In a decisive move against one of the most powerful drug trafficking organizations in Mexico, the United States has intensified its efforts to dismantle the Jalisco New Generation Cartel (CJNG). This action is part of a broader strategy that also targets the cartel’s rival, the Sinaloa Cartel. For the past year and a half, U.S. authorities have concentrated on curbing the activities of what they consider the primary entities responsible for the trafficking of fentanyl, a potent drug linked to over 107,000 overdose deaths in 2022.
The U.S. Treasury Department has accused CJNG of not only facilitating a significant portion of the illegal entry of fentanyl into the United States but also of orchestrating a complex fraud and money laundering scheme that has defrauded approximately 6,000 American victims. Just seven months ago, U.S. authorities sanctioned a dozen Mexican companies in an attempt to weaken the cartel by targeting their financial infrastructure, particularly those involved in real estate scams.
Focus on Timeshare Scams
This week, U.S. authorities shifted their focus to timeshare scams, a type of vacation rental often co-owned and used by individuals for limited periods each year. An FBI investigation revealed that CJNG received information from workers at Mexican vacation resorts about American owners of these properties. Armed with this data, call center operators would contact these owners, posing as lawyers, sales representatives, or real estate agents. The fraudulent narratives varied, but typically involved promises to buy or rent the properties, contingent upon the payment of taxes or fees, which were purportedly refundable.
The deception often extended further, with fraudsters sometimes posing as law firms offering to defend the victims, only to defraud them again. In some cases, victims were targeted multiple times, with call center operators even impersonating officials from Mexican and American governments investigating the fraud. The illicit proceeds were funneled into Mexican bank accounts opened by shell companies, eventually enriching drug traffickers or funding luxurious properties and future fraud schemes. This activity was particularly prevalent in tourist destinations like Puerto Vallarta.
U.S. authorities estimate that this fraudulent mechanism generated at least $300 million for the criminal organization.
Escalation of Sanctions
The latest round of sanctions targets three Mexican accountants and four companies, as part of the ongoing efforts to stifle the financial operations of drug cartels. Similar measures have previously been implemented against the Sinaloa Cartel, particularly the Los Chapitos faction. “Countering the CJNG and other transnational criminal organizations based in Mexico is one of the top priorities of the U.S. government,” stated the Treasury Department in a recent document. These sanctions are a continuation of a series of economic and financial punishments against CJNG.
In November, the Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned three Mexicans and 13 companies linked to timeshare fraud. By June 2023, two senior cartel officials faced sanctions for arms and drug trafficking and participating in fuel theft, known as huachicoleo, a lucrative criminal enterprise for these organizations. “The CJNG relies on a network of criminal activity that ultimately strengthens its ability to traffic fentanyl and other deadly drugs into the United States,” OFAC noted.
Sentences have also begun to be handed down. In April, 12 members of CJNG were convicted in the United States for conspiring to traffic methamphetamines.
The Tragic Revelation of Call Centers
The issue of fraudulent call centers came to the forefront following the tragic disappearance of five young men in Lagos de Moreno, Jalisco. A video later emerged showing one of the boys being forced to murder his friends under the orders of criminals, shocking the nation with its brutality. It was later revealed that two of the young men had sought employment and had been in contact with a person linked to a CJNG-run call center two days before their disappearance. Despite the public outcry, the investigation has seen little progress nearly a year after the incident.
As the U.S. continues to tighten the net on CJNG, the hope is that these measures will not only disrupt the cartel’s operations but also bring justice to the many victims of their extensive criminal network.