Cartel Timeshare Scams Targeted Vulnerable Americans

Federal authorities have imposed sanctions on Kovay Gardens, a resort located in the Puerto Vallarta area of Mexico, and associated individuals and companies. These sanctions are part of an effort to dismantle a fraudulent timeshare network believed to be controlled by the Cartel de Jalisco Nueva Generacion (CJNG), whose leader, El Mencho, was reportedly killed in late February 2026. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) issued the sanctions, targeting entities and individuals linked to the network, many of whom are based in or near Puerto Vallarta. This operation underscores how CJNG's illicit revenue generation extends beyond its known involvement in international narcotics trafficking, encompassing activities such as timeshare fraud and fuel theft. The resort's founder, Carlos Humberto Rivera Miramontes, and several individuals involved in call center operations have been specifically named in the sanctions. U.S. persons are prohibited from engaging in any transactions involving Kovay Gardens properties, and existing U.S. owners must report their interests to OFAC.

The CJNG has been implicated in timeshare fraud schemes in the Puerto Vallarta region since approximately 2012, engaging in lengthy scams that have led to significant financial and emotional devastation for victims, primarily older Americans. The fraud model involved deceptive robocalls, misleading sales presentations, systematic credit card overcharging, and the exploitation of customer databases for resale and re-rent scams, often requiring victims to pay advance fees that were never returned. Revictimization schemes, where scammers impersonated lawyers or government officials, were also common. Between 2019 and 2023, approximately 6,000 Americans reported losses totaling nearly $300 million due to timeshare fraud in Mexico, though actual losses are likely much higher. The CJNG's operations in the timeshare market also extend to Cancun, and its control in Nayarit state is reportedly managed by operatives on behalf of Audias Flores Silva, a regional commander for whom the State Department offers a $5 million reward.