(NewsNation) — A veteran who was looking to unload an unused timeshare became entangled in a massive fraud costing him thousands and orchestrated by a powerful Mexican cartel, an increasingly common scam that is targeting more Americans.
The retired law enforcement officer and veteran, who went only by “James,” told AARP that a simple call asking if he wanted to sell his Lake Tahoe timeshare ended up costing him almost $900,000 and months of phone harassment.
That call was made by a call center in Mexico operated by the Jalisco New Generation Cartel, which started a timeshare fraud business in Puerto Vallarta and Cancún spanning over two dozen scam-call centers, reported the outlet.
They prey on Americans, largely elderly, like James in order to fund their criminal enterprise.
James did not use his full name to protect his identity from the cartel, according to AARP.
The veteran told the outlet he and his wife bought a timeshare in Lake Tahoe for $8,900 in 1996.
The couple barely used the property over the years, and fees continued to accumulate, but getting out of the contract was complicated and difficult.
But when they got a call in October 2022 saying a wealthy Mexican national was looking to buy their timeshare, they jumped at the prospect of unloading it, according to AARP.
The call came from a man named Michael, who told James the buyer was offering $22,470.
“Well, that’s a little over double what we had paid for it, so my wife and I said ‘Well, why not?’ We’ll give it a shot. He sent the paperwork. We received email copies of a contract from a escrow company, a commercial escrow company actually, out of New York City. Everything looked reasonable,” James told AARP.
A few days later, Michael told James that he needed to pay almost $2,500 in transfer and wire costs before the buyer could take ownership but that the money would be refunded to him.
The amount did get refunded into an online escrow account James had been monitoring, but over the next few months, more and more fees began to pop up, and more people begin calling him about the sale, he said.
“I get a call from an individual identifying himself as Jesus, and he’s a representative of uh, let’s see if I’ve got his … director of the general finance international finances at Banco de Mexico. So that’s the, the head director of foreign accounts, supposedly at Bank of Mexico. He calls and explains that, uh, there’s a $16,155 fee for erase of records insurance and notary fees,” James told the outlet.
“I’m relying on the fact that we’ve got the uh seller representative, Michael, representing me, supposedly, we have a escrow company out of New York City and then we have the Bank of Mexico representative involved, and my thoughts were that this escrow company looks legit online.”
Over the next months, the calls became more frequent and aggressive, according to the outlet. At this time, James’ wife gets diagnosed with cancer and is frequently hospitalized.
Despite his trying to pull out of the deal, the scam becomes more complicated as the individuals tell James they have to go to Mexico to sort out issues with the government and that he will need to reimburse them for the costs.
The demands for money piled up, and James kept paying until it ballooned to nearly one million dollars.
Finally, he contacts a lawyer for help.
That’s when he finds out he’d fallen victim to a complex call center scam run by a Mexican cartel that preys on American timeshare owners.
The Jalisco cartel, which is widely known for its violence and drug operations, forayed into call center scams around 2010 in order to supplement their streams of revenue, reported USA Today.
The cartel figured out how to defraud Americans with timeshares by crafting well-planned ways to persuade elderly Americans to send money to Mexican bank accounts.
The cartel hires call center workers who speak perfect English and teaches them to lure unsuspecting Americans into believing they are steps away from freeing themselves from their timeshares, the outlet reported.
Nearly 10 million Americans own a timeshare, according to the American Resort Development Association, a decision many come to regret as fees quickly accumulate, and leaving the contract becomes an almost impossible task.
That’s where the cartel found an opportunity, the outlet reported.
The return on investment is better than drug trafficking because of the cost of transporting contraband, AARP reported.
Hiring call center workers who make calls all day to people who no longer want a timeshare is a much quicker and less risky way to make money.
A U.S. government official estimated the fraud from Mexico-based companies at hundreds of millions of dollars a year, reported USA Today.
The U.S. Treasury Department has sanctioned 40 Mexican companies associated with the Jalisco cartel and its telemarketing scam, but few people have been arrested, the outlet reported.
According to USA Today, the Federal Bureau of Investigation has received an average of 1,400 complaints per year related to timeshare fraud from Mexico over the past five years.
Most don’t ever recover their money.
