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A Mexican Drug Cartel Runs Time-Share Scam, Part 2

James becomes suspicious of his ‘real estate agents’

spinner image a room is balanced on top of a stack on money and is falling over

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spinner image infographic quote that reads: "There's layers and layers of sophistication and cover in what the cartel does. Their motivation is the result of millions of dollars being sent to their bank accounts every year."

In part 2, James is becoming suspicious of the people who are “helping” him sell his Lake Tahoe time-share. After several months of paying fees, he learns that he’s in the middle of a common, and dangerous, time-share resale scam. The people he thinks are real estate agents are actually members of a notorious Mexican cartel who have shifted their business from drug trafficking to the even more lucrative business of scams.

Full Transcript

(MUSIC INTRO)             

[00:00:01] Bob: This week on The Perfect Scam.

[00:00:03] Michael: James, you cannot hesitate anymore. We cannot hesitate.

[00:00:04] James: Okay, but, okay, listen...

[00:00:07] Michael: You're the one who's hesitating, James, and I understand you, you're skeptical. I, I understand, it's perfectly normal. This is the first time we have conducted a transaction like this and, and I can promise I, as soon as I get you your money back and I get you paid...


[00:00:26] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. This is part two of a 2-part episode. If you haven't listened to part one yet, you might want to go back and listen to that first. When we left James, he feels tantalizingly close to completing a real estate transaction trying to sell his timeshare in Lake Tahoe that he'd owned since the 1990s. But the company he's been working with has told him the buyer is in Mexico and there is a mountain of refundable fees that James has to pay. After months of back and forths, the payment never quite makes it across the border. James, he sent nearly $900,000 the other way and received nothing in exchange. So he calls a lawyer to get help. The lawyer tells him he's in the middle of a common timeshare resale scam and stop talking to these criminals. And then James takes a call from a New York Times reporter working on a story who tells James that well he's in the middle of something much bigger and much more dangerous than the sale of a timeshare. The people he thinks are real estate agents are actually members of a notorious Mexican crime gang. But James, James can still look on the web and see his money sitting in what he thinks is an escrow account, and so well he's not yet sure what to do. But he does record some of his phone calls with these agents and he's shared them with us. Here he's speaking with someone who goes by the name, Michael, and now James is starting to challenge the entire arrangement.


[00:02:01] James: Michael, I've already sent over $800,000 down there. I can't send anything else. There's got to be a way to get those funds cleared if they're in fact in a bank account, because I've got some serious doubts about everything that's been going on.

[00:02:14] Michael: I don't want you to doubt. I don't want you to have, even the tiniest doub--, doubt of on this, okay, because (sighs) it's a stressful situation, James. More than stressful, it's more than stress, and, and believe me, I, I understand where you're coming from. I understand that, you know, at this point feel...

[00:02:32] James: What, what would you do if you were in my position? What would you do at this point having essentially as from my perspective, I've lost over $800,000, and Mexico wants another $157,000 to supposedly release any funds to me. I, I don't get it. It, it makes absolutely no sense.

[00:02:50] Michael: I know exactly how you feel. I know, I know that, you know, you, you probably, you're, you're feeling like you lost your money. You have not lost a single penny.

[00:02:58] James: Yes, absolutely.

[00:02:59] Michael: Not a single penny. Okay, I know you have sent it. I have a confirmation of all the payments that you have processed. You know, I'm conscious of all that, but we, we have too much (inaudible) on that.

[00:03:09] James: Here, here's, yeah, here's...


[00:03:12] Bob: During this call, Michael goes into overdrive trying to reassure James.


[00:03:17] James: Now...

[00:03:18] Michael: I'll, I'll book a flight if, if necessary. I'll book a flight and I'll go personally meet you face-to-face. We'll talk about it. I mean if, if necessary I'll go.

[00:03:25] James: The, the uh,

[00:03:28] Michael: (sighs) I'm not going to Mexico. That, that, I'm telling you right now, I don't even want to go to Mexico.

[00:03:32] James: I, I don’t blame you.

[00:03:33] Michael: Just to see you, just to see you, just so...

[00:03:35] James: Well I've got a...

[00:03:36] Michael: Look, I want to clear your doubts because right now you're doubting and, and by you doubting, believe me that, and that hurts me, you know, from the bottom of my heart, it hurts me that you feel like you've lost your money and...

[00:03:45] James: Michael, Michael, here's what hurts me. Here's what hurts me. $800,000+ dollars.

[00:03:51] Michael: Of course, of course.

[00:03:53] James: That is no longer mine.


[00:03:55] Bob: And James decides he just has to throw in the towel. He's going to just ask for his money back and see what happens. But when James asks if he can cancel the whole transaction, well he's told there's a fee for that too. And the delays will be even longer.


[00:04:11] James: So you're saying that if, if uh, you, you cancel, or if I cancel this, uh, it will be months, but finally will be returned to me?

