Treliant Takeaway…Joint Notice on Timeshare Fraud Associated with Mexico-based Transnational Criminal Organizations

FinCEN, OFAC, and FBI Joint Notice on Timeshare Fraud Associated with Mexico-Based Transnational Criminal Organizations

• Source: fincen.gov

Takeaway

The Financial Crimes Enforcement Network (FinCEN), Office of Foreign Assets Control (OFAC), and Federal Bureau of Investigation (FBI) have issued a joint notice warning financial institutions to be vigilant in detecting and reporting timeshare fraud schemes run by Mexico-based transnational criminal organizations (TCO). These schemes typically target older U.S. owners and the proceeds finance various criminal activities, including the trafficking of synthetic drugs.

Treliant can assist your organization in implementing robust compliance programs and training to effectively identify and mitigate the risks associated with such fraudulent activities.

Highlights

The notice highlights the increasing threat of timeshare fraud by organizations like the Jalisco New Generation Cartel, detailing how they exploit U.S. timeshare owners through sophisticated telemarketing scams. These schemes often involve false promises of timeshare sales, rentals, or investments, leading victims to make substantial payments for non-existent transactions. The notice provides financial institutions (FI) with red flag indicators and common fraudster strategies as well as urges FIs to report suspicious activities combatting the growing threat.

Red flags include:

• A customer is uncharacteristically wiring funds to Mexico, insisting they be sent immediately to timeshare brokers offering a significant financial opportunity.
• A customer is uncharacteristically wiring funds from retirement or trust accounts to Mexican financial institutions. These funds are either sent directly, transferred to personal checking/savings accounts at the same institution, or sent via wire transfer to a personal account held at another financial institution before being immediately wired to Mexico.
• A customer is sending multiple, structured, or repetitive wire transfers to Mexican financial institutions with the same memo line denoting timeshare “taxes” or “fees”.
• A customer uncharacteristically sends an unusual volume of wire transfers to Mexican banks or brokerage houses.
• A transaction counterparty is a recently registered (within the last six months) Mexican company in the timeshare, travel, real estate, or financial services industry with minimal online presence. The company or its beneficial owners could also be associated with consumer protection complaints or law enforcement sanctions/indictments.

Financial institutions bear responsibility for detecting, reporting, and preventing fraud such as the timeshare scheme. Failure in any of the aforementioned areas can lead to consequences such as regulatory fines, legal action, and reputational damage. With Treliant’s help, FIs can fight fraud, protect customers, and uphold the integrity of the financial system.