Cartel-Linked Financial Crime

The U.S. Treasury Department has sanctioned Kovay Gardens, a 22‑room beachfront timeshare near Puerto Vallarta, Mexico, and an associated network of people and companies, accusing them of running a cartel‑directed fraud operation that has siphoned hundreds of millions of dollars from U.S. victims. Officials say the resort operated under the control of the Cartel de Jalisco Nueva Generación (CJNG) as a "vertically integrated" scam: luring Americans—often older retirees—into timeshare deals, overcharging their cards, then feeding their data into CJNG‑run boiler‑room call centers that repeatedly targeted them with fake recovery, investment and extortion schemes. A 2023 U.S. alert on Mexico‑based timeshare fraud has already generated more than 850 suspicious‑activity reports flagging about $330 million in suspect transfers, while the FBI says roughly 6,000 U.S. victims reported nearly $300 million in losses from 2019–2023 and another $50 million in 2024, numbers officials believe are undercounts. Treasury says the operation in Jalisco and Nayarit was overseen by CJNG commander Audias Flores Silva and reflects the cartel’s diversification beyond narcotics into tourism, fuel theft, extortion and financial fraud, often hidden behind legitimate‑looking businesses. For U.S. travelers and banks, the case underscores both the risks of high‑pressure timeshare pitches in Mexico’s resort zones and the degree to which cartel finance now runs through consumer fraud as well as drugs.