[00:04:23] Michael: Yes, but the thing is, you have a cancellation penalty. If you want to pay the cancellation pen--, it's a lot more money than, than, than what you're doing, and look, believe me, it's well, if, if you go through cancellation, whatever the cancellation is, I think it was like, uh, if I'm not mistaken was it $538,000 approximately? If you pay the $538,000 it's going to be a lot more cheaper, you're going to go ahead and, and, and claim back your money...

[00:04:48] James: Good Lord. Do I have to pay a cancellation upfront?

[00:04:52] Michael: Of course, the cancellation needs to start the process. The cancellation...

[00:04:56] James: I, I don't have a half a million dollars, I don't have a half a million dollars to ...

[00:05:00] Michael: I understand, that's why I'm telling you...

[00:05:02] Bob: But James, well James has already put pretty much all the money he has in the world into this transaction. He has nothing left, nothing to pay any cancellation fee. But Michael won't give up.


[00:05:14] James: None. I don't have any cash. I've got like $6,000 available to make a car payment and a house payment with.

[00:05:21] Michael: Shoot.

[00:05:22] James: And buy groceries. All of my money is in Mexico, Michael. That's what I've been telling you for a year.

[00:05:28] Michael: What about your stocks?

[00:05:29] James: I sold them. I sold all of my investments to send to Mexico. I've got no stocks. It's in freaking Mexico.


[00:05:40] Bob: At this point, James has already talked with lawyer Mike Finn. He specializes in getting consumers out of unwanted timeshare contracts. And Mike has told James the deal is bogus, a fraud. Mike has heard from many other victims with pretty much the same story, and that inspires James to do some more research. That escrow company, supposedly in New York with the website that shows his balance at nearly $900,000 now, well it might not be what it appears. James pulls up the address on Google street view.

[00:06:12] James: Well, based on the, the Google search at the street level that I did, I, I could see the building, and uh, the, the folks there at uh, that I spoke with at Commercial Escrow, they uh, claimed to have uh million dollar transactions going on all the time because of their commercial escrow situation, but something tells me that when you've got a, what looks to be a cleaners or something like that when you do a Google Map ground level search, it didn't come across as being a location that would be fit a company that claims to be this big, multimillion dollar business deals and the what have you, in the commercial realm.

[00:06:55] Bob: But for you to take that step, you, you, at that point you had some kind of creeping sense something was wrong, right?

[00:07:00] James: Oh yeah, yeah, just at this point this is just getting way out of hand.

[00:07:05] Bob: Do you remember the first moment where you had that feeling like, this feels wrong to me?

[00:07:09] James: I always in the back of my mind had a, a measure of doubt and that was planted ear--, very early on. However, it, when I thought about it, this thing with this Commercial Escrow Company, not even in the same state supposedly as the realty company or timeshare company that morphed into a real estate company, that gave me a measure of security as far as well, how could two different entities in different states be involved in the same thing?

[00:07:43] Bob: But the lawyer telling him, it's fraud, the New York Times reporter telling him it's organized crime, the Google street view and some other research he's done on the company's domain names, well it all adds up to a growing realization that James, well James will probably never get his money back.

[00:08:01] James: Adding everything up is between, it right around 850,000 and change.

[00:08:09] Bob: Oh my God, that's incredible. And where did most of that money come from?

[00:08:15] James: My uh, investments and savings.

[00:08:19] Bob: Do you have anything left?

[00:08:19] James: Not a whole lot, no.

[00:08:22] Bob: I'm so sorry, that's horrible.

[00:08:24] Bob: So James tells these criminals he's not sending any more money. But they don’t break things off without a fight. You might remember from the end of last episode that in addition to Michael, James has also been talking with someone who says his name is Jesus, and someone else who says his name is Bruce. Well Bruce said he'd gone down to Mexico to try to fix the transaction and he is now trapped there because authorities won't let him go without paying a fee. In this recorded call, Michael practically begs for James to help Bruce.


[00:08:56] Michael: You know what Bruce is thinking right now? That he did all this for you and that he did all this for nothing because at this point he told you that by the end of the month of February, he was going to get detained, and right now he's detained. He doesn't even have the privilege for a call. Right now I feel like I'm, like I'm letting my boss down, you know, and, and you, as my client, hey, we need to really put the pants down on and get things going you know because right now, James, you cannot hesitate anymore. We cannot hesitate.

[00:09:20] James: Okay, but, okay, listen...

[00:09:23] Michael: You're the one who's hesitating, James, and I understand you, you're skeptical. I, I understand, it's perfectly normal. This is the first time we have conducted a transaction like this and, and I can promise I, as soon as I get you your money back and I get you paid...


[00:09:37] Bob: But James finally draws the line.


[00:09:43] Bob: A few weeks go by and the crime gang continues to call James, but James have finally followed the lawyer's advice and ceased all contact.

