Mexican drug cartels are targeting wealthy, senior Americans with timeshares, according to a recent news release from the Federal Bureau of Investigation.
The FBI reported last week that it has witnessed an uptick in timeshare scams against part-time owners. The scams are relatively complex and typically involve three phases, the bureau said.
‘Robust network of fake company websites’
Assistant Special Agent in Charge Paul Roberts stated, “Timeshare fraudsters aim to suck their victims dry, with devastating consequences to victims’ financial futures, relationships, and physical and emotional health.”
“As the cartels further cement their control of this space, it’s especially critical that the FBI take the lead in addressing this threat to American seniors,” Roberts added.
He noted that the Jalisco New Generation Cartel, the Gulf Cartel, and the Sinaloa Cartel have operated these fraud schemes for over a decade.
“Timeshare fraud has low overhead costs and minimal reinvestment, needing only a rental of small space, telecom setup, and English-speaking employees with access to resort databases,” Roberts explained. “There is lower perceived risk of prosecution and extradition for timeshare fraud but easy cash flow that goes directly into the Mexican banking system and obfuscates funds to facilitate money laundering activities.”
The FBI reported that the scammers involved in the fraud scheme “do extensive research on their potential victims,” creating fraudulent documents and impersonating a number of individuals. The fraudsters deploy “high-pressure sales tactics and cyber-enabled fraud strategies” to trick their victims into believing they are from a trustworthy institution. One such tactic includes “mimicking legitimate entities’ email addresses and forging official documents,” Roberts noted.
Roberts detailed the cartel’s three-step process.
“In these initial communications with victims, the scammers often pretend to be U.S.- or Mexican-based third-party timeshare brokers or sales representatives in the timeshare, real estate, travel, or financial services industry,” he said.
The scammers pressure victims to either exit their timeshare, rent it out, or invest in share certificates. They push the owners to pay upfront charges and taxes.
“The scammers also leverage a robust network of fake company websites, business names and addresses, and registrations with government officials and trade groups to bolster their credibility,” Roberts remarked.
Step one of the scheme concludes once the victim runs out of funds or becomes aware they have been defrauded.
After some time, the scammers will contact the victims again, this time pretending to be an employee of a law firm that wants to help them recoup their losses.
“The scammers often claim the initial scammers have been either charged with fraud or held civilly liable in a U.S.- or Mexico-based lawsuit, and that the victims are owed restitution in the settlement,” Roberts continued. “However, in order to access that restitution money, the victims are told they must pay legal or court fees to the law firms. The scammers then defraud the victims of a series of advance fees related to the settlement, again using fake documents to bolster their credibility.”
In the final phase of their scam, fraudsters will impersonate government officials, including those from the United States Treasury Department’s Office of Foreign Assets Control, Mexico’s Financial Intelligence Unit, or Interpol, the FBI stated.
“Government impersonators claim that they’re contacting victims because they have access to criminal settlements and want to help them recoup their lost money,” the FBI wrote. “Or, impersonators try to scare victims into giving up even more cash. They do this by telling victims that their initial payments to timeshare fraudsters were deemed suspicious.”
“The scammers then tell victims that the authorities determined their payments to timeshare fraudsters were ‘linked to money laundering or terrorist operations.’ They then threaten to either subpoena victims or send them to prison if they don’t pay additional money to ensure their payments are released and their names are cleared,” the agency explained.
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