By SDCN Staff
WASHINGTON–The U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned a timeshare fraud network led by the terrorist Cartel de Jalisco Nueva Generacion.
The action targets Kovay Gardens, a Mexican timeshare resort, as well as five Mexican individuals and 17 Mexican companies associated with the network. Many of these individuals and entities are based in or near Puerto Vallarta, a popular tourist destination that also serves as a strategic stronghold for Cartel de Jalisco Nueva Generacion.
Treasury Department officials label the cartel as a brutally violent terrorist cartel that continues to diversify its illicit revenue streams beyond drug trafficking, including through timeshare fraud and fuel theft.
For decades, Mexico-based cartels have targeted U.S. timeshare owners through call centers staffed by English-speaking telemarketers. Around 2012, the cartel seized control of timeshare fraud operations in Puerto Vallarta and the surrounding Bahía de Banderas region in Jalisco. The sophisticated schemes often prey on older Americans, some of whom lose their life savings. The scams can persist for years, leaving victims financially and emotionally devastated while generating significant profits for criminal organizations.
“Whether through trafficking fentanyl into our borders or orchestrating timeshare fraud schemes, terrorist drug cartels like CJNG consistently victimize Americans for profit,” said Secretary of the Treasury Scott Bessent.
According to the Office of Foreign Assets Control, the action was taken pursuant to Executive Order 14059, which targets the proliferation of illicit drugs and their means of production, and pursuant to E.O. 13224, as amended, which targets terrorists and their supporters.
The action marks the culmination of a coordinated investigation led by the Homeland Security Task Force in New York, involving the Federal Bureau of Investigation, the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation and U.S. Customs and Border Protection. The Treasury Department’s Office of Foreign Assets Control worked closely with the task force, which targets the trafficking of illicit drugs and the criminal networks, facilitators and financial systems that enable their production and distribution.
Officials said the whole-of-government effort is designed to strengthen operational coordination and maximize pressure on transnational criminal organizations. The Office of Foreign Assets Control also coordinated the action with Mexico’s financial intelligence unit, the Unidad de Inteligencia Financiera.
Cartel de Jalisco Nueva Generacion is considered one of the most powerful cartels in the world. It has conducted intimidating acts of violence, including attacks on the Mexican military and police with military-grade weaponry, the use of drones to drop explosives on Mexican law enforcement, and both assassinations and attempted assassinations of Mexican officials. The cartel has also executed its own recruits who defy orders. All of these acts are perpetrated in furtherance of their relentless pursuit of illicit proceeds.
The U.S. government has taken multiple actions over the past decade targeting the cartel.
On April 8, 2015, the Office of Foreign Assets Control designated the cartel under the Foreign Narcotics Kingpin Designation Act, citing its significant role in international drug trafficking.
Federal officials expanded those sanctions on Dec. 15, 2021, when Foreign Assets Control again designated the group under Executive Order 14059, which targets foreign persons involved in the global illicit drug trade.
On Feb. 20, the U.S. Department of State formally designated the Jalisco New Generation Cartel as a Foreign Terrorist Organization and a Specially Designated Global Terrorist, escalating the U.S. government’s efforts to disrupt the group’s operations and financial networks.
