US Escalates Pressure Against Mexican Cartels

The US government announced two major sanctions and related actions against Mexican cartels, first targeting their involvement in timeshare fraud, followed by a broader crackdown on other revenue sources the next day. Together, the successive actions illustrate the Trump Administration’s stated intent to eradicate cartel funding pipelines wherever they emerge.

On August 13, 2025, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury (Treasury) and the US Department of State (State) announced the designations of four Mexican individuals and 13 companies involved in timeshare scams orchestrated by the Cartel de Jalisco Nueva Generacion (CJNG) in Puerto Vallarta. These scams target victims – often US retirees – by tricking them into wiring “taxes” or “fees” for illusory transactions (like the sale of their timeshare) that never close. The move was coordinated with the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration, and the Unidad de Inteligencia Financiera, Mexico’s financial intelligence unit.

Then, on August 14, 2025, in a coordinated follow-up, OFAC, State, and the Department of Justice (DOJ) announced a second round of sanctions targeting broader revenue streams of Mexican transnational criminal organizations – specifically, Carteles Unidos (United Cartels) and its offshoot, Los Viagras. Treasury Secretary Scott Bessent stated the “sanctions action draws further attention to the diverse, insidious ways the cartels engage in violent activities and exploit otherwise legitimate commerce.”

Both sets of actions follow Executive Order 14157 (EO), issued by President Donald Trump on his first day back in office, directing federal authorities to pursue the “total elimination” of certain international drug cartels that have “engaged in a campaign of violence and terror.” As discussed in our prior alert, in February 2025, the Secretary of State designated CJNG – along with seven other Latin American cartels – as Foreign Terrorist Organizations (FTOs) under Section 219 of the Immigration and Nationality Act (INA) and as Specially Designated Global Terrorists (SDGTs) under EO 13224.

Timeshare fraud designations

The August 13, 2025, designation sanctions four Mexican individuals and 13 Mexican companies. The individuals are:

1. Julio Cesar Montero Pinzon
2. Carlos Andres Rivera Varela
3. Francisco Javier Gudino Haro
4. Michael Ibarra Diaz Jr. (Ibarra)

Of these, only Ibarra had not been previously sanctioned under other US sanctions authorities.

The 13 newly designated companies – none of which had been previously sanctioned – span timeshare, real estate, tour operator, automotive services, and accounting businesses reportedly linked to Ibarra’s network. These entities are:

1. Akali Realtors
2. Centro Mediador De La Costa, S.A. de C.V.
3. Corporativo Integral De La Costa, S.A. de C.V.
4. Corporativo Costa Norte, S.A. de C.V.
5. Sunmex Travel, S. de R.L. De C.V.
6. TTR Go, S.A. de C.V.
7. Inmobiliaria Integral Del Puerto, S.A. de C.V
8. KVY Bucerias, S.A. de C.V.
9. Servicios Inmobiliarios Ibadi, S.A. de C.V.
10. Fishing Are Us, S. De R.L. de C.V.
11. Santamaria Cruise, S. de R.L. de C.V.
12. Laminado Profesional Automotriz Elte, S.A. de C.V.
13. Consultorias Profesionales Almida, S.A. de C.V.

Expanded enforcement actions target broader cartel revenue streams

In a coordinated follow-up, the US government announced a second wave of actions targeting alternative revenue streams of Mexican transnational criminal organizations, announced on August 14, 2025.

OFAC designated two additional cartels – United Cartels and Los Viagras – together with seven of their senior lieutenants, under both EO 14059 and EO 13224. State had previously designated United Cartels as an FTO and SDGT on February 20, 2025; Los Viagras had not been named in prior designations. The newly sanctioned individuals are:

1. Juan Jose Farias Alvarez
2. Luis Enrique Barragan Chavez
3. Alfonso Fernandez Magallon
4. Edgar Valeriano Orozco Cabadas
5. Nicolas Sierra Santana
6. Heladio Cisneros Flores
7. César Alejandro Sepulveda Arellano

Simultaneously, DOJ unsealed indictments against five principal leaders of United Cartels, charging them with large-scale fentanyl, methamphetamine, and cocaine conspiracies, firearms offenses, and terrorist activity. State announced up to USD26 million in Narcotics Rewards Program bounties for their capture.

The August 14 announcements emphasize the cartels’ diversification into extortion of Mexico’s avocado and citrus industries, land seizures, illegal logging, and the recruitment of foreign mercenaries – highlighting a US enforcement strategy that reaches beyond narcotics trafficking.

