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How One Family Lost $900,000 in a Timeshare Scam

By The New York Times

Discover a cautionary tale on The Daily, as speakers Scammer, Scam victim, Katrin Bennhold, and Maria Abi-Habib delve into the alarming world of timeshare fraud, which primarily preys on America's elderly population. The episode centers around the story of James, a retired law enforcement officer who was duped into transferring $900,000 through a sophisticated scam orchestrated by Worry Free Vacations. The insidious tactics used by the scammers to gain James's trust highlight the vulnerability of retirees who are enticed by the promise of a hassle-free property sale—an ordeal that nearly decimated James and his wife's retirement savings.

Beyond the individual story of deceit, the podcast also sheds light on the jaw-dropping involvement of the Jalisco New Generation Cartel in the timeshare scam industry. With the cartels accruing profits upwards of $300 million over the span of five years, this criminal enterprise extends beyond narcotics into the financial exploitation of seniors. The episode reveals how deep the scam's roots go, from hotel employees providing access to potential victims, to the recruitment of unwitting accomplices and sinister enforcement tactics. For anyone concerned with the safety and security of the elderly against predatory schemes, this podcast episode is an important listen.

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How One Family Lost $900,000 in a Timeshare Scam

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How One Family Lost $900,000 in a Timeshare Scam

1-Page Summary

Timeshare Scam Targeting Elderly Americans

The recent exposure of a sophisticated timeshare scam reveals how elderly Americans are being systematically targeted, losing large sums of money, and the shocking involvement of a major drug cartel.

The Scam's Tactics and James's Experience

James, a retired law enforcement officer, became a victim of the Worry Free Vacations' scam, designed to deceive timeshare owners into believing they had a legitimate buyer for their property. The scammers, creating a web of lies including a bogus company and a fictional character named Michael McCarthy, built a relationship of trust with James. They provided continuous assurances, convincing him to wire money to cover a series of fake fees, supposedly held in an escrow account and to be refunded after the sale. This fraudulent activity went on until James had lost around $900,000, nearly destroying his and his wife's retirement savings. It was only with his daughter's intervention that he avoided further financial ruin, stopping just short of taking out a second mortgage based on more false assurances.

The Involvement of the Jalisco Drug Cartel

The Jalisco New Generation Cartel, known for its drug trafficking activities, has been identified as heavily involved in the timeshare scam industry. Investigators found the cartel has aggressively pursued this new 'business venture,' reaping estimated profits of $300 million over five years, which could potentially be a conservative figure. These operations are abetted by hotel employees bribed for access to potential victim call lists and the recruitment of English-speaking individuals under the pretense of legitimate employment. The cartel's brutal control over its scam operations was highlighted by the murder of eight call center employees, suspected as a gruesome warning against disloyalty. The risk to those involved is further underscored by the dozens of missing persons cases related to these operations since 2017. The article emphasizes the need for increased awareness and protection for the elderly to safeguard them from such predatory and dangerous scams.

1-Page Summary

Additional Materials

Clarifications

  • An escrow account is a secure holding account managed by a neutral third party, ensuring that funds or assets involved in a transaction are protected until all conditions of the deal are met. It acts as a safeguard, preventing any party from accessing the funds until the specified obligations are fulfilled, providing security and trust in complex transactions. Escrow accounts are commonly used in real estate transactions, where funds are held for purposes like property taxes and insurance payments until the deal is finalized. The escrow agent oversees the account, ensuring that the funds are used only for their designated purposes as agreed upon by all parties involved.
  • The Jalisco New Generation Cartel (CJNG) is a powerful criminal organization based in Jalisco, Mexico, known for its involvement in drug trafficking, particularly cocaine and methamphetamine. Led by Nemesio Oseguera Cervantes, also known as "El Mencho," the cartel has gained notoriety for its extreme violence and territorial disputes with rival cartels across various regions in Mexico. CJNG has expanded rapidly since its formation in 2009, becoming one of the most significant criminal groups in the country, with a wide range of criminal activities beyond drug trafficking.

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How One Family Lost $900,000 in a Timeshare Scam

Timeshare Scam Targeting Elderly Americans

The article delves into a sophisticated timeshare scam that targeted elderly Americans, including the harrowing experience of James, a former law enforcement officer, and the shocking involvement of the Jalisco Drug Cartel.

The Scam's Tactics and James's Experience

James's trust was systematically exploited by scammers from a company named Worry Free Vacations, who initially contacted him with an offer to help sell his timeshare. Confident due to his law enforcement background and after confirming the legitimacy of a supposed Mexican businessman buyer through Google, James wired money for various fees that mimicked typical United States real estate charges.

Michael McCarthy, a fabricated character, and others developed a relationship with James, bolstering his trust with continuous reassurances and affirmations that his money was secure in an escrow account, and all the accumulated fees would be reimbursed post-sale.

This grueling sequence of trust-building led to James losing approximately $900,000 to the scammers over the course of about a year and a half, virtually exhausting his and his wife's retirement savings, including the proceeds from selling his childhood home. James, even being on the verge of taking a second mortgage for the false promise of resolving the issue, only escaped further loss thanks to his daughter's intervention.

The Involvement of the Jalisco Drug Cartel

As per investigators and expert Maria Abi-Habib's findings, the Jalisco New Generation Cartel has aggressively diversified into timeshare scams as a highly profitable operation, distinct from their infamous drug trafficking business. U.S. officials estimate that this industry could have made $300 million in profits over five years from scams, with the likelihood that the actual figures are muc ...

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Timeshare Scam Targeting Elderly Americans

Additional Materials

Clarifications

  • In timeshare scams, scammers often exploit victims' trust by offering to help sell their timeshares, requesting various fees that mimic legitimate real estate charges. They create fabricated personas to build relationships with victims, providing reassurances about the security of their money in escrow accounts. Scammers use continuous communication to maintain trust and convince victims to wire large sums of money, depleting their savings. These tactics aim to deceive victims into believing they are engaging in a legitimate transaction while siphoning funds through false promises and manipulative tactics.
  • The Jalisco New Generation Cartel has expanded into timeshare scams as a lucrative venture separate from their drug trafficking activities. They use aggressive tactics, including bribing hotel employees for customer information and employing violence to control their operations. The cartel recruits English speakers for these scams under the guise of legitimate hotel industry jobs. This criminal activity has led to significant profits for the cartel and poses a serious risk to individuals targeted by th ...

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