Kovay Gardens, billed as a secluded Pacific coast retreat in Nayarit, Mexico, promises guests luxury amenities including private beach access, four swimming pools overlooking the ocean, and beds made with Egyptian cotton. Room service, buffet breakfasts, and airport shuttle services are available. But for U.S. officials, behind the scenes is a fraudulent scheme run by the Cartel de Jalisco Nueva Generación (CJNG), draining millions from unsuspecting visitors.
The U.S. Treasury Department sanctioned Kovay Gardens on Thursday, accusing it of operating under CJNG’s direction and part of an extensive network involved in defrauding American citizens. Over the past decade, the cartel has controlled timeshare scams in Puerto Vallarta and surrounding regions like Nayarit, targeting tens of thousands of U.S. tourists annually.
Official statements reveal a vertically integrated fraud factory within Kovay Gardens, with prospective buyers misled by promises of luxury properties that generate rental income. Once contracts are signed, the resort allegedly overcharged credit cards and fed customer data into call centers run by CJNG members, repeatedly targeting victims. After initial losses, scammers contacted Americans claiming to be lawyers or officials who demanded additional fees for help recovery, while others threatened legal repercussions unless paid.
Over a decade of operation under CJNG’s control has seen Kovay Gardens generate victims for database targets directed at boiler-room call centers. In addition to timeshare scams, the cartel expanded into fuel theft and extortion, often masking fraudulent activities behind legitimate-looking businesses.
This week’s sanctions represent the latest U.S. action against CJNG’s diversified criminal activities beyond narcotics. Amidst a growing number of suspicious activity reports highlighting potential fraud in Nayarit-based timeshare schemes, these actions underscore the extent to which these criminal networks are targeting American tourists and seeking to launder money through legitimate enterprises.