Recent research has shown that Mexican drug cartels are targeting wealthy, elderly Americans who own timeshares.news release From the Federal Bureau of Investigation.
The FBI reported last week that they’ve seen an increase in timeshare fraud targeting part-time owners. The scams are relatively complex and typically involve three stages, the FBI said.
“A powerful network of fake corporate websites”
“Timeshare scammers aim to siphon money from their victims with devastating consequences for their financial futures, relationships and mental and physical well-being,” said Assistant Special Agent in Charge Paul Roberts.
“As the cartels continue to exert greater control over this sector, it is especially important that the FBI take the lead in addressing this threat to older Americans,” Roberts added.
He noted that the Jalisco New Generation Cartel, the Gulf Cartel and the Sinaloa Cartel have been running these fraud schemes for more than a decade.
“Timeshare fraud has low overhead and minimal reinvestment, requiring only a small space rental, communications equipment, and English-speaking employees with access to a database of resorts,” Roberts explains. “Timeshare fraud is considered a low risk of prosecution or extradition, but the cash flow goes directly into the Mexican banking system, hiding funds and facilitating money laundering operations.”
The FBI reported that the scammers involved in this fraud scheme “thoroughly research potential victims,” create false documents, and impersonate numerous people. The scammers deploy “high pressure sales tactics and cyber-enabled fraud strategies” to trick victims into believing they are from trusted entities. One such tactic includes “mimicking email addresses from legitimate organizations and forging official documents,” Roberts noted.
Roberts detailed the cartel’s three-step process.
“In initial interactions with victims, scammers often pose as third-party timeshare brokers based in the U.S. or Mexico, or sales representatives from the timeshare, real estate, travel or financial services industries,” he said.
Scammers pressure victims to either cancel their timeshare, rent it out, or invest in stocks, forcing owners to pay upfront fees and taxes.
“Scammers leverage a robust network of fake company websites, names and addresses, and registrations with government officials and industry associations to enhance their credibility,” Roberts said.
The first phase of the scheme ends when the victim runs out of funds or realizes they have been scammed.
After a while, the scammer will contact the victim again, this time posing as an employee of a law firm wanting to help them recover their losses.
“The scammers often claim that the original scammers have been indicted or civilly charged for fraud in U.S. or Mexico-based litigation and that the victim is entitled to compensation in a settlement,” Roberts continued. “However, the victim is told that in order to receive compensation, they must pay legal fees or court costs to a law firm. The scammers then defraud the victim of a series of upfront payments related to the settlement, again using false documentation to bolster their own credibility.”
In the final stage of the scam, the scammers impersonate government officials, including officials from the U.S. Treasury Department’s Office of Foreign Assets Control, Mexico’s Financial Intelligence Unit and Interpol, according to the FBI.
“Government impersonators claim they are contacting victims because they have access to criminal settlements and hope to help victims recover money they have lost,” the FBI wrote. “Alternatively, the impersonators try to intimidate victims into parting with more cash. They do this by telling victims that their initial payment to the timeshare scammer is suspicious.”
“The scammers then tell their victims that authorities have determined that payments to the timeshare scammers are ‘related to money laundering and/or terrorist activity,’ and threaten to issue them with subpoenas or jail time unless they pay additional money to ensure that the payments are forgiven and their reputations restored,” authorities explained.
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