The Mexico Escrow/Bank Wire Scam
- Someone contacts you and tells you they have a buyer for your Mexican timeshare who is willing to pay you more than you originally paid for it. THE TRUTH: Sorry, but no one is going to purchase your timeshare for anything near what you paid.
- Someone contacts you saying some branch of the Mexican Government has set up a fund to reimburse victims of timeshare fraud in Mexico, and you’re one of the lucky ones. THE TRUTH: There is no such fund! It is a bald-faced lie, no matter how legitimate their documents look!
- AND THE BIGGEST RED FLAG: YOU ARE ASKED TO BANK WIRE FUNDS TO AN ESCROW ACCOUNT IN MEXICO (OR SOME OTHER COUNTRY) TO PAY FOR SOME SORT OF FEES AND/OR TAXES. THE TRUTH: The “escrow account” is fraudulent; the fees/taxes are fraudulent; once you wire the money you will never get it back.
One of the more recent and vile timeshare resale frauds now proliferating is what we call the Mexico Escrow Scam or the Mexico Bank Wire Scam. Our weekly blog, The GateHouse, has covered this issue fairly extensively but it needs permanent discussion here since the problem has become an epidemic and the chances of victims ever recovering any of their lost money are slim to none.
First, the WARNING: If you own a timeshare in Mexico and someone calls you to tell you they can get you out of that timeshare or has a buyer for it (usually for as much as or more than you paid for it), put your tinfoil hat on. ESPECIALLY if/when you are asked to wire money to an escrow account in Mexico. This is a hot and very profitable scam running in Mexico, and if you send money you will never see it again. AND you will still own that Mexican timeshare. The part that really stings is that most of those scams seem to be operated by American and Canadian expats. DO NOT, we repeat DO NOT WIRE OR OTHERWISE SEND THEM MONEY!!!
We call these scams “the Mexico escrow fraud” because they ask you to wire funds to a Mexican escrow company to lull you into a false sense of security. BUT:
- There is no escrow fund. The money gets deposited in a legitimate Mexican bank to an account owned by the perpetrators of the scam.
- There is no escrow company.
- There is no buyer for your timeshare.
- There is no legitimate title company.
- These companies do not exist at the addresses in the USA they claim.
- Their phone numbers show US area codes but they are usually really calling from Mexico.
- There are no extra fees (taxes, etc.) required by Mexico to sell your timeshare.
In early 2012 our GateHouse blog ran an informative post about this scam that we’re republishing here 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 (and they all use a similar process):
Earlier this year a company called All Net Escrow was on the radar, with a phony address in Idaho, which appeared to be working with a non-existent Oklahoma company called Castle Wealth Management. I did some research and found a name associated with the All Net Escrow website; the person named, who lives in the general Puerto Vallarta area, objected strenuously in a comment, as is his right, and I let the whole thing go.
Since that time my investigation has expanded and numerous reports from the Vallarta area have also reached me, with descriptions of the “recovery” scams and pleas for help to stop them. Names were named. Details were given. So here’s what I’ve put together to help explain what’s going on. Are you ensconced in your comfy chair? Got your popcorn and a beverage? Good. Let’s begin.
The folks allegedly running these frauds have a very slick operation in various locations in and around Puerto Vallarta, mostly Bucerias. 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 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 there is supposedly a potential corporate buyer in Mexico who will take it off their hands as long as they qualify. Once someone faxes or scans 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 are also 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 twice. They are told that if they don’t pay the second fee, they will not receive any money. 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.
Names 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).
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!