Federal agencies are warning financial institutions about timeshare fraud schemes associated with Mexico-based transnational criminal organizations.
The Financial Crimes Enforcement Network (FinCEN), jointly with the Department of Treasury’s Office of Foreign Assets Control (OFAC) and the FBI, released a notice on the topic Tuesday (July 16).
In addition, OFAC said Tuesday that it sanctioned three Mexican accountants and four Mexican companies linked to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG), according to a Tuesday press release.
“Cartel fraudsters run sophisticated teams of professionals who seem perfectly normal on paper or on the phone — but in reality, they’re money launderers expertly trained in scamming U.S. citizens,” Brian E. Nelson, undersecretary for terrorism and financial intelligence, said in the release. “Unsolicited calls and emails may seem legitimate, but they’re actually made by cartel-supported criminals.”
In these schemes, transnational criminal organizations operate call centers in Mexico that impersonate U.S.-based third-party timeshare brokers, attorneys or sales representatives; target and defraud U.S. owners of timeshares in Mexico through telemarketing, impersonation and advanced fee schemes; and often target the victims again in re-victimization schemes by impersonating law firms and international authorities, according to the release.
The joint notice released Tuesday detailed the methodologies, financial typologies and red flag indicators associated with timeshare fraud, per the release.
Between 2019 and 2023, about 6,000 U.S. victims reported losing $300 million to timeshare schemes in Mexico, the release said, citing timeshare fraud data from the FBI.
“Treasury and our partners are deploying all tools available to disrupt this nefarious activity, which funds things like deadly drug trafficking and human smuggling, and we encourage the public to use our resources to stay vigilant against these threats,” Nelson said in the release.
Acting Comptroller of the Currency Michael J. Hsu said Wednesday (July 10) that while artificial intelligence and other technologies are being used in frauds, “tried-and-true scams” remain common.
“Often the fraudster poses as a trusted business, government agency or even a bank employee, who asks the victim to wire money to a fake account right away,” Hsu said. “In most cases, once the wire transfer is complete, the funds cannot be retrieved.”
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