[00:09:52] James: A few calls, probably 4 or 5 calls after I quit talking to them and they're answering the phone calls from both Mexico, the Jesus in Mexico, and Michael in Atlanta. They quit calling. I got an email from uh, Mexico, saying that, accusing me of not talking to them on the phone, not answering my phone when they call.

[00:10:15] Bob: Mike helps James report the crime to federal authorities, but they tell him there isn't much they can do. Unfortunately, for this veteran, this retired law enforcement official, a lot of damage has already been done.

[00:10:29] Bob: To some people a, a thousand dollars is a lot of money, to some people $1000 means hardly anything. You had more than $800,000 stolen from you. What does that amount mean to you?

[00:10:39] James: Well it means a lot. I mean it's, it's virtually uh, virtually all of the accumulated wealth that I had other than the property I'm currently sitting on. And that was accumulated over basically you know the past 50+ years.

[00:10:54] Bob: So 50 years of your hard work, including working for the freedom of America, all that work has been stolen by these criminals.

[00:11:02] James: Essentially. When you look at somebody's life and where they're at, and the things that they've had to do throughout that lifetime, you work to accumulate some things so that you can live comfortably after you retire. That was taken away, so...

[00:11:14] Bob: Somebody's life, taken away, stolen. Remember, James spent decades in the Reserves, decades in law enforcement. He served in Southeast Asia during the Vietnam era. It's all just so hard to hear. How did James end up getting mixed up with a Mexican cartel? How did the cartel get mixed up in this complicated, by very lucrative, timeshare scam industry? Well, timeshare scams actually have a long history. Remember, we told you last episode that about 10 million Americans have an interest in a timeshare, and many wish they didn't. But escaping timeshare contracts is hard. And the desperation many timeshare owners feel makes them vulnerable to criminals offering a way out. This crime of opportunity has been growing so fast that the FBI says timeshare sales fraud complaints are up 79% over the last four years. Timeshare owners have told the FBI that $288 million has been stolen from them in recent years, though underreporting means the real number could be four or five times that. But there's an even more sinister reason that complaints are up so much; freelance journalist, Steve Fisher, is back to explain the whole backstory.

[00:12:38] Steve Fisher: Well, it started in the early 1990s. People, fleeing fugitives of the law in the United States, and ex-pats in general from the United States, in the city of Puerto Vallarta and Jalisco, basically started these small scam businesses in which they had their own little call centers and they would call Americans, American senior citizens, and scam them out of money that these American citizens, well, they basically said, you have your timeshare and we have someone who would like to buy it. You paid $56,000 for it, and we can give you $75,000, and that's a bit of a dream, and they began to perfect that scam in which they said, we'll pay you this money but before we do that, we're going to have to, you know, there's some Mexican taxes and fees and things associated with this. All, of course, not true, but all sounding very official.

[00:13:31] Bob: The scam was successful that over time dangerous drug gangs began to take notice, especially in Jalisco. So they moved in, took over call center operations, sometimes violently, and began to professionalize the operations paying low-level workers decent wages, giving higher level workers a cut of the profits, building websites capable of mimicking financial firms, and at the same time, deploying terrifying tactics to keep everyone in line. We mentioned last episode that the bodies of some call center workers were found scattered around one facility recently; a gruesome reminder of what happens to anyone who tries to interfere with scam operations. The New York Times reported that some 30 call centers employees have disappeared since 2017. And the cartel does all this with relative impunity.

[00:14:23] Bob: No one's going to jail for this basically, right?

[00:14:25] Steve Fisher: Very few people. Some people have gone to jail. There was a case in Louisiana where some, one example, perhaps the most prominent example, where people are actually going to prison for it, but very, very, very few people have gone to prison. Part of the reason is because there are very few reports to, you know, say the FBI of this scam compared to how people are actually getting scammed because people are rather embarrassed. So when you have that cover as the cartel, and you just create shell companies and turn and burn them, the US Government officials say like the cartel will use an LLC for maybe 6 months and then create another one, it's, they have so many levels of cover, including the shame that people feel and then not reporting it to US Government officials that it's extremely difficult to identify and bring to justice these scammers.

[00:15:20] Bob: Compared to the dangerous business of drug running, timeshare fraud comes with a fraction of the risk.

[00:15:29] Bob: But the other thing is, uh, these criminals are, no one has to cross the border to deliver a package in order to do this, right, so all the criminals are, are in Mexico or somewhere else even, and that makes it very hard on US authorities, right?

[00:15:39] Steve Fisher: It makes it really difficult because certainly the US authorities, much as institutions like the Treasury Department, the FBI, seek to do what they can to identify these scammers, their jurisdiction is uh, doesn't particularly reach into Mexico. And here in Mexico it's, it doesn't seem to be particularly a top priority for the Mexican government taking down these individuals.

[00:16:03] Bob: In some cases, well government agencies don't seem interested in stopping the crime.

