Puerto Vallarta-area timeshare was a cartel-run fraud engine, Treasury Department says
CBSN
Kovay Gardens sells itself as a secluded retreat on Mexico's Pacific coast: a private beach along the Bahía de Banderas, four pools spilling toward the ocean and beds dressed in Egyptian cotton. Guests are promised room service, buffet breakfasts and airport shuttles to the boutique resort outside Puerto Vallarta.
Kovay Gardens sells itself as a secluded retreat on Mexico's Pacific coast: a private beach along the Bahía de Banderas, four pools spilling toward the ocean and beds dressed in Egyptian cotton. Guests are promised room service, buffet breakfasts and airport shuttles to the boutique resort outside Puerto Vallarta.
But U.S. officials say that behind the 22-room beachfront timeshare is a cartel-run fraud engine that has drained millions from American visitors.
The U.S. Treasury Department on Thursday sanctioned Kovay Gardens, accusing the resort in Nayarit of operating under the direction of the Cartel de Jalisco Nueva Generación, or CJNG. The move also targeted an entire network of people and companies the federal government says worked with the cartel to defraud U.S. citizens, including many older American victims who lost life savings to the schemes.
For more than a decade, CJNG consolidated control over timeshare scams in Puerto Vallarta and the surrounding Bahía de Banderas, according to the U.S. Treasury, expanding influence in a region spanning Jalisco and Nayarit and drawing tens of thousands of U.S. tourists annually.
Officials say that at Kovay Gardens, prospective buyers were lured into sales pitches that promised luxury and vowing unused weeks could generate even more in rental income. Once owners signed contracts, the resort allegedly overcharged credit cards, feeding customer data directly into CJNG-run call centers that launched waves of additional investment scams, allowing the cartel to profit repeatedly from the same victims. After initial losses, Americans were contacted again by callers posing as lawyers or officials who then claimed they could help recover the money for yet another fee, while others were threatened with fines or legal trouble unless they paid, officials say.
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