, Carlos Humberto Rivera Miramontes, who U.S. officials say has a lengthy history of willingly working with drug traffickers. Rivera Miramontes opened Kovay Gardens more than 20 years ago and worked closely with Michael Ibarra Diaz Jr., a businessman affiliated with the Jalisco cartel who was previously designated by OFAC, to facilitate timeshare sales to American and Canadian tourists who were later defrauded.
“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.
According to OFAC, the Jalisco cartel entered the timeshare business in 2012, using call centers in Mexico to pose as American brokers, lawyers and sales agents. Fluent English-speaking telemarketers contacted timeshare owners in the United States, offering to buy or sell their properties only if they first paid upfront fees for taxes, services or legal paperwork.
In some cases, the scammers reportedly stole the identities of real attorneys and government officials to make their pitch appear legitimate. Victims were repeatedly pressured to send additional money, typically through international wire transfers to Mexican bank accounts.
Authorities say the cartel used these tactics to generate hundreds of millions of dollars in illicit revenue. The FBI estimates that between 2019 and 2023, nearly 6,000 Americans lost around $300 million to timeshare-related scams linked to Mexico. In 2024 alone, almost 900 complaints were filed, totaling more than $50 million in losses.
In addition to sanctioning Kovay Gardens, OFAC also announced sanctions against Rivera Miramontes’ corporate network composed of 13 companies, including businesses in the tourism, real estate and financial services sectors.
The Feb. 19 action marks the sixth time OFAC has sanctioned individuals and entities linked, directly or indirectly, to CJNG’s timeshare fraud activities, bringing the total number of designations to more than 90 to date.
Originally published on Latin Times
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