American sunseekers may have once been tempted by Kovay Gardens, a timeshare resort located on the coast in Nayarit, a small state in western Mexico. With an exclusive beach, poolside bar, gym and Jacuzzi, the resort would have once appeared appealing for well-heeled travelers wishing to luxuriate.
But last Thursday, the U.S. Treasury sanctioned the resort, claiming it was linked to a timeshare fraud network connected to the notorious drug cartel, the Jalisco New Generation (CJNG), which the State Department described as a “transnational organization with a presence in nearly every part of Mexico” in February 2025.
In a press release, the Treasury said cartels like the CJNG claim to be third-party timeshare brokers, attorneys, travel or sales representatives, government officials or other professionals linked to timeshares before asking victims for upfront fees or taxes to receive money supposedly owed to them for their timeshares.
In particular, Kovay Gardens, which was previously called Vallarta Gardens, engaged in scams to defraud American timeshare owners by falsely promising them that they could rent out their unused weeks and overcharging credit cards, the Treasury alleged. The agency said Kovay Gardens then shared its customer databases with CJNG-controlled networks.
The sanctions on Kovay Gardens mean that transactions by U.S. persons or people in the United States that involve the property are blocked, the Treasury said, adding that violating sanctions could result in the imposition of civil or criminal penalties on U.S. and foreign persons. Those who engage in certain transactions or activities linked to the sanctioned entity, including making payments or receiving services may also risk being exposed to sanctions.
Nevertheless, days later, travel websites are still selling bookings at the luxury resort, a Newsweek investigation has found.
Newsweek has found listings advertised at timeshare marketplace RedWeek and short-term rental website Airbnb.
An Airbnb spokesperson told Newsweek the company complies with applicable sanctions and takes these obligations seriously. They said Airbnb listings are screened against sanctions lists and that the company had removed a small number of listings based on the new sanctions.
Newsweek reached out to RedWeek to comment on this story.
A RedWeek listing offers a four-bedroom unit with two bathrooms and a kitchen.
“Find a piece of paradise at Kovay Gardens,” the listing says. “Within the private gated grounds[,] you will have access to sea kayaks, Jet Skis, tennis courts, swimming pools, fitness center, fully-equipped spa, and an open-air restaurant.”
“Take a Jet Ski and cruise the bay, where you may spot a whale or dolphins. Enjoy the private sun decks and cozy reclining lounge chairs. Play the nearby golf courses and get a discounted guest fee. The concierge and staff will attend to all your needs and requests, including in-villa chef service and food/beverage stocking.”
One Airbnb listing, advertises an “elegant 2-bedroom apartment with a private mini pool” in “the exclusive Kovay Garden complex.”
Another Airbnb advert calls their “exclusive Kovay Gardens” listing a place “sheltered by beautiful gardens, pools and particularly surprising areas.”
It is not clear when these adverts were first posted, but they remained available at the time of writing. There is no suggestion they were posted after the Treasury sanctioned the resort and past reviews of the listings on the websites indicated that some have been online for years.
Newsweek also found listings for Vallarta Gardens available at Golden Rentals and Booking.com. Vallarta Gardens was Kovay Garden’s previous name and it rebranded in 2023. These listing addresses were in the same area as Kovay Gardens, but Newsweek could not confirm if the listings were part of the sanctioned entities and reached out to the Treasury to comment on this story.
Newsweek also reached out to the above companies to comment on this story. Booking.com did not return Newsweek’s request for comment, but after we contacted the company the listing was removed.
On Friday, one day after the Treasury imposed sanctions on Kovay Gardens, it was also possible to book stays at the resort via Trivago, WeGo and TravelUp. These websites did not respond to Newsweek’s request for comment, but at the time of writing the Kovay Gardens listings had been removed from their websites.
Alexander Witt, a trade compliance expert told Newsweek: “There is a critical gap of time between an Office for Foreign Assets Control (OFAC) designation and the sanctions screening tool of this company. Because your sanctions screening tool should immediately flag an OFAC designation and block all transactions.”
Claire McLeskey, a sanctions consulting firm co-founder and former leader of OFAC’s compliance division told Newsweek that there were “serious U.S. sanctions and legal risks for anyone continuing to deal with these companies after they were sanctioned.”
“This timeshare fraud criminal network was sanctioned under both counter-narcotics authorities and counterterrorism authorities,” she said. “Anyone who knowingly provides material support to a company sanctioned under U.S. counterterrorism authorities risks being sanctioned themselves or facing criminal penalties.
“Bottom line, there are serious U.S. sanctions and legal risks for anyone continuing to deal with these companies after they were sanctioned, outside of authorized activity. For example, OFAC has allowed U.S. persons to wind down transactions with Kovay Gardens and its subsidiaries through March 21, 2026. But this type of ‘wind-down’ license does not typically include new bookings or other new activities with sanctioned companies.”
Days after the Treasury sanctioned Kovay Gardens, the leader of CJNG, Nemesio Oseguera Cervantes, also known as “El Mencho,” was killed during a security operation to arrest him. It sparked widespread unrest in Mexico and cartel retaliation in multiple states and a number advisories warned American travelers and residents to shelter in place.
Meanwhile, as part of their enforcement efforts against Kovay Gardens, the U.S. Treasury also sanctioned five Mexican individuals and 17 Mexican companies associated with the network on Thursday.
More broadly, the Treasury, citing the FBI, said approximately 6,000 U.S. victims reported losing nearly $300 million between 2019 and 2023 to timeshare fraud schemes in Mexico.
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