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Mexico Resale Scam: Nuts and Bolts

Red Flags: How to Spot a Mexican Bank Wire Scam
In early 2012 our GateHouse blog ran an informative post about this scam that we’re republishing here (with minor edits to update the information) so you can learn how it works and avoid the grief associated with these scams. Be aware that the names of companies associated with this fraud change in a heartbeat, so you have to be alert.

Here is how one such company based in Puerto Vallarta worked as described in The GateHouse. Note that all of the scams use the same basic framework, with minor variations laid on top of that framework as the need arises.

The folks allegedly running the boiler rooms from which these frauds originate have a very slick operation in various locations primarily in and around Puerto Vallarta, but they have since spread to locations all over Mexico. Every 2 to 3 months they change the domain names for the marketing company and the escrow company. If they start getting too much heat from the web, it is a short run. If things are going well they run it longer.

The initial contacts are made from a call center to solicit interest in selling their timeshare property. Lists of the timeshare owners are purchased from people who work or worked at timeshare resorts. Of course, there is no obligation and no upfront fee to get someone to sign a listing agreement. Numbers are inflated and the hucksters present the lie that there is a potential corporate buyer in Mexico who will take it off their hands as long as their potential victims qualify. Once someone agrees to a listing it goes back to another center where the second stage begins.

In stage 2 someone from the “marketing” company contacts them to get all of the details of their property and ownership information. None of this is necessary, but it makes the deal seem real. Copies of deeds and/or contract info is sent to the marketing company.

Once this is accomplished, the marketing company advises the seller that someone from an escrow company will be in touch with them. They may also be told that they will have to do a recorded contract call on behalf of the escrow company to make sure that there are no misunderstandings (this is done after the seller receives the welcome info from the escrow company).

The escrow company now makes its initial contact with a welcome call and gives them a website, username and password so they can look at their account and see how much money is sitting there waiting for them. The amount is higher than the sale price because it has been inflated to cover the transfer fee. The fake recorded contract call is usually done the day after they receive their account balance and this is where they are told again that there will be no fees from the marketing company, only a commission after the money changes hands. At this time they are told about the fee of the escrow company and explain that the fee will be reimbursed when they receive their money; in fact if they look in their account, the money should already be there!

This is where stage 3 begins. The escrow company takes over. They call the seller and explain the hows and whys of the fee (international buyer, corporation, etc.) If the seller agrees, they send the wire transfer information to the seller. Done! Once the money is received the escrow company and marketing companies both stay in touch with the seller so as not to create any fears or remorse until the domains are shut down and then they all disappear.

(NOTE: Often the escrow people will go after a second fee which is explained as taxes or another bogus international fee. It is usually the IVA, which is 16%, and on most occasions people will get hit at least twice. They are told that if they don’t pay the subsequent fees or taxes – all of which are bogus – they will not receive any money. Sometimes the victims are threatened with a breach of contract lawsuit or some such action in an effort to scare their victims into one last paymment. Most of them pay.)

They then start up all over again with new companies.

Note that the scam laid out above actually seems legitimate to people they initially hire. As they work their way up the ladder they find out it is a scam; at that point some stay, some leave.

Real names of people often alleged to be associated with these scams, according to my sources, are: Frank Devellano (who was once a sheriff in Yukon Territory), John Kerrigan (an American whose name is also associated with such notorious Mexico timeshares as the Belaire Golf Resort & Spa, Castles and Condos, Grand Miramar, World Luxury Destinations, Mondavi, etc.); Ken Sadowski (a Canadian who has reportedly been associated with previous scammy timeshare sales in Mexico); and Steve Nolan (aka Steve Knowles); and many others.

The people running these scams are very sophisticated and the documents they will send you look genuine — but they are not. Do not fall for it! Do not EVER wire funds to what you think is an escrow fund in a Mexican (or any other) bank. Once that money is wired you will have little to no recourse to ever getting it back.

You can find out more about these scams as reported in many US States, being operated from Vallarta to Cancun and even Los Cabos, and various names they used by following this link. Or simply go to The GateHouse and type “Mexico Escrow” (without the quotes) into the search bar.

Knowledge is power, said the wise man. Be powerful!


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