[00:16:10] Steve Fisher: Certainly the, you know, cartel government collusion is one thing and they can ensure that things continue perhaps peacefully in that way because the Mexican government, they may in some cases, I don't have evidence of this, but certainly government officials in Mexico being bought off is not a new thing.

[00:16:26] Bob: Meanwhile, as part of professionalizing the crime, the cartel employs workers who have better language skills and perhaps more education than traditional boiler room criminals.

[00:16:37] Bob: I've spent quite a while listening to some tapes that James provided me of the conversations that he had, and you know I've listened to a lot of these things, but I was absolutely astonished by several things; one was just how forceful and persuasive they were. I mean I felt like I was in a car dealership buying a car, honestly. And, and, and I would have been ready to give this person whatever I, I needed to to get them off the phone. But not only was their English very good, but their, their cultural references were spot on. So they're very, very talented, the callers.

[00:17:07] Steve Fisher: They're incredibly tal--, it's extraordinary. You know these call centers, uh, the employees the Jalisco cartel looks to bring into their call centers are people with almost perfect English accents, and the sophistication not only of how they engage uh the victims of the scam, is one that's extraordinary.

[00:17:28] Bob: It struck me that the callers, the call center workers I listened to must have, if not have lived in the US, at least spent extensive time in the US at some point in their lives.

[00:17:38] Steve Fisher: I think that's the only way it could happen, because even, I mean you know you have some, some great schools where you can learn English in Mexico and are taught by American teachers. I have friends, uh who have gone to those schools, and not their, their accent isn't even as good as these call center people's accents. I mean I don't know this, but I do believe it must people spent the majority of their life in the United States.

[00:18:02] Bob: The victim we've spoken with for this story talked often about how that alleged New York escrow company and his account balance there was the reason he kept believing there was light at the end of the tunnel. That he would eventually get his money back. That's a big part of the scam, Steve says, in a piece he wrote for USA Today recently, he wrote about a victim named Steven.

[00:18:14] Steve Fisher: Then their documentation, I mean they have in the case of my story in the individual that I reported about, they brought his case all the way to what they said was the supreme court of Mexico, and the documents appeared incredibly, like not, not incredibly... the documents appeared absolutely legitimate. I had to do my own uh research to investigate the court case number, and then realized that this case absolutely was nowhere to be found in the Mexican court system. But the documents were impressive, and especially to someone say in the United States who may not be particularly familiar with the Mexican judicial system, it's easy to see how all of this would seem perfectly legitimate. I mean there's layers and layers of sophistication and cover in what the Jalisco cartel does, all the way down to like actually names of say lawyers that actually exist at particular firms that actually exist or addresses that, you know, actually are to a particular office. They've thought this out very clearly and perhaps their motivation is the result is hundreds of millions of dollars in money being sent to their bank accounts every year.

[00:19:44] Bob: And they are incredibly persistent. So persistent that over years they stole nearly $1.8 million from the victim Steve interviewed. And the scale of the crime, it's just hard to get your head around.

[00:19:59] Steve Fisher: Yeah. I think in the case of the individual, Steven, that I profiled, what I could tell, you know, he had spoken to more than 150 people over the period of a decade.

[00:20:10] Bob: Oh my God.

[00:20:11] Steve Fisher: Re--, he built relationships with them. And he kept, he's a financial manager for his job, and he kept detailed, detailed records of the calls of every bank transfer and everything, and of, of the names of all the individuals that he spoke to. Certainly, we don't know if they're their real names, but he had all of this on record, and you could tell that he built extraordinary relationships with them. One person in particular, he knew, well, Steven certainly thought he knew a lot about this individual's family, where he'd come from, a divorce he had, he was going through, struggles that he had in his life, and this individual working for the Jalisco cartel, knew absolutely everything about Steven’s life, his financial situation, what, how many homes he had, where he lived, what struggles he was going through with his family. The struggles he was going through to find more money to send to this individual. And from my extensive conversations with Steven, I could tell that he was deeply fond of this individual. He cared for him very much, and he cared for his well-being, and he appreciated him very much as a person. And this individual had spoken to him now for years.

[00:21:26] Bob: Did you catch that? Over the course of years. About 150 different criminals contacted that victim, Steven. Only an incredibly organized operation could pull that off. Other parts of the organization are equally efficient. The cartels pick their targets carefully. They know victims like James and Steven own timeshares; they probably know they aren't being used either because cartel agents sometimes bribe timeshare facilities to get names of potential targets. But the cartel has an even more sinister way of picking their targets.

[00:22:02] Steve Fisher: The other part of this that is if it can be, you know, more devastating, I was told by US Government officials they, if they find a senior citizen with dementia, that they identify seniors that have dementia, those are gold mines, because they'll call them back every few months and just go through the very same scam again and again and again, and these individuals don't remember that they sent tens of thousands of dollars to Mexican bank accounts, and they do it again. And I was told that those are the prime targets for this cartel.

