May 1, 2023

OFAC designates 7 individuals and 19 Mexican entities with alleged ties to cartel-linked timeshare fraud scheme

On April 27, 2023, the US Department Of Justice designated 7 individuals and 19 Mexican companies for their roles in a timeshare fraud scheme led by the Cartel de Jalisco Nueva Generacion (“CJNG”), a violent organization based in Mexico that is responsible for trafficking large quantities of fentanyl and other deadly drugs into the US.  The CJNG was sanctioned by the US, in 2015, pursuant to the Foreign Narcotics Kingpin Designation Act for its significant role in international narcotics trafficking.  Among OFAC’s new designees is Eduardo Pardo Espino, an alleged financial operator for CJNG who was indicted in 2019 by a federal grand jury in the Southern District of California for conspiracy to distribute methamphetamine and is also accused of making direct payments to CJNG members in connection with the timeshare fraud scheme.  Five of the newly-designated entities are also owned or controlled by Pardo.  OFAC reports that the recent designations were part of a coordinated action with the Government of Mexico and other US Government partners and that sanctions were imposed pursuant to Executive Order 14059, which targets those who engage in or attempt to engage in activities that have materially contributed to the international proliferation of illicit drugs or their means of production.

On March 2, 2023, OFAC designated 8 Mexican companies with direct or indirect links to CJNG timeshare fraud activities, and, the same day, the Federal Bureau of Investigation issued a public service announcement to warn consumers of the scammers targeting timeshare owners in Mexico.  It is important to note that many of the newly-designated individuals and entities were sanctioned for their association with one of the companies designated on March 2, 2023.

As a result of these designations, all property and interests in property of the designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons unless authorized by OFAC.  US persons may also face civil or criminal penalties for violating EO 14059.

Department of Treasury Press Release | OFAC – CJNG Timeshare Fraud Network Chart