Treasury Department: Cartel Operated Fraudulent Timeshare in Puerto Vallarta
The U.S. Treasury Department has sanctioned Kovay Gardens, a resort in Nayarit, Mexico, for its alleged role in a fraudulent timeshare scheme. The establishment is linked to the Cartel de Jalisco Nueva Generación (CJNG), which has exploited American tourists for over a decade.
Fraudulent Timeshare Operations
Kovay Gardens presents itself as an exclusive getaway along the Bahía de Banderas, boasting luxurious amenities such as a private beach and multiple pools. However, behind its facade, U.S. officials assert it functions as a fraud operation orchestrated by a major drug cartel.
Details of the Allegations
The accusations state that potential buyers were enticed with promises of luxury stays and the potential for rental income. Once contracts were signed, victims allegedly faced inflated charges on their credit cards.
- Victims’ data was sent to CJNG-controlled call centers.
- These centers executed further investment scams on unsuspecting customers.
- Many victims were later contacted by individuals posing as lawyers, offering to help recover lost funds for an additional fee.
Impact on U.S. Citizens
The U.S. Treasury Department highlights significant financial losses incurred by American tourists. Reports indicate that between 2019 and 2023, around 6,000 individuals reported losses of nearly $300 million due to similar schemes. An additional $50 million in losses has been reported in 2024 alone.
Extent of the Criminal Network
The CJNG’s influence extends throughout the Nayarit and Jalisco regions, where it controls many fraudulent timeshare operations. Audias Flores Silva is identified as a key figure overseeing these activities.
Recent Developments
In March 2023, a U.S. alert on fraud targeting Americans in Mexico led to more than 850 suspicious activity reports. These flagged approximately $330 million in potentially fraudulent transactions.
The U.S. Treasury reports that the Financial Crimes Enforcement Network (FinCEN) now receives about 40 reports each month regarding similar fraud cases.
Broader Implications
This sanction underscores the CJNG’s expansion beyond traditional drug trafficking into other forms of crime. The cartel is involved in various illegal activities, including fuel theft and extortion, often disguising its operations with seemingly legitimate businesses.
As authorities pledge to combat these fraud schemes, continued vigilance is necessary to protect American tourists from falling victim to such operations.