[00:22:34] Bob: The criminals know just what to say to keep that light at the end of the tunnel glowing, to make that final payment seem tantalizingly close. So tantalizing that Steve's victim called it an addiction.

[00:22:48] Bob: On such a deep level. Um, I just want to drill down for one more moment on the addiction part though, because there's sum cost problem here, right, with, with each request for a fee payment that comes up, the person who's the victim thinks, this is the one, oh this is the one, and you're deeper and deeper in it. And so I think that's where the word addiction comes from, right?

[00:23:03] Steve Fisher: Right, so the, yes, because with, with every payment, there's a promise of you getting your money, and in some cases perhaps getting even more money if you just pay just a little bit. You know so it's the matter of there's this kind of tantalizing carrot out there of getting everything back that you spent, plus, you know, the $60,000 you originally were promised say to purchase your timeshare. And yeah, there's this like, just one more, if you give just this little bit, there's just, there's this fee for the Fed Ex’d check because it's a, it's stopped at the border. It's almost there, it's almost to your address. That $60,000 will be in your hands tomorrow. All you have to do is just pay this thing, it's a Mexican fee, government fee. We're so sorry, you just have to pay this like $500 fee, $2000 fee, and your check will be released. And that's, they're basically telling people what they want to hear. And when you hear what, when someone tells you something that you really want to hear and that you imagine to be the truth, it creates, I think, even a greater level of addiction to continuing to feed into this thing which is precisely what you've wanted to hear. You wanted to be told this. And I think there's a level of addiction to that feeling.

[00:24:20] Bob: Yeah, sure.

[00:24:21] Bob: Steve also had a bit of a warning for James because in his story the cartel circled back with his victim years later. Steve's victim, Steven, told him...

[00:24:32] Steve Fisher: Over time, he started to catch on to this possibly being a scam. And so what they did is they dropped off for a while, a few months. And then someone called him and said, "Hey, we are with the Institute for Victim Representation in Mexico and we just raided a call center that was a total fraud, and we found your information and learned uh from all of the data in the hard drives that we seized, that you were a victim of an extraordinary scam. And we're here to help you. So here's how this is going to work. We have attorneys; we're going to bring your case to court and we are going to clear your name and return the money, all the money that you spent, but not only that, your name was used in other fraud cases. So all the money where, all the times where your name was used, Steven, you are owed the money that was, that was, people were scammed out of under your name." And it came to the amount of about, they said, $6 million. And this went all the way up to the Supreme Court of Mexico, they said, with attorneys and dozens of people working with him, helping in this case. The only thing is, they're not, remember this started out with about almost $75,000, right, and we're now at like $6 million being promised to him. You just have to pay a few fees, you know, but what is, what is $25,000 when you're going to have $6 million in your bank in a few days. And so they continued, and it was during the Supreme Court case uh again, fake Supreme Court case, that he spent, he sent hundreds of thousands of dollars. He'd spent, he sent more money in the final last three years leading up to December of last year, than he had in the entire previous 6 or 7 years.

[00:26:20] Bob: So the, it's no longer even really a timeshare scam at that point, it's something else.

[00:26:24] Steve Fisher: It evolves, and it, and that's what they do.

[00:26:28] Bob: And because the callers are all part of a cartel, a large organization with deep pockets, plenty of affiliates, it seems like they have all the time in the world.

[00:26:39] Steve Fisher: They wait for a while, and they're patient. The Jalisco cartel is very patient with these victims. They'll wait for a year sometimes for things to settle down and come back around, and it also speaks, I think, to the sophistication of their data records and keeping, that they have files on everyone. They know absolutely everything about them. And they'll come back around to them in a little while. And that often works.

[00:27:01] Bob: But James, he doesn't have all the time in the world. His life is now upside-down. Instead of a comfortable retirement, he's trying to figure out how he might supplement his income, get a part-time job all because he was just on the wrong end of the cartel's highly organized, highly sophisticated crime. With the benefit of hindsight and a chance to listen to those recorded calls a few times, there are a few things that James has now noticed about his interactions with the criminals, like the fast talk, and how he could never get a word in edgewise.

[00:27:35] James: I'd have to interrupt him to make a statement frequently, 'cause he was, he spent time justifying everything.

[00:27:42] Bob: That's really interesting, uh pops in, yeah, that feels a little bit like sitting at a car dealership to me.

[00:27:48] James: That would be a fairly accurate uh, description you might say.

[00:27:52] Bob: Or maybe a timeshare sales meeting.

[00:27:54] James: How about that? (laughs)

[00:27:56] Bob: They do, you know, right, they talk, I am not a person who can talk like that, so I'm kind of amazed at, at that skill, but yeah, he could just talk and talk until, and it's almost as if they don't want you to, to interrupt, right?

