Achi news desk-
The phone calls came almost every day. Lawyers, real estate agents and cash-strapped people are all looking to buy Rod Pratt and Diana Paquette’s Mexican timeshare at a handsome price.
It seemed like a blessing for the Edmonton couple. On their first trip to Mexico, for a wedding in 2016, they made a snap decision to invest in beachfront property in Nuevo Vallarta, on the Pacific coast, just north of the resort town of Puerto Vallarta.
But nothing was as it seemed. Even after spending US$95,000 on the timeshare and three upgrades, there were room charges, maintenance fees, food, drink and airfare bills – meaning a week’s vacation still costs $5,000 or more . An amount they could not afford.
“Anything you look at and touch, there’s a dollar tag on it,” said Pratt, 65. “It’s definitely not all-inclusive.”
By spring 2019, they were desperate to offload the timeshare. So when an Atlanta broker cold-called and said he had a client willing to pay US$155,000, Pratt pounced. A real estate agent from Mexico and a buyer joined the conversation, and a contract was signed. All it took to seal the deal was a few upfront payments from Pratt.
“They have, like, these fees and stuff that they wanted for opening and closing… all kinds of little ones,” he said. “Anywhere from maybe $1,500 US to $10,000.”
The supposed deal ended when Pratt decided to pay as much as $30,000 US for “taxes.”
But soon, his phone was ringing again with other lucrative offers. Over the next three years, Pratt entered into two more sales agreements, and accepted a short-term rental offer. All the alleged deals followed the same pattern — demands in advance for fees, costs and taxes, with the promised payment always one step away. In the end, he estimates he lost more than $200,000 Cdn to the scams.
“They all said they were lawyers, realtors. They were everything under the sun,” Pratt said. “But none of it was legal.”
A very violent story
The Jalisco New Generation Cartel (known by its Spanish initials CJNG) has only existed for 15 years, but yet is one of Mexico’s largest and most powerful criminal organizations. It operates in at least 27 of the country’s 32 states, with connections around the world. His home is Puerto Vallarta.
During its highly violent history, the group has expanded its activities from drug production and trafficking, to kidnapping and extortion, to less predictable turf. like the avocado trade and, more recently, timeshare scams.
The cartel “generates significant revenue for its multifaceted criminal enterprise through its timeshare fraud network,” US Treasury Secretary Janet Yellen warned last November.
“CJNG uses extreme violence and threats to control the time-sharing network, which often targets senior US citizens and can defraud victims of their life savings.”
Any doubts about Jalisco’s new focus on timeshares were put to rest by a gruesome massacre in May 2023, when authorities recovered the remains of eight young call center workers wrapped in garbage bags from a canyon near Zapopan, Mexico.
The call center was one of several used by the cartel for real estate fraud, officials said. The six men and two women reportedly upset the cartel by trying to quit.
No one is sure how much CJNG earns from its timeshare scam; just as it is not known for certain whether the cartel was behind the false offers made to Pratt. The FBI says it received more than 600 complaints related to such scams in 2022, with losses of almost $40 million US. But other estimates run into the hundreds of millions each year – targeting Americans and Canadians who own timeshares in Cancun, Acapulco and Puerto Vallarta.
Jalisco’s diversification is a measure of its success, said Valentin Pereda, a University of Montreal criminologist who studies Mexican gangs.
“When a cartel is successful, the number of workers in its ranks increases and the more workers you have, the more money you need to pay them and keep them loyal to you,” he said. “At the end of the day, these are business enterprises and they operate primarily with that logic, thinking ‘How am I going to maximize income and minimize costs?'”
Having a wide variety of criminal and legitimate business interests also helps to insulate the cartel from the economic disruption of police crackdowns, or drops in the price of street drugs.
Pereda says timeshare scams may be particularly attractive because they are unlikely to cause serious blowback from the US or Canadian governments. Several gang members and businesses have been punished for the fraud, but no one is forming a task force to tackle the problem. “It would be one of a number of competing priorities in terms of the cartels and criminal activity,” he said.
A sophisticated scam
On one level the timeshare scam is familiar – with victims being forced to advance money on the promise of a big payday, throwing good money after bad. But where is the Jalisco scam different princes of Nigeriaor inheritances from long lost relatives, in the back story.
The cartel has set up fake websites for US lawyers and brokers, and provides official forms and contracts. And once the victim has clicked in, there are even follow-up calls from alleged investigators, offering to help recover the money.
Guillermo Cruz – a Toronto lawyer, licensed to practice in Ontario and Mexico – receives five to 10 calls a month from victims of a timeshare scam, trying to recover their lost payments.
“The number of cases is increasing,” he said.
The documentation provided by the cartel may appear convincing, Cruz said.
“I think it’s quite sophisticated. Unless you have a background in Mexican law and are familiar with timeshare law in Mexico, it is very likely that you would believe the information provided to be correct,” he said.
Pratt shared more than 60 pages of documentation with CBS News, detailing the alleged purchase and rental offers he received. They list half a dozen different corporate entities in Mexico, and several supposed brokers and lawyers in the United States, along with names, signatures, addresses and phone numbers.
Several of the companies appear in online database information gathered from other timeshare fraud cases. Websites are still active for at least two of the companies.
A lawyer who claimed to be practicing in New York City, with offices in a ritzy Manhattan skyscraper, does not appear in state licensing records. (Although there are three legitimate lawyers with the same name in the United States, none of them deal with Mexican real estate or timeshares.)
A reputed El Paso real estate broker claims to be operating out of a historic downtown building currently being redeveloped into a hotel.
Cruz went through Pratt’s documents and selected a supposed tax return related to the 2019 proposal, which has the seal of the previous Mexican administration; a small but significant red flag.
Cruz says the US and Canadian governments need to put more pressure on Mexican authorities to crack down on the fraud, and create easier ways for timeshare owners to verify that offers are legitimate.
If such measures arrive, they will already be too late for Rod Pratt and Diana Paquette.
The couple have been busy packing up their home in Edmonton, preparing to move and heading for a divorce.
“All I was really trying to do was get some money back for my wife and for my life,” Pratt said, tearing up.
“I would gladly trade the trips to Mexico for a life back,” he said. “I wish we had never gone to Mexico.”
Jonathon Gatehouse can be contacted by email at [email protected], or can be reached via the CBC’s digitally encrypted Securedrop system at https://www.cbc.ca/securedrop/
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