Washington, Feb 20 (.) The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Thursday sanctioned a Mexico-based timeshare fraud network linked to the terrorist cartel Cartel de Jalisco Nueva Generacion (CJNG), targeting a luxury resort and multiple individuals and companies accused of defrauding American citizens.
The action designates Kovay Gardens, a timeshare resort in Mexico, along with five Mexican nationals and 17 Mexico-based companies associated with the network. Many of the sanctioned individuals and entities operate in or around Puerto Vallarta, a popular tourist hub that authorities describe as a strategic stronghold for CJNG.
Treasury officials said CJNG, known for its violent operations and drug trafficking activities, has expanded its criminal portfolio to include timeshare fraud and fuel theft. These schemes, they said, generate substantial illicit revenue for the cartel at the expense of U.S. victims, particularly older Americans who are often targeted and risk losing their life savings.
“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. He added that under President Donald Trump, the administration would continue efforts to dismantle the cartels’ financial networks and revenue streams.
The sanctions were imposed under Executive Order 14059, which targets the proliferation of illicit drugs and related networks, and Executive Order 13224, as amended, which focuses on terrorists and their supporters.
The move follows a coordinated investigation led by the Homeland Security Task Force-New York, involving the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigation (IRS-CI), and U.S. Customs and Border Protection (CBP). OFAC also coordinated with Mexico’s financial intelligence unit, the Unidad de Inteligencia Financiera (UIF).
Over the past three years, Treasury components including OFAC and the Financial Crimes Enforcement Network (FinCEN) have intensified efforts to combat Mexico-based timeshare fraud schemes. Authorities said these efforts have increased awareness among financial institutions and improved reporting of suspicious transactions.
According to Treasury data, FinCEN has received more than 850 Suspicious Activity Reports citing a joint advisory on timeshare fraud, identifying approximately $330 million in potentially related suspicious activity. On average, FinCEN receives about 40 such reports each month.
CJNG is regarded as one of the most powerful criminal cartels globally. It was designated under the Foreign Narcotics Kingpin Designation Act in 2015 and later under Executive Order 14059 in 2021. On February 20, 2025, the U.S. Department of State designated CJNG as a Foreign Terrorist Organization and a Specially Designated Global Terrorist.
Authorities say the cartel has carried out violent attacks against Mexican military and police forces, used drones to drop explosives, and been involved in assassinations and internal executions. Beyond drug trafficking, CJNG has diversified into fuel theft, extortion, and complex financial scams such as timeshare fraud.
US officials said the schemes typically involve call centers in Mexico staffed by English-speaking operators who pose as legitimate brokers, attorneys, or financial service providers. Victims are told they can sell, rent, or exit their timeshare agreements, but must first pay advance “fees” or “taxes.” After payment, additional fees are demanded, while the promised proceeds never materialize.
Funds are often transferred via international wire to accounts in Mexican banks and brokerage houses.Treasury warned that re-victimization scams are also common. In such cases, fraudsters impersonate law firms or government officials, claiming they can recover lost funds for an upfront fee or threatening victims with fines and imprisonment over alleged suspicious transactions. OFAC issued a public alert in March 2023 cautioning that scammers may falsely claim to represent the agency.
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