Timeshare Scam Calls and Cartels

-- From The Daily Mail.

'How could I be so stupid?' FBI reveals how crafty Mexican cartels scam millions from US timeshare owners
Drug cartel chiefs appreciate the lower risk of getting prosecuted from frauds
The biggest Mexican players are the ultra-violent Jalisco New Generation Cartel 

Timeshare owners who want out of their holiday homes need to be alert, the FBI says.
They're increasingly targeted in cons run by Mexican drug cartels, the agency warns. Victims are most often rich, older Americans looking to recoup some of the money they dropped into their part-time properties.

Some 6,000 victims have reported upwards of $300 million in losses these past five years, says Paul Roberts, who leads FBI New York's Complex Financial Crimes Branch.
'Timeshare fraudsters aim to suck their victims dry, with devastating consequences for victims' financial futures, relationships, and physical and emotional health,' says Roberts.

Among their prey were James, 76, and his wife Nicki, 72, who wanted out of the Lake Tahoe, California, timeshare they bought for nearly $9,000 in the mid-90s but seldom visited.
James jumped at the chance to sell it when he was approached by a slick real estate agent offering upwards of $22,000. But it was in reality a sophisticated con linked to a cartel that cost the couple nearly $1 million within six months. 'It was very elaborate,' James told DailyMail.com.
'That's why I was sucked in. I just thought there were too many players involved for it to be a scam.'

The fraud that devastated James' finance's followed a pattern familiar to federal investigators.
Scammers create bogus documents and impersonate individuals from banks and other trustworthy institutions.

They then use high-pressure sales tactics and phony information to make offers to timeshare owners.

Initial contact is usually made by phone or email, with the scammer pretending to be a US or Mexican-based third-party timeshare broker, the FBI said.

They then urge the owner to rent their property or sell out of the timeshare scheme.
They push victims to pay upfront fees or taxes to secure the deals. Later, the scammers re-approach the victims posing as lawyers trying to help them recoup the money they lost to the first con artists and asking for court or legal fees, the FBI said.

They even circle back again, impersonating government officials who say they can help recoup some of the lost money — for a fee, of course. Scammers have even threatened timeshare owners, saying their initial payment was dodgy, and they are being fined or investigated.

All of these ploys are an effort to part victims from their money.

Roberts says it's hard to know how many cons occur because victims are loath to report being stung.  'The worst thing that people can do is suffer in silence out of shame or fear of judgment,' he said in an alert this month.

Timeshare scams have been around for years, but Mexican gangsters have jumped on the bandwagon this past decade, the FBI says.

The Gulf Cartel, and the Sinaloa Cartel are dabbling in scams, but the biggest Mexican players are the Jalisco New Generation Cartel (CJNG), it adds. Independent call centers in Mexico with English-speaking staff are also likely playing a role, the FBI says.

Gangsters appreciate the low startup costs and cash flows that are easy to hide, says Roberts.
The cons have a 'lower perceived risk of prosecution and extradition,' he adds.

Roberts urges timeshare owners to be on the lookout for scammers and any red flags, such as being asked to pay upfront fees or taxes in advance.

The FBI has the following advice:
Don't answer phone calls from unfamiliar numbers.
If someone contacts you about your timeshare and requests cash upfront, stop communicating with them, and don't pay up.
Never sign, notarize, or send any power-of-attorney or legal documents via email.

https://www.dailymail.co.uk/news/article-1357 ... wner-fraud.html

How do you "lose" nearly a million dollars trying to dispense with a $9000 timeshare?

This doesn't even pass the "sniff test".  P.T. Barnum said it best.

The specifics of this story are a bit far fetched, however it doesn't change the fact that there are criminals, regardless of their affiliation or location that are working in these ways.  I was contacted directly by such an outfit, and they called as "attorneys in mexico" and they claimed "to be working with mexican federal law enforcement" and they used some information, that more than likely is either leaked or public knowledge to associate the activity they are working with related to myself to get me to give them all sorts of information, I told them that I was very interested in what they were discussing and to email me, and they did!  Sent over some semi-decent forms and everything requesting all my personal details, claiming it was necessary to be able to work with my case.

They had real looking names, email addresses and website, and showing a location, in mexico for their offices, but with a little review none of it checked out.

In speaking with them they sounded very professional and very confident, and if I didn't know any better I would have taken them at face value and proceeded right along with it.

They have continued to contact me and follow up by phone and email, so they are persistent.

Why are you even communicating with these criminals?  Every contact is another opportunity for them to steal your money.

The commentor sounds too skeptical for entrapment, and the person's findings track well with those of Federal watchdogs. Now there is better intel to pass along to them, which would never be obtained without some arm's length engagement.

To answer your smell test from last week, those massive losses are never incurred all at once but through serial reloading. This is a feature of other long term schemes like variants of "Russian Bride" romance fraud and "Family Crisis" extortions. Step One, lock in emotional investment. Step Two, isolate the victim. Step Three, keep changing the excuse for bloodletting until the flow stops. It's very easy for us to press noses to the window and jeer until the day someone makes the offer you can't refuse.

Looks like the 'Mexican Connection' writing has been on the wall for a decade, and the cartels' Travel Fraud Divisions are smarter than the average scammers. Said the FBI and SEC four years ago:

    "... some fraudsters design convincing websites that may mimic the websites of real U.S. companies, but that contain false information, such as incorrect names for company representatives. In other cases, fraudsters file fraudulent documents with state or local officials and even register with their local Better Business Bureau using the false names from their fraudulent documents. In cases where the fraudsters pose as stock brokers, they may assume the identities of real registered brokers without the true brokers’ knowledge."

