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

Hello, James. Hello. Hey. How's it going? Yeah, I'm not having much luck. So, the problem is. funding and all of my money is in. Mexico. All of it. [music]. From the New York Times, I'm Katherine. Benhalt. This is the daily.

A massive scam targeting elderly. Americans who own timeshare properties. [music] has resulted in hundreds of. millions of dollars sent to Mexico. Once you move forward and make your. payment, if anything were to happen, [music] he will directly pay you the. full amount of what you're entitled to, including the gains. He will pay you the. full amount. You've got all my money. It's been. spent. I sold the freaking house. [music].

Listen to this. I sold a house that I. grew up in so that I [music] could come. up with funds to send to Mexico. [music] I don't even have anything from. the sale. Nothing. [music]. my colleague Maria Abihabib on one. victim who lost everything [music]. and the people on the other side of the. phone. That's it. [music] That's it. There's. nothing.

You know what? That's what has been said. every freaking time. [music]. Every time. Just pay this. That releases. the. We won't allow it to to happen again. This [music] is the last time. jinxed. It's Friday, April [music] 12th. Maria, you've been looking into this. scam that's targeting Americans. Where. did your investigation start? So,

several weeks ago, I received a phone. call from a lawyer based in St. Petersburg, Florida, who had been. contacted by a family who was very. concerned that the father, this man. named James, was in the middle of being. scammed. He'd sent hundreds of thousand. dollars to Mexico. and he was. considering sending another $157,000. when his daughter decided to call up. this law firm and try to get her father.

to stop stop sending money to Mexico. So, I called him a few weeks ago as I. was trying to understand what was going. on. Hello. Hi, James. How are you? Good, thank you. Good. He's asked that his last name be. withheld for privacy concerns because. he's quite embarrassed about the story. that I'm about to tell you. Uh you're retired now, but what were you. doing for work? And if your wife was.

working, what was her job? I was with the highway patrol. James is a retired state trooper from. California, and his wife Nikki is a. former school nurse. She was born in 51, so 71ish. Okay. two. She just reminded me 72. and. they're both in their early 70s and they. own this time share that is in Lake. Tahoe, California. And they bought it in. the 1990s for about $8,000. And for.

someone who did not grow up vacationing. in a time share, remind me how exactly. time shares work. Time shares are. essentially vacation properties and they. tend to be beach resorts and multiple. people can buy into this property. The. ownership is a shared ownership. and this gives you the right to use the. time share for 1 to two weeks out of. every year. And so James and Nikki use.

their time share every other year with. their daughters. But as they hit. retirement age and their daughters are. growing up and starting their own. families, they're just not really using. it that much anymore. And time shares. require the owners to pay off yearly. maintenance fees. And so they're starting to think about. maybe letting go of their time share and. selling it. Then one day in late 2022,

James gets a a phone call from a company. that is purporting to be based out of. Atlanta, Georgia called Worry-Free. Vacations. Worry Free Vacations. Yeah, that sounds enticing. Yeah. And they start off with a simple. question, which is, "Do you want to buy. a time share?" And James says, "I. already have a time share." And then. they say, "Great. Well, what about. selling the time share? Do you want to.

sell? There's this Mexican businessman. and he's interested in your time share. and he's willing to buy it for about. $20,000." H. So we figured, well, what the heck? Well, you know, if we can make a few. bucks on it, we'll go for it. And James jumps at the opportunity. And. did he do anything to try and verify. that this was real? Yeah. So remember, James is former law enforcement and he. feels very confident in his abilities to. kind of sniff out untrustworthy people.

So he goes online and he Googles this. Mexican businessman and sees that yeah, he is a real person. Was he's a very well respected. individual in Mexico, you know, very. well off. And uh. and this makes James feel at ease, you. know, that he's selling to a legitimate. person, that worryfree vacations are who. they claim to be, and that he's going to. double his money overnight essentially. And what happens next?