[00:28:06] James: Right, because I, in retrospect, I would say I just listened to some of the recordings I made and uh of these and, and I was taken that at the time you don't recognize it happening, but it's, you're, you're constantly sort of on, on the defensive trying to get at information when somebody is overloading you with more information.


[00:28:32] James: I'm trying to come up with uh the funds, but I'm, I've got to, the only way that I can do that, that I could see is a second mortgage on my house. And I've got to convince my wife and I spoke with Michael, he can explain to you...

[00:28:47] Bruce: Sorry to... sorry to interrupt you. The reason I've been trying to call Michael is because listen...

[00:28:54] Michael: And the (inaudible) was definitely going to get better.

[00:28:56] James: Uh, yeah, but uh...

[00:28:59] Michael: And that's literally, that's the goal, that's the goal here, okay? That's the goal here.

[00:29:03] James: Well I'll uh...

[00:29:03] Michael: I mean I want, I, I want to feel secure, I want you to feel secure. I want to feel happy getting home from work, you know, and at least knowing that we're able to do something positive in, in...

[00:29:14] James: I just talked to Michael. I just, I was on the phone with him when you called earlier, and I was trying to answer, but at any rate, he, he, he went to the hospital, he had some sort of thing, a stroke or a heart issue or something, but...

[00:29:27] Bruce: Do you remember, do you remember the time I told you, if you had your wife or someone call, and ask for your private banking information or, or try to gain access to your information, do you remember that?

[00:29:39] James: Uh, vaguely.

[00:29:41] Bruce: Okay. Let me tell you something. The (inaudible) executive bank account that I have for you, I have the power by Supreme Court Justice...

[00:29:53] Bob: That's interesting, that's really insightful actually. I mean we've all had that experience whether it's at a car dealership or at a timeshare sales or, or at a cellphone store for heaven's sake. I feel like this happens to me when I try to change a cellphone.

[00:30:05] James: (chuckles) Yeah. That, yeah, okay. It was, you know, it's obviously something that's taught in sales schools, you know it's, I'm, I'm sure there's a sales technique, you know, the art of the close or something like that, who knows.

[00:30:19] Bob: Right. Right, right.

[00:30:21] Bob: Last episode we told you that in addition to all the complexities around this timeshare sales scam, James had something else even more serious happening in his life. His wife had been diagnosed with cancer and was undergoing treatment. We're happy to report she's healthy now, but obviously this has something to do with all that the family has gone through.

[00:30:42] Bob: I don't know how you would separate out all the, you must have been worried sick about your wife while trying to deal with all this?

[00:30:49] James: Yeah.

[00:30:50] Bob: That had to have some impact on the choices you made, no?

[00:30:53] James: Yeah, I, I was doing everything I possibly could to end the misery. You know, and uh...

[00:31:02] Bob: End the misery? What do you mean?

[00:31:05] James: This, this was a miserable situation, and I, I spent a number of times with Michael saying, this, this has got to end. What, what the heck? Why isn't this ending? Well, Michael would just keep saying, "Well you just have to pay this, you just have to pay this." And uh, reiterate it so that uh, once again, Jesus was in on it too, obviously.

[00:31:31] Bob: Yeah. I can't imagine what it's like to try to process all this at the same time.

[00:31:36] James: Yeah, it's uh, kind of like juggling, you always got two balls in the air.

[00:31:41] Bob: Yeah, that's a lot in the air though. And I, something tells me that you're, you're not necessarily giving yourself enough sympathy for what you were trying to deal with all at, at once. This clearly had something to do with, with why this went so far.

[00:31:53] James: Yeah.

[00:31:55] Bob: You're beating yourself up pretty good, aren't you?

[00:31:57] James: Oh yeah, yeah, a lot of personal doubts have crept into my psyche, you might say.

[00:32:03] Bob: That, that's only natural. You probably know I talk to people, every week this is what I do, who have uh been through things just like this and they can't help but blame themselves, and they can't help but feel all those, all those doubts, um, but it happens to all kinds of people, and so what--, whatever degree I can give you some kind of relief. One expression I have heard uh that is pretty useful, we have this helpline called the Fraud Watch Network Helpline uh where if you're a victim of a crime you can call and there are experts who will talk to you. And it, it's actually, you know they, they offer practical advice, but they also offer some pretty good um, oh just, just a, just empathetic advice and one, one fellow always says that, that hammer that you're hitting yourself over the head with, you can go ahead and put that down now, you've done it enough.

[00:32:45] James: Yeah. (chuckles)

[00:32:47] Bob: I think that's pretty handy, so I, I'm giving you permission to put down the hammer.

[00:32:50] James: Okay. I appreciate that.

[00:32:53] Bob: And with more time to reflect on everything, James thinks the seeds of the scam he suffered actually were sown many years before he ever got the call from Michael.