This makes a good argument for "lateral reading", the practice of studying around the edges of your subject before reading what the subject says for itself. The sneakier cartel frauds have anticipated skeptics and poisoned the lateral data well, forcing us to turn up the shill radar while casting a wider inquiry net. They also exhibit a higher work ethic, studying their targets to enhance the convincing lies. They're counting on us to run out of time or energy to sift out disinformation and allow emotional appeals to weaken us.

USA Today profiled other victims last Winter who fell very hard for reloading, slowly pumping life-ruining amounts of money into cartel coffers. Their star victim Stephen, in middle age and hoping to unload his Cancún condo, was suckered in discrete stages across a dozen years. "By late last year, Stephen had paid Mexican telemarketing scammers just shy of $1.8 million", say the obtained records. He was prodded by a variety of lies, about barriers to the sale, then an offer to compensate for the first swindle, and later coercion to resolve criminal charges and scrutiny from Interpol.

I'm struck by how much of this bad business model borrows from Indian criminals and their aftermarket payday loan collection schemes. They also are known to play out in stages, threatening jail time for debtors who try to cut their losses, then threatening both prison and civil court penalty over phantom loans, later trying to collect once more on the premise that "you paid scammers" previously, and much later offering to help recover from all those other dirtbags by paying upfront fees to yet more dirtbags. It's the hole you never escape because you're excavating from its bottom.

Speaking of which, another detail parallels the primary barely legal retail payday loan market:
    "Buying into a few weeks of a condo is seemingly hawked on every corner in many Mexican resort towns, and people on vacation buy in, only to find later that they’re paying for time they don’t use and are looking to sell."

Visit any town near a military base or a low-income populace and find its business zones saturated with payday lenders, auto title lenders, hock shops, and whatever adjacent variants the law hasn't yet caught up to. The "easy cash" predators are open all week to entrap J.O.B. holders (Just Over Broke) and fresh youngsters who can strip a rifle in the dark but have never managed a home budget. The bloodletting is perhaps set to a more efficient weekly or monthly subscription plan, but the parasitic relationship is the same.

One last similarity we might apply to nearly every fraud player:
    "Few of the telemarketing firms have been criminally charged, partly because the business shape-shifts, abandoning shell companies and bank accounts as authorities identify them, then quickly creating new ones."

Where Fraud Mexican Style detours is in its approach to employee loyalty:
    "Last June, cartel leaders turned their fury on eight call center employees who local news outlets reported had tried to quit. Their remains were found in 45 black plastic bags at the bottom of a canyon outside Guadalajara."

While the Gulf and Sinaloa cartels, the latter having once answered to El Chapo, have also run sidecar fraud schemes, the one to watch is Jalisco New Generation, a major mover of cocaine and fentanyl with tendrils in 90 percent of Mexican states. They also really like their guns, the bigger and nastier the better. I'll spend my Pet Peeve Wild Card right here to note that we cannot keep complaining about dangerous contraband flowing upward into North America while ignoring the other dangerous contraband just as steadily flowing south. See also: Definition of symbiosis.

In Spring 2023 a Treasury Department group sanctioned a pile of crooks and companies within the so-dubbed "timeshare fraud network", named all names and published what mug shots they had, releasing the worst-designed BOLO poster I've ever seen. (Seriously, T-men, I think you can afford someone who cleared two years in art school to help you.)

But of course those grim faces and names are not the ones seen by overtaxed timeshare holders, who are shown all kinds of criminal disguises, including characters from Treasury and other agencies working to bust the cartels. Usually the phantom Fed can be persuaded to release a victim's "frozen" funds by, say it with me now, throwing more money at the ice chest. So we're right back to applying preventive financial care, which never arrives in time for that moment of salesmanship which succeeds.

Timeshare property, which I struggle to discuss without starting a new essay, is in general an overvalued and costly financial trap. The operators peddle another form of barely legal fraud, glancing elbows with payday loans, junk debt collection, sham charities, every negative option biller since Columbia House, annuity and insurance buyout shops (like the operatic J.G. Wentworth), Medicare Advantage plans, and sales of kitschy swag to defray the legal bills of corrupt public figures. Timeshares are all sunk cost and rarely if ever return investment value to interval owners, no matter what the sales video and glib barkers said at the point of purchase. They're governed by tangled access rules and mystifying contracts, and selling them for a reasonable price requires the skill of a chest freezer dealer in the Arctic Circle. (I'm in appliance sales training now as the Great Greenhouse Gassing may open this market by 2050.)

There's no magic or fast track to equitable resale and no random Mister Moneybags wants to pay you thirty percent over your cost. The more typical end of ownership is jettison at an unceremonious loss, or expiration of the owner if there is no sly transfer to heirs. You don't want to light my fuse to the topic of timeshare dumper rental lawyers, really selling another advance fee fraud, a racket which has been around a lot longer than the murderous Mexicans have played it. Having burnt umpteen hours across a few years of study, I truly regret that I cannot describe a best "right way" out of an already tainted deal. I can stress with bolds and underlines that no one teasing you -- friend or stranger to a drug cartel -- with an easy solution can be trusted.


FBI and OIEA Warn Public that Fraudsters are Targeting Owners of Timeshares in Mexico - Securities and Exchange Commission, Office of Investor Education and Advocacy, 08 Oct 2020
U.S. sanctions 8 Mexican companies for timeshare fraud schemes - Mexico News Daily, Mar 2023
Scammers Targeting Owners of Timeshares in Mexico - FBI / IC3 alert, Mar 2023
Treasury Sanctions Fugitive, Others Linked to CJNG Timeshare Fraud Network - US Treasury, Office of Foreign Assets Control, Apr 2023
Timeshares, Vacation Clubs, and Related Scams - FTC advisory (with one of their cute "Infographics"), Dec 2023
These Americans bought timeshares in Mexico. They were unknowingly funding a cartel - USA Today, 22 Feb 2024