Well, a couple of weeks after he makes the. agreement with the buyer, he's told that. he needs to send a couple of thousand to. facilitate the purchase. What does that. mean? Facilitate. I can't remember specifically whether it. was supposed to be crossborder. registration. So [music] he's being told that there. are these fees that are paid directly to. the Mexican government.

or SPID or some other fee that was. Mexican government required or not. A. lot of these fees are the same types of. fees that you would pay in the United. States for a real estate transaction. So. he begins wiring money to an account in. Mexico. After that, but. a few days later, we get a notification. Well, everything went well except that. we have to pay an additional fee. And. that. every time that he sends one fee, he's.

being told that, you know, he's got to. send another fee right afterwards. [music] Does he get suspicious at any. point? His wife is suspicious. [music]. After, you know, the first couple of. payments, she starts [music] saying, "This does not feel right." H. But, you know, James is the former law. enforcement officer, right? and he's the. one that basically handles the family. finances. And he's confident that all of.

this is going to work out because he's. being [music] told that the buyer of the. time share will reimburse James for all. of these fees once the sale goes. through. [music]. Michael from the worry-free vacations. was constantly reassuring the money's in. that account. Check with the commercial. escrow account. It's there. It's just. these p fees have to be paid and you're. being reimbursed for all of this. They're sending James documents that.

show all of the reimbursements that he's. owed and how much money he's going to. get. And this just makes him feel like, you know, all of this is kosher. We had this commercial escro company. that was involved out of New York. So. there was an air of legitimacy that I. was comfortable with. [music]. you know, maybe. Okay, these guys just. need one more fee and everything is. going to finally be cleared.

[music]. But about a year in, James starts to get. suspicious. He begins asking questions. cuz he wants his money. And every time I asked, "Hey, is there a. way I can get a partial release of these. funds?" There was always no these funds. have to be paid from your account before. they're released. But worry-free vacations, they pivot. and they tell him that listen, you know,

there are all these complications. It's. going to be really hard to get your. money out from this transaction. I could. pay about 30,000 and change to. reinvest the 313,000. into an environmentally. conscious development in Lorettto, Mexico. Instead, we've got this other investment. opportunity in Mexico. And I'm sure you know where that is. Over there on the east coast of a.

Mhm. And that is going to make you a huge. return, even more money than you had. thought that you were going to make. Much more than the $20,000. I suppose I'm supposed to have like 54. million pesos in a Mexican bank account. [music]. Yeah. Okay. [music]. So, this is now no longer just about his. time share. They are now partners in a. real estate investment,

right? And there's this whole new round. of fees and fines associated with that. So, how many payments would you say? Oh, jeez. Uh, quite a few. Uh, couple dozen at least, maybe more. When was your last payment? It would have been 17 January. Uhhuh. And what was that for?

Good question. And all along he believed it was. necessary to pay these costs just to get. the money that he's owed. You know, the amount of money that I've. sent to Mexico is just freaking. exorbitant. And I mean, it is. it is approaching $900,000. or more. Wow. Okay. And at this point, he sent about. $900,000 to Mexico over about a year and.

a half. Nearly a million dollar. That was almost all the money that he. and his wife had saved for their. retirement. Wow. It also included money from the sale of. James' childhood home. and money that he had borrowed from his. daughter and son-in-law, about $150,000. from them. It's It's awful. So they were completely. cleaned out by these guys. Yeah. And. this is when his daughter asks a law.

firm to look into this, which is the. point in the story when I meet James. And when we start talking, it was clear. to me that he just did not know what to. think even after losing this much money. So this started in 2022. When did it. end? We're still in it. Oh jeez. And [music] he's still talking to the. scammers. And as a matter of fact, uh, presently.

there was a request [music]. for 157,000 and change to clear up this. whole thing that would clear the entire. [music]. issue out now. And James is even. considering putting a second mortgage on. his house to send that money that he'd. been promised would finally clear all. this up. One final payment of $157,000. It really sounds like he still [music]. wanted to believe that this was somehow.

legit. Yeah, it was pretty clear to me that he. was being scammed, but I didn't. definitively know what was going on. So, I asked him if he could start recording. his phone calls with the scammers. Would you be so kind as to do me a. favor? Yes. Would you be willing to give them a call. and record them? I'll let you in on a little secret. I've. been recording them.