[00:33:03] Bob: I'm so grateful that you're willing to talk about it, because I know it's hard. What do you want people to take away from hearing your story?

[00:33:08] James: Uh, if it were me, legitimate timeshares would probably be okay but don’t expect to be able to make money on it. You know it's just ... if I were, if I had to do this all over again, not necessarily knocking the timeshare industry, but I would likely not have purchased my first one.

[00:33:34] Bob: So you think the trouble began all the way back when you got your first timeshare.

[00:33:39] James: Well from my perspective, that kind of set the path for my wife and myself when, when we'd uh take these trips and what have you. They'd offer a timeshare opportunity to wherever we were staying, so we, we obviously ended up buying some more as well, and there's been no, no problem with them, but except ongoing expenses and the like. I would, I would ask people to really take a close look at what they expect to get out of uh, the timeshare.

[00:34:10] Bob: We met timeshare lawyer Mike Finn in the last episode. He was one of the first people James reached out to when he began to have doubts about his alleged sale. Mike was quite sure the cancer diagnosis played a big role in all that happened.

[00:34:25] Bob: And he didn't want to even talk about that as a factor, but how could it not be a factor?

[00:34:29] Mike Finn: Yes, yes. You know the man's just had so much on his mind, and what happens in these type of situations, and we do deal with, with other type of victimization, I think his wife's cancer put him in a category where he felt isolated and confused. Sometimes people are so desperate for somebody to talk to that they almost welcome these calls because these scammers are trained to stay on the line and talk about everything and anything. They find out who your family members are, they talk to you and in a way, I think you develop some, and I'm not a psychologist but every lawyer is an amateur psychologist, I think they develop a relationship with these people that makes it easier for them to extract money from them.

[00:35:13] Bob: So Mike has seen many, many scams like this during his career. Well, really his second career. As a lawyer who helps people get out from under oppressive timeshare relationships, Mike actually took the bar exam in Florida at age 65, he'd been a lawyer for decades in Michigan, just so he could more easily represent clients in Florida. But even for Mike, who's been hearing from timeshare resale victims for a long time, the call from the New York Times reporter linking Mexican cartels to the scam, that was a big surprise in a way.

[00:35:47] Bob: The, the numbers are astonishing, and I think it does begin to make sense from the reporting that Mexican drug cartel is involved. This is not a small-time operation. This is a big organization that's very sophisticated with a lot of resources. Well what do, was, was it surprising to you to find out that there was a connection to this big, uh Mexican drug gang?

[00:36:05] Mike Finn: Well, I only recently became aware of it. But as you're pointing out, Bob, it makes sense because they, it's become more sophisticated. The earlier cases were less sophisticated. There was the identity theft, stealing the broker's identity. Uh there was never a escrow company involved, then it became the attorney had an escrow account. So the scammers, before there was a Mexican cartel involved, became more and more sophisticated probably as, as their plots were more and more successful, and they became more sophisticated and developed their product to fool more people. You know it's, it's an evolution.

[00:36:45] Bob: And Mike has a built-in skepticism about timeshares in general.

[00:36:52] Bob: So James said something really interesting to me at the very end of our phone call when I asked him, what was the real starting point of all this? How did things go so sour? And he said, the day that he bought the timeshare.

[00:37:03] Mike Finn: That's right.

[00:37:04] Bob: And, and that set him on this road which put him at the mercy of the Mexican drug cartel, which is really hard for me to get my head around.

[00:37:12] Bob: So asked him, why does he think timeshares are such a bad deal?

[00:37:17] Mike Finn: Because they're worthless. And there's no resale market. And the developer will, in most cases, not want to and not agree to take back your interest.

[00:37:28] Bob: But I'm paying whatever, I'm paying $10,000 so that I can go on vacation for one week a year for the rest of my life. That seems like a, not such a terrible deal.

[00:37:36] Mike Finn: It's not such a terrible deal until you look at maintenance fees. The average maintenance fee now is $1300 and that's average. Most, well I can't say most of them are a lot more, but many of them are a lot more. You can go on a comparable vacation for a week at a comparable resort for $1300. So each and every year you're going to pay this maintenance fee whether you go or not. And you're going to pay what the market value is for your vacation, plus you've given, and it's not $10,000, it probably has a starting price closer to $25,000, that $25,000 is money, it's gone, Bob. It's gone. And at the end of 25 years when you've been a, a devoted customer and paid your maintenance fees dutifully for 25 years, and some years not even used your timeshare, they tell you that they're not going to take your interest back? And you ask me why a timeshare isn't a good deal?

[00:38:33] Bob: And so, people who are in a bad timeshare deal are vulnerable. But Mike isn't against the concept. And he says the timeshare market wasn't always like this.

