Home / General / Drug cartels get in on the timeshare scam

Drug cartels get in on the timeshare scam

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In the earlier parts of the century, trips to Vegas generally entailed someone in the hotel lobby offering you some kind of gift if you would listen to a high-pressure pitch about timeshares. Products and/or services that need high-pressure sales to sell them tend to be scam-adjacent if not outright scams, so I always turned down the gift although of course travelling to Vegas I was identifying myself as some kind of likely mark.

Jalisco New Generation is taking things to the next level:

First the cartel cut its teeth with drug trafficking. Then avocados, real estate and construction companies. Now, a Mexican criminal group known for its brutality is moving in on seniors and their timeshares.

The operation is relatively simple. Cartel employees posing as sales representatives call up timeshare owners, offering to buy their investments back for generous sums. They then demand upfront fees for anything from listing advertisements to paying government fines. The representatives persuade their victims to wire large amounts of money to Mexico — sometimes as much as hundreds of thousands of dollars — and then they disappear.

The scheme has netted the cartel, Jalisco New Generation, hundreds of millions of dollars over the past decade, according to U.S. officials who were not authorized to speak publicly, via dozens of call centers in Mexico that relentlessly target American and Canadian timeshare owners. They even bribe employees at Mexican resorts to leak guest information, the U.S. officials say.

The scam represents the latest evolution of the Jalisco New Generation, which is entrenched in both illegal and legal sectors of the economy. With little more than a phone and a convincing script, cartel employees are victimizing people across multiple countries.

“I’m old, just like these clients,” said Michael Finn, founder of Finn Law Group in St. Petersburg, Fla., which has represented thousands of people facing various forms of timeshare fraud. “We tend to be trusting when someone calls chatting us up and selling us these dreams.”

Mr. Finn realized how serious this type of fraud was becoming four years ago, when he received a call from a desperate woman whose mother had wired $1.2 million, her entire life savings, to Mexico to sell her timeshare.

The timeshare industry is booming, with $10.5 billion in sales in 2022, a 30 percent jump from the year before, according to the American Resort Development Association. Nearly 10 million American households own timeshares, the association said, spending an average of about $22,000 for their investment on top of annual fees of around $2,000. Most timeshares are beach resorts.

There was nothing particularly subtle about the con,just making an above-market offer on the timeshare, and then asking for an escalating series of transfers until the mark is bled dry. And I wonder how many cases there are like this, where one spouse understood what was going on but their partner decided to give away their life savings anyway:

During the two weeks that James, the timeshare owner who lost nearly $900,000, was speaking to The Times, he slowly realized he was never going to see his money again. His wife, Nicki, is livid, having warned him from the very beginning.

The scary thing is that according to the financial columnist who ended up giving con artists $50,000 in cash for reasons I still don’t fully understand, the younger generations are if anything more vulnerable to these scams. Hell, one day a proven con artist might even be able to become president of the United States some day.

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