Timeshare terror leaves retired couple out of $50,000 after being defrauded

The FBI is issuing a stark warning to timeshare owners about a widespread telemarketing scam linked to a brutal Mexican drug cartel. This scheme targets unsuspecting property owners, resulting in significant financial losses. Here’s what you need to know and how to protect yourself.

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Terrible experience of timeshare fraud by the Dimitruks

In late 2022, Mr. and Mrs. Dimitruk, a retired Canadian couple, received a call to sell their timeshare in Florida. The scammers, knowing the specific details of the timeshare, promised a Mexican buyer willing to pay above market value. The fraudsters used a sophisticated process involving a bogus New York escrow company, ecurrencyescrow(.)llc. The Dimitruks were asked to fill out forms and remit more than $3,000 in “administrative” and “processing” costs.

For almost a year, the fraudsters made additional financial demands, citing various taxes and fees. The couple even sent $5,000 to pay off the balance on the timeshare, believing it was part of the selling process. Mr. Dimitruk, a 73-year-old retired truck driver, told KrebsOnSecurity that they lost more than $50,000 to the scam. Even after this significant loss, the fraudsters continued to contact them, claiming that their money was waiting and demanding further payments.

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Connections of cartels with fraud schemes

The FBI linked these fraud schemes to the use of timeshares in the Mexican Jalisco New Generation drug cartel. According to the July 2024 warning The FBI and the Financial Crimes Enforcement Networkthese scams are part of the cartel’s efforts to diversify its revenue streams and finance other criminal activities, including drug trafficking.

Since at least 2012, the cartel and other Mexican transnational criminal organizations have increasingly targeted American timeshare owners in Mexico, especially the elderly, who are often more vulnerable to such scams. The proceeds from these fraudulent activities not only support the cartel’s operations, but also facilitate the production and trafficking of dangerous substances such as fentanyl into the United States.

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How these scams work

The Jalisco New Generation Cartel (CJNG) has expanded its criminal activities beyond traditional drug trafficking to sophisticated fraud, including timeshare fraud, targeting unsuspecting individuals, including Americans. Here are some of the methods the cartel uses to run these scams:

Impersonating legal entities: Scammers often pose as legitimate real estate agents, escrow companies, or even officials from US government agencies such as the Treasury Department. This tactic is designed to instill a sense of trust and urgency in potential victims, making them more susceptible to fraud.

Targeting vulnerable population groups: The cartel primarily targets elderly Americans who own timeshares in Mexico. These individuals are often approached with offers to buy their timeshares at inflated prices, but must pay various fees, such as taxes or closing costs, before any transaction can be completed. Once these payments are made, the fraudsters disappear, leaving victims with significant financial losses.

Use of call centers: CJNG operates illegal call centers where employees, often unaware of the true nature of the cartel, participate in telemarketing schemes. These centers are strategically located in regions with high unemployment, creating a pool of workers who may be desperate for work. Call centers not only facilitate fraud, but also serve as a means for the cartel to control the local population through intimidation and violence.

Complex fraud schemes: Fraud can involve several levels of deception. For example, victims may be repeatedly contacted by different scammers posing as different professionals (such as lawyers or real estate agents) who claim they can help sell their timeshares or recover lost funds. Such re-victimization often leads to further financial exploitation.

Violence and intimidation: The cartel takes extreme measures to maintain control of its operations and silence potential whistleblowers. Reports suggest that workers who have tried to walk out of these call centers have faced dire consequences, including murder, sending a chilling signal to others who are about to leave their cartel jobs. This brutal enforcement mechanism not only protects their activities, but also instills fear in communities.

Digital infrastructure: CJNG uses a network of fraudulent websites and domains that appear to be legitimate at first glance. These websites often mimic real escrow companies and real estate firms, making it difficult for victims to recognize the authenticity of their interactions. Many of these domains were linked to a central hub that manages multiple fraud operations simultaneously.

By understanding these operational tactics, you will be able to better appreciate the complexities and dangers associated with fraud perpetrated by organized crime groups such as the Jalisco New Generation Cartel. This knowledge is critical to potentially preventing future victimization.

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Protect yourself from timeshare scams

In order not to become a victim of such scammers, it is extremely important to take preventive measures to protect your financial interests:

1) Check the identity of the buyer and the legality of the offer: Always verify the identity of the potential buyer and the authenticity of their offer. Contact the timeshare company directly to verify any claims made by the buyer.

2) Research any company that contacts you: Do your due diligence on any company that approaches you. Search for reviews, complaints and verify their credentials through trusted sources.

3) Be careful with advance commissions: Legitimate transactions usually do not require upfront fees for administrative or processing purposes. If the company demands such payments, be careful.

4) Use secure communication channels: Avoid sharing personal or financial information using unsecured methods, such as phone calls or emails. Choose secure communication channels whenever possible.

5) Do not click on links: Avoid clicking on any links or downloading attachments from unsolicited emails. Scammers often use this tactic to steal your personal information. The best way to protect yourself from malicious links that install malware, potentially accessing your personal information, is to install antivirus software on all your devices. This protection can also alert you to phishing emails and fraudulent ransomware, keeping your personal information and digital assets safe. Get my pick of the best 2024 antivirus winners for your Windows, Mac, Android, and iOS devices.

6) Consult professionals before proceeding with operations: Consult a real estate attorney or trusted financial advisor before entering into any transactions. Their experience can help you navigate potential pitfalls.

7) Report suspicious activity to authorities: If you suspect you have been the target of a timeshare scam, don’t hesitate to report it immediately to your local authorities, the FBI’s Internet Crime Complaint Center at ic3.gov, or the Federal Trade Commission. Reporting can help protect others from falling victim to similar schemes.

8) Invest in personal data removal services: While the advice provided is valuable, the most important step in protecting against such scams is to minimize your online presence. By reducing the amount of personal information available online, you make it much more difficult for fraudsters to target you. No service promises to remove all your data from the Internet. However, having a removal service is great if you want to constantly monitor and automate the process of removing your information from hundreds of sites continuously over a long period of time. Check out my best data removal services here.

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Kurt’s key takeaways

Here’s the deal. These timeshare scammers are smart, persistent, and backed by some very bad guys. But don’t let that scare you into inaction. Remember, knowledge is power. By staying informed and skeptical, you’re already one step ahead of these scammers. Trust your gut. If something is wrong, it probably is. And don’t be afraid to ask for help or report suspicious activity. Let’s make life much harder for these scammers and keep your hard-earned money where it belongs: in your pocket.

What additional steps do you think the government should take to combat telemarketing scams targeting vulnerable people? Let us know by writing to us at Cyberguy.com/Contact.

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