[00:38:44] Mike Finn: At one time, timeshares weren't bad deals. Back in the '70s, you bought a piece of real estate. Now you buy a right to try to make a reservation. We haven't talked about this yet, but they switched their product. Years ago, their, you no longer get a deed. But they start out their presentation saying that they're going to give you a deed and then that you get baited and switched into a far better program for you, Mr. Vacation Experience. We have 70 resorts out there. How would you like to pick from any one of them and go at any point in time? You're not locked in to the same two weeks at the same little resort. How would you like to go to any one of our 70 resorts? And all you have to do is make a reservation. Oh, well I have to make a reservation anywhere I go, so that's not a problem. I'm not afraid to make a reservation. Yeah? Well try making a reservation after we take your money for a vacation club, and take away your deed which, by the way, had some value and we took it away so that we could pledge the resorts without having any other claims upon the property. How do you like those apples? And, and now you don't own anything. You have the supposed right to use it, but when you go to make a reservation, you're told it's 13 months before... will that be credit card? May I take your credit card information right now? I can rent that same damn room for next week, the same room you can't touch for 13 months. Don't get me started.

[00:40:13] Bob: There must be people who have timeshares at a place who then end up just buying a regular hotel room at the same place because they can't get a timeshare reservation.

[00:40:22] Mike Finn: Thank you. And, and I've talked to many of those people.

[00:40:25] Bob: Oh my God.

[00:40:27] Bob: Naturally, an entire industry has sprung up, the timeshare exit industry which claims to help people get out from under timeshare contracts. Unlike the Mexican cartel scam, these people aren't claiming to have a buyer for the timeshare, they just say they can get you out of your ongoing obligations. But these companies aren't all created equal. Their strategy might sound a lot like the debt cancellation industry. They tell clients to stop paying the maintenance fees and so on, and they'll help with the collection notices. This strategy isn't for the faint of heart, however.

[00:41:00] Mike Finn: They can't cut off the debt collection agencies for one thing. Only a licensed attorney can do that. They can't advise you that if you stop paying, which in my mind is the only way you can get their attention, and ultimately get a resolution from them, 'cause now they have a nonperforming asset, only an attorney can give that kind of advice. It's akin to being a bankruptcy attorney.

[00:41:25] Bob: Uh-hmm, uh-hmm.

[00:41:25] Mike Finn: Only an attorney can do that.

[00:41:27] Bob: This does sound very, very similar to the, the debt cancellation industry to me.

[00:41:31] Mike Finn: Yes. yes. So only an attorney can give that kind of advice. And believe me, we've been sued for giving that advice, and those cases have gone absolutely nowhere, because as attorneys, we are licensed to provide that advice.

[00:41:45] Bob: Mike wants listeners to know timeshare owners, and victims, can come from all walks of life.

[00:41:53] Mike Finn: I can tell you this; I, I've taken an in--, informal survey amongst my clientele because curiosity and, and it's not in any of the paperwork we have our clients fill out, the curiosity forces me to, to try to learn who my clients are, uh for that very reason, you know is it an educational gap, you know? Do we have people that aren't as educated that buy timeshares? Answer quite interestingly enough from my very informal uh nonstatistical survey, uh I have college professors, I have doctors. You may at least giggle at this next category; I have lawyers, I have, who have all bought timeshares and who have hired me.

[00:42:37] Bob: So as we often say here at The Perfect Scam, it's important to realize that anyone can get themselves into a bad deal and anyone can be the victim of a scam. Underestimating your risk is probably the biggest risk. But it's also a big risk to underestimate the organized crime gangs that are behind a lot of the scams we talk about on The Perfect Scam. Here's freelance journalist, Steve Fisher, again.

[00:43:03] Steve Fisher: Yeah, I think in general, as US and Mexican citizens, we might underestimate the Jalisco cartel or cartels like them. And by passing them off as perhaps just, you know, bumbling, unsophisticated individuals who just shoot AK-47s at random, we put ourselves in greater danger. The Jalisco cartel is able to adapt, the Jalisco cartel being practically a Fortune 500 business, and, and the amount of money that they bring in every year, is incredibly adept at adapting to, to whatever they need in their business, and shifting. I mean they do that, they learn that very well in drug traffic. If one trafficking route was shut down, they would go do, they would just shift to another; incredibly sophisticated. And in this way, with this scam, they do that so very well. Authorities, you know the Treasury Department had identified at least 40, I believe it was 40 LLCs, or businesses, associated with this scam in the Jalisco cartel. But the Jalisco cartel was well on to five steps down the road to the next LLC. They're so good at adapting. They're so adept. They're brilliant business people, and I think that is what we often miss and underestimate them for, and I think that is why they get away with what they do because we never really fully comprehend just how sophisticated they actually are.

[00:44:45] Bob: For The Perfect Scam, I'm Bob Sullivan.


[00:44:54] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Our email address at The Perfect Scam is:, and we want to hear from you. If you've been the victim of a scam or you know someone who has, and you'd like us to tell their story, write to us. That address again is: Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Becky Dodson; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.



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