The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on a timeshare fraud network allegedly operated by the Cartel de Jalisco Nueva Generacion (CJNG), a criminal organization designated as both a Foreign Terrorist Organization and Specially Designated Global Terrorist by the U.S. State Department. The action targets Kovay Gardens, a resort in Mexico, along with five individuals and 17 companies linked to CJNG, many based around Puerto Vallarta.
CJNG is known for violent activities and has diversified its operations beyond drug trafficking into schemes such as timeshare fraud and fuel theft. These schemes have led to significant financial losses for U.S. citizens, particularly older Americans who are often targeted.
“Whether through trafficking fentanyl into our borders or orchestrating timeshare fraud schemes, terrorist drug cartels like CJNG consistently victimize Americans for profit,” said Secretary of the Treasury Scott Bessent. “Under President Trump’s leadership, we will continue our efforts to completely eradicate the cartels’ ability to generate revenue and terrorize Americans.”
U.S. authorities report that timeshare fraud in Mexico has affected American victims for decades, resulting in hundreds of millions of dollars in losses that benefit criminal organizations such as CJNG. Over the past three years, coordinated efforts from OFAC and other Treasury components have increased awareness among financial institutions and improved reporting of suspicious activity related to these scams.
The latest sanctions were issued under Executive Orders targeting illicit drug proliferation and terrorism support networks. The investigation was led by Homeland Security Task Force-New York with involvement from agencies including the FBI, DEA, IRS-CI, CBP, and Mexican authorities.
CJNG has established control over timeshare fraud operations in regions like Bahia de Banderas since around 2012. The cartel uses information obtained from insiders at resorts to contact U.S.-based owners through call centers posing as legitimate brokers or attorneys. Victims are asked to pay advance fees or taxes via international wire transfers but never receive promised payments; instead they may be subject to further scams impersonating law firms or government officials demanding additional payments.
A joint notice from FinCEN, OFAC, and the FBI provided guidance on identifying these schemes for financial institutions. Since then, FinCEN has received more than 850 Suspicious Activity Reports referencing this notice; collectively these reports identified about $330 million in potentially fraudulent transactions associated with timeshare scams involving suspected links to Mexican criminal organizations.
According to FBI data between 2019 and 2023, nearly 6,000 U.S. victims reported losing almost $300 million due to Mexican timeshare fraud schemes; in 2024 alone there were nearly 900 complaints with reported losses exceeding $50 million.
Kovay Gardens is described as central to CJNG’s vertically integrated model of defrauding timeshare owners through deceptive sales tactics—such as promising rental income—and sharing customer data with cartel-run call centers for ongoing scams including resale or re-rent offers that require upfront payments.
Several individuals connected with Kovay Gardens—including founder Carlos Humberto Rivera Miramontes—were sanctioned alongside his corporate network comprising businesses involved in tourism, real estate, finance services, business services, holding companies and fuel supply.
Regional operations are reportedly overseen by Audias Flores Silva (“Flores Silva”), a CJNG commander for whom there is a $5 million reward offered by the State Department; subordinates Oscar Enrique Jimenez Tapia (“Tagayas”), Jose Luis Gutierrez Ochoa (“Tolin”), Jonathan Faustino Rios Gonzalez (“Johnny Hood”), and Jose Eduardo Palacios Rodriguez were also sanctioned along with their associated businesses.
This marks OFAC’s sixth round of sanctions against those linked directly or indirectly to CJNG’s timeshare activities—over 90 individuals or entities have been designated so far.
As part of these measures all property interests belonging to designated persons within U.S jurisdiction are blocked; any entity owned at least half by one or more blocked persons is also subject to blocking measures under OFAC regulations. Transactions involving blocked parties are generally prohibited without specific authorization from OFAC; violations can result in civil or criminal penalties even on a strict liability basis according to enforcement guidelines (https://ofac.treasury.gov/faqs/topic/1526).
Financial institutions worldwide may face secondary sanctions if they facilitate significant transactions for those designated today; non-U.S persons cannot cause violations nor engage in evasion tactics related to these sanctions (https://www.fincen.gov/whistleblower).
Victims seeking assistance can file complaints via https://www.ic3.gov/, while older victims may use the National Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311). Additional resources include an FBI webpage dedicated to timeshare fraud prevention.
