The US Department of the Treasury sanctioned a tourist complex in Puerto Vallarta and a business network linked to the Jalisco New Generation Cartel for involvement in timeshare frauds. The action targets five individuals and 17 companies in the Riviera Nayarit and Puerto Vallarta areas. Mexico's Financial Intelligence Unit blocked seven additional subjects and filed complaints for illicit operations.
On Thursday, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury designated Kovay Gardens, a timeshare complex in Puerto Vallarta, Jalisco, along with five individuals and 17 associated companies, for ties to the Jalisco New Generation Cartel (CJNG). The measure is based on Executive Orders 13224 and 14059, as part of an offensive against the cartel's funding sources, described by US authorities as a 'brutally violent terrorist organization' that has diversified its illicit income beyond drug trafficking.
The fraud scheme, operating since around 2012 in Puerto Vallarta and Bahía de Banderas, involved call centers contacting US owners to offer fake resales, rentals, or investments. Victims paid upfront fees and taxes to Mexican accounts, never recovering the funds. According to the FBI, between 2019 and 2023, about 6,000 victims reported losses nearing 300 million dollars; in 2024, 900 complaints were logged with over 50 million in losses, figures likely underestimating the total due to unreported cases.
Carlos Humberto Rivera, owner of Kovay Gardens (previously Vallarta Gardens), was identified as a central figure. The complex shared databases with CJNG-controlled call centers. Operations were overseen by Audías Flores Silva, with a five-million-dollar bounty for his capture. Sanctioned individuals include Oscar Enrique Jiménez Tapia, José Luis Gutiérrez Ochoa—with family ties to Nemesio Oseguera Cervantes, 'El Mencho'—, Jonathan Faustino Ríos González, and José Eduardo Palacios Rodríguez.
Treasury Secretary Scott Bessent stated: 'Whether through fentanyl trafficking across our borders or organizing timeshare frauds, drug terrorist cartels like the CJNG constantly victimize Americans for profit'.
In response, Mexico's Secretariat of Finance and Public Credit, through the Financial Intelligence Unit (UIF), added seven subjects—six individuals and one entity—to its Blocked Persons List. The UIF conducted financial analyses identifying resource flows, international transfers, and stakes in companies in western Mexico, filing complaints with the Attorney General's Office for operations with illicit proceeds. The investigation was coordinated with the National Security Task Force in New York, involving the FBI, DEA, IRS, and CBP.