That's. and it turns out he already had been. Were you free vacations? So, he shared the recordings of these. calls that he'd had with these scammers. over the last year or so, and it was. just remarkable. It gave me huge insight. into how the scam worked and the way. that it sounded over the phone. Is Michael in? I think he's trying to. call me. I couldn't get through pickup. Yes, I believe he did try to call you,

sir. Um, give me a second. I think he's. only going to be in for a couple. minutes. One second. There were two main takeaways for me. listening to these calls. Good afternoon, Michael McCarthy. Michael, I missed your call. I was. trying to pick up. Yeah, don't worry. Yeah, I I figured. something was wrong with your phone. Everything okay. The first is that these scammers had. really gotten to know James so well, and. they really made James believe that.

WorryFree was a company that was working. for him. That's why we need to hurry up. and get this money over to you because. hey, I'm losing my mind, too. I'm not. even here to convince you, James. I'm. not, you know, I'm your broker and and. one of the things they continuously say. is trust me. Look, I'm I'm doing everything I can in. my power and will on my end. So, James, just look, like I told you from the. get-go, I'm going to resolve this and we. are doing it. Just I just need you to, you know, focus on the goal. they would.

refocus the conversation on what James. needed to do to get his money back. Look, if you make your payment as a. security deposit, right away they will. release the funds to you with this with. these. And the other thing, hello. I've been having so much trouble trying. to reach you and I have not been. successful. Is that the scammers had created this. elaborate cast of characters, why don't you answer my calls? And some of them are really aggressive. James shared a recording of this one man.

who claimed to be an agent for the. Mexican government and he basically. started yelling at James. I don't care if your wife is at the. hospital. To be honest with you, I don't. give a damn. But you know what? I do. give a damn. It's your money and my name. is written all over it. Do you understand? Yes. And he even threatened James. If James. didn't pay off these fines, then he. would lose all the money that he sent to. Mexico already. You could get the best lawyer you want.

You could get whoever you want. And this. is not a threat. This is facts. But. anyways, who am I to convince you? Right. All right. Well, thank you for the information. And. uh. are you still there? Hello. Wow. So, these scammers were basically. doing a good cop bad cop routine to stop. James from walking away and to squeeze.

every last penny out of him. Exactly. [music]. If you provide me your email contact. information, I will certainly be happy. to forward all of the [music]. wire transfer information from my bank. account to you so that you can see where. those funds went. Yeah, that would be. that would be great. I have your email. James asks me, a reporter who's based in. Mexico who speaks the language, if I. could help him figure out where his. [music] money had gone to.

Thank you very much. I really appreciate. your assistance. I'm just doing my job. Thanks again, [music] and we'll talk soon. And the. only way that I could figure that out. was to understand who was on the [music]. other side of the phone. [music]. We'll be right back.

So, Maria, who was on the other side of. that phone line? So, by the time that I'd met James, I'd. already gotten a tip from US law. enforcement agencies that they were. seeing a new trend. Mexican drug cartels. were getting involved in the time share. scam industry. Drug cartels. Yeah. And. not just any drug cartel. This is one of.

the most notorious, violent, bloody drug. cartels that exists in Mexico and Latin. America. the Kalisco New Generation. Cartel. And when I looked at James' bank. records, guess what? All the money that. he was sending was going to various bank. accounts that were all located in. Kalisco State in Mexico. Wow. So why would the drug cartels get.

into the time share scamming business? It is a huge business. The FBI told me. that it's about $300 million in profits. over the last 5 years. Wow. But the thing is is that the potential. for it to actually be multitudes more is. huge because the FBI estimates that most. of the scams are actually not even. reported. In fact, only about 20% are. So that means the total time share scam.

business could actually be much larger. than the $300 million that they have. knowledge of over the last 5 years. But. wait, I thought the drug business was a. pretty lucrative business in itself. So. why get into the scamming of elderly. people for their properties in Lake. Tahoe? Well, you have to remember that these. drug cartels, they're not just doing one. thing. They're doing multiple things. They're essentially conglomerates. because it's really expensive to run a.

cartel. You need to pay off officials, both Mexican and American. You need to. maintain basically an army in order to. secure your routes up to the United. States, ports of entry into Mexico from. Colombia. And like any big business, you. need to diversify your income to make. sure that you keep the money flowing. because you never know when one business. is going to be shut down by authorities. or taken over by your rivals. We've. reported that they're now in the avocado.

business and the construction business. And time share fraud is basically no. different than any of those. So, we're. seeing that the cartels have their. fingers in many pies, the legitimate and. the illegitimate economy here in Mexico. It's kind of fascinating to think of. these drug cartels as like sprawling. diversified business empires. But when. did the cartels first get into the. scamming business?