Updating and strengthening compliance controls is key

As a result of both sets of actions, all property (and interests in property) in the US or in the possession or control of US persons of the newly designated persons are blocked. In addition, under OFAC’s 50 Percent Rule, any entities owned – directly or indirectly, individually, or in the aggregate – 50 percent or more by one or more blocked persons are also considered blocked. US persons must report any holdings of blocked property (and interests in property) to OFAC within ten business days. OFAC also warned foreign financial institutions of the possibility of secondary sanctions for engaging in certain transactions involving the newly designated individuals and companies.

Taken together, the successive actions illustrate the Trump Administration’s stated intent to eradicate cartel funding pipelines wherever they emerge: from resort-town fraud targeting elderly Americans, to agricultural extortion and illicit logging that destabilize critical supply chains. Both tranches rely on largely overlapping sanctions authorities (EO 14059 and EO 13224), caution foreign financial institutions of potential secondary-sanctions exposure, and underscore the expectation that US and non-US businesses adjust screening and due diligence protocols to detect an increasingly wide spectrum of cartel-linked activity.

Firms with exposure to Mexico’s real estate, tourism, agriculture, or trade sectors may interpret the two-day enforcement actions as part of a broader campaign – and may consider evaluating sanctions, anti-money laundering (AML), and fraud-monitoring controls accordingly.

Implications under the FinCEN Timeshare Fraud Notice

The actions announced on August 13 and 14 serve as a reminder to financial institutions and businesses with connections to Mexico’s economy to consider revisiting their sanctions-screening, transaction-monitoring, and customer due diligence protocols. A starting point is the joint notice on timeshare fraud associated with Mexican criminal organizations (FinCEN Timeshare Fraud Notice), published in 2024 by Treasury’s Financial Crimes Enforcement Network (FinCEN), together with OFAC and the FBI.

The FinCEN Timeshare Fraud Notice provides a description of transaction red flags and notes how CJNG and other criminal organizations use these frauds to “diversify their revenue streams and finance other criminal activities, including the manufacturing and trafficking of illicit fentanyl and other deadly synthetic drugs.”

Among other indicators, the FinCEN Timeshare Fraud Notice outlines ten red flags:

1. A customer uncharacteristically wires funds to Mexico and insists they be sent immediately to timeshare brokers to pay “taxes” or “fees” at the risk of losing an urgent financial opportunity
2. A customer uncharacteristically sends international wire transfers from retirement accounts or trust accounts to Mexican financial institutions, either directly, via personal accounts, or through an internal transfer within their financial institution, or by a wire transfer to their accounts held at another financial institution – then immediately wiring the funds to Mexico
3. A customer sends multiple, structured, or repetitive wire transfers to Mexican financial institutions with the same memo line denoting “taxes” or “fees” regarding a timeshare
4. A customer suddenly begins sending an unusual volume of wire transfers to Mexican banks or brokerage houses, despite no previous related transaction activity
5. A counterparty in a transaction is a new, recently formed, or registered Mexican company in the timeshare, travel, real estate, or financial services industries with minimal to no online presence
6. A counterparty in a transaction is a new, recently formed, or registered Mexican company that has indicators of being a shell company used for illicit activity
7. A counterparty in a transaction is a new, recently formed, or registered Mexican company with an account opened within the previous six months at a Mexican bank or brokerage house
8. A counterparty in a transaction is a new, recently formed, or registered Mexican company that is receiving repeated – or an unusual volume of – wire transfers from US personal bank accounts, retirement accounts, or trust accounts with memo lines describing “taxes” or “fees” regarding timeshares in Mexico
9. A counterparty in a transaction is a new, recently formed, or registered Mexican company that appears to do business in the timeshare industry, but has previously done business as a company whose name is associated with complaints by consumer protection and law enforcement agencies
10. A counterparty in a transaction is a Mexican company whose beneficial owners are associated with timeshare fraud, drug-related DOJ indictments, or OFAC designations

The FinCEN Timeshare Fraud Notice requests that financial institutions indicate a connection between any suspicious activity being reported and the activities highlighted in the notice by using the key term “FIN 2024-NTC2” in SAR field 2 (Filing Institution Note to FinCEN), as well as in the narrative.

Conclusion

Companies with exposure to Mexico – or that bank, insure, or invest in firms active there – should be aware that the scope of sanctions enforcement may continue to evolve. The latest designations underscore the US government’s increasing reliance on sanctions, AML enforcement, and related trade- and customs-law authorities to disrupt cartel finance beyond traditional narcotics-trafficking channels.

Entities with exposure to Mexican energy, labor migration, resort, or real estate sectors may find that OFAC and allied agencies will continue to identify and target revenue streams exploited by the cartels and other transnational criminal organizations. Robust sanctions screening, vigilance for FinCEN red-flag indicators, and prompt engagement with counsel remain key to mitigating enforcement and reputational risks.

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