The U.S. Treasury Department has sanctioned a network of timeshare fraud operations linked to the Jalisco New Generation Cartel (CJNG), identifying eight key individuals and 17 businesses allegedly involved in defrauding U.S. And Canadian citizens through the Kovay Gardens resort in La Cruz de Huanacaxtle, Nayarit, Mexico.
The Office of Foreign Assets Control (OFAC) announced the sanctions, stating that the network obtained personal information from American property owners through corrupt employees and engaged in fraudulent schemes including fictitious sales, advance commission charges, identity theft, and revictimization tactics. The FBI estimates victims, many of whom are elderly, have suffered losses exceeding $300 million between 2019 and 2023.
Kovay Gardens serves as a central hub for these operations, according to the Treasury Department, channeling funds to the criminal organization. The sanctions block all property and interests in property of those designated that are subject to U.S. Jurisdiction, and prohibit U.S. Persons from engaging in transactions with them.
Alongside Kovay Gardens, the sanctions target a range of Mexican companies operating in tourism, real estate, finance, and business services. These include Administradora y Comercializadora del Mar, S.A. De C.V. (hotel reservation processing); Asesoría y Servicios Importadores, S.A. De C.V. (business services); Corporativo Controlador Explora, S.A. De C.V. (holding company); Solugas Soluciones en Gasolineras, S.A. De C.V. (fuel); Punto 54, S.A. De C.V. And High Land Park, S.A. De C.V. (both tourism); Colinas Proyectos y Construcciones, S.A. De C.V., Ornitorrinco Inmobiliaria, S.A. De C.V., VG Desarrollos De La Bahía, S.A. De C.V., and Deep Blue Desarrollos, S. De R.L. De C.V. And Deep Blue Servicios, S.A. De C.V. And Estrategia PVR, S. De R.L. De C.V. And Reef Administración Avanzada, S. De R.L. De C.V. (all real estate/financial services); Hotel Management International, LLC (a Texas-based entity); Club Deportivo de Formación al Futbol GMX, S. De R.L. De C.V.; Constructora Palacios PV, S.A. De C.V.; and Agencia de Servicios Turísticos Internacionales G8, S.A. De C.V. And Corporativo de Transferencias Internacionales de Bienes Raíces, S.A. De C.V.
The individuals sanctioned include Carlos Humberto Rivera Miramontes, identified as the founder and administrator of Kovay Gardens; Oscar Enrique Jiménez Tapia (“El Tagayas”), described as an operational leader in Bucerías, Nayarit; José Luis Gutiérrez Ochoa (“El Tolín”), a regional operator for the CJNG in Nayarit; Jonathan Faustino Ríos González (“Johnny Hood”), who allegedly operates call centers used in the fraud; and José Eduardo Palacios Rodríguez, who also operates fraud centers and manages sanctioned real estate companies. Additionally sanctioned were Nemesio Oseguera Cervantes (“El Mencho”), the leader of CJNG; Audias Flores Silva (“El Jardinero”), a key CJNG operator; and Michael Ibarra Díaz, Jr., a partner of Rivera Miramontes.
According to the Treasury Department, El Mencho has consolidated a criminal structure with a presence in over 40 countries and a financial network including investments in tourism and real estate. Flores Silva, known as “El Jardinero,” is described as a dangerous operator involved in drug trafficking and money laundering. Rivera Miramontes allegedly facilitated the fraudulent sale of timeshares, sharing customer databases with CJNG-controlled call centers. Ibarra Díaz is accused of assisting in the capture of tourists and diverting funds to the cartel.
El Tagayas is reportedly responsible for kidnappings, extortion, and killings in the Bahia de Banderas area, even as El Tolín oversees the collection of funds from illicit activities and coordinates drug laboratories. Johnny Hood and José Eduardo Palacios Rodríguez are alleged to operate call centers used to contact victims and execute fraudulent schemes.
The OFAC action includes the blocking of assets and prohibits transactions with the designated individuals and entities. Any entity owned 50% or more, directly or indirectly, by a sanctioned party is also automatically blocked.