So, Kalisco New Generation started about. 15 years ago. And when they started to consolidate. their empire in Kalisco state, they. found that there were all these scammed. timeshare call centers all over the. state that were being run by various. players and that this was a huge huge. money maker because essentially all you. have to do is call up retired senior. citizens in the US and Canada. It. doesn't take that much money to run that.

kind of a scheme. There's no product. you're making. So essentially they conducted a hostile. takeover of these call centers. They. went in, they kicked down doors and. dragged out the people who were managing. these call centers by their hair and. threatened to kill them unless they gave. up the call centers or started handing. over a cut of what they made. And slowly. slowly Kalisco New Generation Cartel. took over the entire time share fraud. industry.

Interesting. Were you able to find any. of these call centers? So, these call centers are pretty hard. to find. They look like any other. storefront, but I was able to visit two. that were located in an upscale. neighborhood in Guadalajara, which is. the capital of Halisco State. And it was just really perturbing. because it was just so normal. two.

villas about a mile away from each other. outside of one villa. Parents were. walking by holding their children's. hands as they, you know, did drop off at. school. It was right next to a park. where people taking their morning. exercise or their dogs for a walk. There. was no real sign that the cartel was. doing business there. But a few months. before, Mexican law enforcement had found the. bodies of eight young people who had. used to work at one of these call. centers and said that the Kalisco cartel.

had killed them. Wow. What happened? So, I wasn't able to talk directly to. any of the victim's families. They're. just too scared. But in general, this is. usually how it starts. The cartel seeks out English speakers to. work for their call centers. [music]. Sometimes they don't even tell them what. exactly they're doing. They would tell. the recruits that the job was adjacent. to the hotel industry. [music]. You have to remember Kalisco is a huge,

huge tourism magnet for Americans and. Canadians and others. And [music] the. cartel would get their call lists from. bribing hotel employees to give them the. names of people who stayed at [music]. these hotels and also at the time share. resorts. And the people who would work at the. call centers are provided the names and. a manual of what you need to do when you. call. kind of like a loose script of how.

to try to suck as much money as you can. out of these people up north in Canada. and the states. Mhm. So, [music] we don't know for sure what. exactly happened with the eight young. Mexicans who were killed last [music]. year, but through an intermediary, one. sibling told us that when their family. member knew what their job actually was, they became extremely uncomfortable and. tried to leave the call center and find.

another job, maybe. But the Halisco New Generation Cartel is. known for being extremely brutal. They. chop off heads and they'll put them on. the gates of a playground, for instance, so that everybody in the neighborhood. knows what went down. And in this. [music] case, it's possible that they. wanted to send a warning that there's no. defection from their time share call. centers. So [music] basically making a very scary. example of these guys in case anyone. else is thinking about [music] quitting.

one of the call centers. Exactly. And [music] one man who runs an. organization who advocates for missing. people and actually organizes search. parties [music] to comb the forests of. Halisco State looking for the missing. says that he knows of about 30 people. who have disappeared from the call. centers in Halisco states since 2017. So while Americans and Canadians might. be losing much of their life savings in.

Mexico, this is actually deadly. [music]. Are the authorities doing anything about. this? Not really. Other than the fact that. these two call centers were shut down, the authorities. haven't arrested others. They're not. putting pressure on Mexican banks, for. instance, to look into these payments. coming from senior citizens in the US or.

Canada. And you have to remember that. people are really afraid. But you also have to remember that in. Mexico, things are not that clear. There. is a lot of corruption and government. collusion with organized crime and. cartels and the tourism industry. It is huge in Mexico and particularly in. Kalisco state. This is a multi-billion. dollar industry. They don't want Americans or Canadians.

or Europeans who are coming to Kalisco. for its beautiful beaches and its. mountains to hear about these stories. regarding the cartels being involved in. the tourism industry and think, you. know, I'm not going to send my family. there for that beach vacation. It's just. simply too dangerous. So everybody has. an incentive to have the scam continue. whether because they're too afraid and. don't want to speak out or because. they're in on it. So in a way local authorities have an.

