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OFAC sanctions timeshare fraud network

Financial Crimes Of Interest to Non-US Persons Department of Treasury OFAC OFAC Sanctions OFAC Designations Mexico SDN List

Financial Crimes

On March 2, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions, pursuant to Executive Order 14059, against eight Mexican companies connected to timeshare fraud on behalf of the Cartel de Jalisco Nueva Generacion (CJNG). The CJNG is also designated under E.O. 14059. OFAC described timeshare fraud typology, explaining that schemes often involve third-party scammers who claim to have ready buyers and make unsolicited purchase offers to timeshare owners. If these offers are accepted, the scammers ask timeshare owners to pay advance fees and taxes to “facilitate or expedite the sale with assurances of reimbursement upon closing.” However, timeshare owners, after making multiple payments, eventually realize that the offers do not exist and lose their money, OFAC said. In conjunction with the sanctions, OFAC issued an alert warning that perpetrators of timeshare fraud may falsely claim to represent OFAC to appear legitimate and further their fraud.

As a result of the sanctions, all property and interests in property of the designated persons located in the U.S. or held by U.S. persons is blocked and must be reported to OFAC. Further, “any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons unless authorized by an OFAC-issued general or specific license, or exempt. OFAC further warned that “U.S. persons may face civil or criminal penalties for violations of E.O. 14059 and the Kingpin Act.”