The Financial Crimes Enforcement Network, together with the Office of Foreign Assets Control and the FBI, today issued a notice alerting financial institutions to methodologies, financial typologies and red flags associated with timeshare fraud conducted by Mexico-based transnational criminal organizations, or TCOs, including the Jalisco New Generation Cartel. TCOs target U.S. owners of timeshares in Mexico through complex, often yearslong telemarketing schemes, and use illicit proceeds from timeshare fraud to diversify revenue streams and finance other criminal activities, including the manufacturing and trafficking of illicit fentanyl and other synthetic drugs into the U.S., according to the agencies.
The notice cites several behaviors and financial red flags that suggest U.S. bank customers are victims of timeshare fraud. They include customers uncharacteristically wiring funds to Mexico while citing the need to pay the funds immediately to pay “taxes” or “fees,” or customers sending an unusual volume of wire transfers to Mexican banks or brokerage houses. In terms of red flags to identify fraudulent counterparties, they include newly formed Mexican companies in the timeshare space with little to no online presence, or new Mexican companies that have received an unusual amount of wire transfers from U.S. bank accounts. Along with the joint notice, OFAC sanctioned additional individuals and entities linked to the cartel’s timeshare activities.
