US sanctions Mexican companies tied to cartel-run timeshare scheme

Four Mexican people and 13 Mexican companies face new sanctions from the U.S. Department of the Treasury’s Office of Foreign Assets Control. They are accused of assisting in a timeshare fraud targeting Americans, led by the Cartel de Jalisco Nueva Generacion, referred to as CJNG.

Timeshare fraud

Officials said Mexican cartels targeted U.S. timeshare owners through call centers in Mexico, staffed with fluent English speakers. The CJNG took control of those schemes near Puerto Vallarta around 2012.

“The Mexican cartels have long ago morphed from ‘drug cartels’ into polyglot organizations where they are pulling in illicit profits from a wide range of criminal activities,” Robert Bunker, senior fellow at Small Wars Journal – El Centro, told Straight Arrow News.

Using people on the inside, the cartel and their associates would contact U.S. timeshare owners and pretend to be U.S.-based brokers, lawyers, sales reps and more.

Then they’d present one of three types of scams.

1)   Exit/re-sale scam: Promising to help sell or exit your timeshare

2)   Re-rent scam: Promising to rent your timeshare

3)   Investment scam: Promising large returns for timeshare-related investments

The common theme from all three is that the fake representatives would then ask owners to pay advance fees and taxes.

According to the FBI, approximately 6,000 Americans reported losing nearly $300 million between 2019 and 2023 in timeshare fraud schemes.

The FBI’s Internet Crime Complaint Center got 900 complaints about timeshare fraud schemes in 2024 alone, with $50 million in losses. The FBI believes both of those numbers are underreported.

Cartel and associates’ sanctions

So, what can sanctions against a cartel of this magnitude and its associates accomplish? It’s a tactic the U.S. has used for decades, including against the famed Medellin and Cali cartels of Colombia.

“It’s been known, in Colombia, as a civil death,” Dr. Nathan Jones, associate professor of security studies at Sam Houston State University, told Straight Arrow News. “Where, once you’re on this list, you and your family can’t use regular money with any business that does business with the United States. And so, you actually had cartel wives telling their husbands, ‘Well, you better figure something out. Go turn yourself in and get yourself off this list, because what good is all the money if I can’t put my kid in private school?’”

Jones said it’s been harder to measure the direct impact in Mexico, but it’s certain that those on these sanction lists will have a much tougher time banking.

“The idea is to make their money useless, at least as it touches the U.S. banking system, financial system, any of that,” Jones said. “And then anybody who does business with them, then potentially also becomes a target there for the U.S. banking system.”

While sanctions are not a quick fix, it can help slowly eat away at the viability of cartels.

“Sanctions build over time and when used in tandem with other strategies they can have positive effects,” said Bunker.

The individuals and companies who receive these sanctions may have trouble getting around them, but it’s a different story for the cartels themselves. They can often find a way of getting around the financial blocks.

“The other issue becomes, ‘could they put it in other people’s names?’” said Jones. “The laws are written up to try to address that. But how do you know? Right? You’d have to go individually and prove, well, this person is actually a proxy for this person. So getting an actual measurement of how effective these are, that’s a really good question.”

CJNG cartel

The CJNG cartel is considered one of the most powerful drug cartels in the world and has been a target of the Trump administration.

“We are coming for terrorist drug cartels like Cartel de Jalisco Nueva Generacion that are flooding our country with fentanyl,” Treasury Secretary Scott Bessent said in a statement. “These cartels continue to create new ways to generate revenue to fuel their terrorist operations.  At President Trump’s direction, we will continue our effort to completely eradicate the cartels’ ability to generate revenue, including their efforts to prey on elderly Americans through timeshare fraud.” 

It could be considered the strongest cartel in Mexico as the Sinaloa Cartel continues to engage in a civil war.

The Trump administration has taken several steps to try and push back against Mexican cartels, including using the U.S. military.

“Putting troops, American troops, even just to do quick raids on Mexican soil, would be a terrible violation of Mexico’s sovereignty,” Jones said. “It might be effective in the individual instance, but that would be a violation of their sovereignty, and that could jeopardize all cooperation between the U.S. and Mexican governments.”

U.S./Mexico cooperation

While the U.S. targets cartels financially, the Mexican government can do the same.

“Mexico also has its own financial intelligence unit, the UIF, and at various times they’ve done quite well in terms of putting out good intelligence reports and doing their own sanctions and being very careful,” Jones said. “What we really need is Mexico to build up those institutions and to work with Mexico to build up those long-term institutions.”

Mexico recently expelled 26 alleged cartel members to the U.S. The U.S. Justice Department wanted those members stateside and promised none of them would face the death penalty.

While these latest sanctions target the finances of a major cartel, it’s a small step in the uphill battle against them.

“CJNG can be targeted and broken up if the time, will, and resources are dedicated to doing so,” Bunker said. “The issue, though, is not only is the U.S. in conflict with criminal organizations (the cartels and their gang proxies) but is at odds with multiple illicit economies the cartels are operating within. Even if we take a cartel off the playing board, the underlying illicit economies are still functioning. New organizations will come in for the great profits that they offer.”