Puerto Vallarta News Today: Cartel-Linked Timeshare Fraud Targeting Americans

February 19, 2026 / 10:30 AM EST – A seemingly idyllic retreat in Puerto Vallarta, Mexico, is at the centre of a shocking fraud scheme allegedly orchestrated by the Cartel de Jalisco Nueva Generación (CJNG). Kovay Gardens, a boutique resort promising luxury and relaxation, is now under U.S. Treasury Department sanctions, accused of being a key component in a multi-million dollar operation preying on American tourists.

The Allure and the Deception

Kovay Gardens, marketed as a secluded paradise with private beaches, multiple pools, and upscale amenities, lured unsuspecting visitors with promises of luxurious vacations and lucrative rental income opportunities. However, U.S. officials claim this was merely a facade for a sophisticated fraud engine designed to drain the life savings of American citizens, particularly seniors.

How the Scam Worked

According to the U.S. Treasury, the CJNG has been consolidating control over timeshare scams in Puerto Vallarta and the surrounding Bahía de Banderas for over a decade. The operation at Kovay Gardens allegedly involved:

• Aggressive Sales Tactics: Prospective buyers were subjected to high-pressure sales pitches promising luxury and guaranteed returns.
• Credit Card Overcharges: Once contracts were signed, victims’ credit cards were allegedly overcharged.
• Data Harvesting: Customer data was reportedly funnelled directly to CJNG-run call centres.
• Secondary Scams: Victims were targeted with waves of additional investment scams, repeatedly exploiting the same individuals.
• Impersonation and Threats: Callers posing as lawyers or officials offered to recover lost funds for a fee, while others threatened fines or legal action to extract further payments.

This operation is described as a “vertically integrated fraud factory,” with the cartel controlling the resort, generating victims, and extracting payments through international wire transfers.

The Scale of the Fraud

Audias Flores Silva, a cartel commander, allegedly oversaw the timeshare fraud networks in Nayarit, with lieutenants collecting payments from call centres linked to Kovay Gardens. A U.S. alert issued in March 2023 has already flagged approximately $330 million in potentially fraudulent transactions, with roughly 40 suspicious activity reports being filed monthly. The FBI reports nearly $300 million in losses from 2019-2023, with an additional $50 million reported in 2024 alone. Officials believe these figures are significantly underreported due to victims’ fear and embarrassment.

CJNG’s Expanding Criminal Empire

These sanctions represent the latest U.S. effort to combat the CJNG’s diversification beyond narcotics trafficking. The cartel has expanded into fuel theft, extortion, and financial fraud, often disguising these operations behind legitimate-looking businesses. This case highlights the growing threat of cartel involvement in tourism-related scams and the need for increased vigilance among travellers.

For more information on travel safety and fraud prevention, visit the U.S. Department of State’s travel website and the FBI’s scams and safety page.

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