interest in sweeping it under the carpet. in order to just maintain this idea of a. tourist destination. Exactly. I mean, the spokeswoman for the. prosecutor's office was very responsive. to me until I told her what I wanted to. ask her questions about, and then she. just simply never answered any of my. texts or phone calls. So, Maria, based on everything you know,

all the information you have, would you. say that you're confident that the. cartels were the ones who scammed James? Yes, 100%. Everything I've seen points. in that direction. What did James say when you told him. this? So, it took him. quite a while to really allow himself to. believe it. On the advice of his. lawyers, he stopped picking up the phone. calls and uh about a week ago, they.

stopped after the scammers kept trying. to call him. But you said he was in it. for over a year. Why do you think it took him so long? Can you tell me after all of that that. had been presented to you, why do you. think you weren't willing to be entirely. convinced? Well, I actually asked him that. question. That's a very good question. Why wasn't. I able to pick up on that right away?

And I think in the back of my mind, uh, I'm finding out that I'm a little more. stubborn than I thought I was. And for. him it was pretty complicated. And I think that I didn't want to. believe that I had fallen for this. I. didn't feel I was that foolish and. stupid when it came to this. You know, I. guess I didn't want to believe that I. could be fooled.

To. come to terms with the fact that he had. lost so much money was to come to terms. with the fact that he wasn't the person. that he thought that he was. that he. wasn't this kind of, you know, clever. former law enforcement officer who was. used to fighting the bad guys and and. winning. Uh, you know, I'm I'm disappointed in. myself. There's a huge level of anger.

towards uh the perpetrators and uh yeah, all of those things wrapped into one. And and part of that I think contributes. to not wanting to actually believe that. I was wrong. [music]. M. Yeah, I hear you. I'm sorry. I can hear the pain in your. voice. Yeah. Some of it's based on shame, right? that.

he lost all this money, everything that. he's worked for. And the fact [music]. that this was all supposed to be money. that his children and his grandchildren. were going to inherit, and now it's. gone. And have you told your daughter that you. think you've kind of come to terms with. the fact that this might have been a. scam? Oh, she's she's been uh involved. Yeah, they know. My daughter does.

I'm sorry. This is a tough time. Yeah. So, I've got to make some sort of. arrangements to uh uh. compensate them for this on top of our. regular debt. So, yeah, it's been a. swell experience. All of it brought on by my evidently my. stubbornness to believe that I couldn't. possibly be a victim.

How's your wife doing throughout this. whole process with this new knowledge? She's not real happy obviously at all. Uh I hear a lot of I told you so and at. this point I've got no defense. She's. absolutely right. There's no question. about it. Do you worry this is going to affect. your marriage? Yes,

there has been an effect. And do you [music] think that at this. point there's any way for James and his. family [music] to get some kind of. justice or at least find some kind of. closure? I justice unlikely. Hm. At this point, I'm [music]. not necessarily expecting much in the. way of restitution.

And as for closure, it's a little bit. too soon to tell. In a way, James has gone through several. stages of acceptance [music] of for what. happened. There's fear, there's shame, there's resignation. And now he's. talking to me partly because he feels. like it's a public service that, you. know, he needs to be vocal so that other. people don't go through what he's gone. through and fall for the scam. And [music].

I think it also kind of helps him feel a. little bit empowered in a situation for. over the last year and a half. He was. kind of at the mercy of these people who. were calling him multiple times a week. I want to try to get as much information. to as many of these official. organizations as possible. I have a streak of anger through me now. that. I've [music] uh developed to the point.

where I'm not going to let this go. [music]. Well, Maria, thank you. Thank you for. having me. [music]. [music].

[music]. We'll be right back. [music]. Here's what else you need to know today. OJ Simpson, the football star who was. accused [music] and later acquitted of. murdering his former wife and her. friend, died of cancer at his home in. Las Vegas. his family said [music].

Thursday. He was 76. Today's episode was produced by Asta. Chedravedi and Will Reed with help from. Claire Tennis Cutter and Lindseay. Garrison. [music] It was edited by. Brendan Clinkenberg and Michael Benois. Contains original [music]. music by Marian Loausano, Rowan. Neimisto, Dan Powell, Pat McCusker, and. Will Reed. And was engineered by Chris. [music] Wood. Our theme music is by Jim. Brunberg and Ben Lansburg of Wonderly.

[music]. [music] That's it for the daily. I'm. Katherine Benhold. See you on Monday. [music].