#1321 – The Expat Files: Scams, Scams, and More Scams

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now I wonder Hello there all you ex-pad wannabes I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Here's a good point next pat buddy of mine brought up to me recently. He said Johnny I know you fly a lot and so do I do you fly business class or coach? If you think about it business class is more expensive maybe

[00:47] 500 bucks or so more than coach in some cases often twice as expensive as coach But I'll tell you it's so much more comfortable But come on. Is it really worth it? Well, my opinion is if your flights three hours or more. Yes, it's worth it if you're not tight for cash By the way one day I was talking to ex-pat Eddie about this He almost always flies first class because he's got so much dough. I said Eddie What's the difference between business class and first class then except that it's about double the price of business class So then what do you get for that? He laughed and said the difference is in first class You never have to come in contact with the poor people. I Know Eddie and he said that to skewer the stuck-up first-class passengers. He comes across once in a while who really do feel that way

[01:34] He says as far as comfort business class is the same as first class except in Business class the poor folks. So walk by you to go to the bathroom. Whereas in first class You're separated by a curtain or a wall. You've got your own bathroom So you never have to mingle with the hoi polloi. There are no such indignities. That's what you get for the extra dough Now there's a word you don't hear often hoi polloi I bet maybe only one out of ten XY and zeros even know what that means now ex-pat Eddie He's a guy who knows a lot about first class He said once he even was sitting in first class when the plane was boarding and everyone has to go past first class, right? He said he heard two ladies in first class with lots of expensive bling remark that thank God

[02:21] They only had to see the poverty parade at the beginning of the flight Because you know once the plane lands First class folks are always the first to distant bark So bottom line flying first class is not about extra comfort over business class. There is no extra comfort It's all about the bragging rights Sort of like people who collect expensive watches I mean you could only wear one and you don't even need one clocks are everywhere They stare at you every time you look at your cell phone So why does anyone wear a wristwatch except for maybe it being a fashion accessory? I get it. It can be a thing especially for women but to wear a five or ten thousand dollar Rolex or whatever It's nothing but bragging rights, of course Same thing goes for two three and four hundred dollar tennis shoes or a thousand dollars worth of custom timber ridge hiking duds

[03:11] Bragging rights all about the bragging rights. So then what about a guy like me who flies an awful lot? Well, I've only flown first class once in my life But it was a nice long flight from Chicago to Frankfurt Germany on Lufthansa though I have flown business class a few times mostly because I got a free upgrade for points or something So then you might ask why don't I do it more? Well, it's not that I can't afford to do it It's just that I find that after I've paid a couple of hundred extra bucks to do it And I'm sitting there. I do the numbers and get business class buyers remorse I'm thinking is the few hundred bucks extra worth the fact that you only get a couple extra inches of legroom Somehow I just don't feel good about the math I always reflect back to my early days in high school and college when it took me a couple of weeks of stock and

[04:00] Shelves at Kohl's or picking up dead dogs on the Chicago Street Department to earn that kind of dough But that's just me. Call me a tightwad. Call me a cheapskate Call me a takanyo. That's the Spanish word for skin flint takanyo By the way here in Latin America, you can make a gesture that also signifies cheapskate or takanyo You just raise your arm and touch your elbow with your finger. If you see someone doing that to you You're being called out silently as a cheapskate Down here when Latinos do it to each other That's a pretty big insult but gringos and expats don't seem to mind They don't get it or take it all that seriously Now as far as gringos and expats getting business class or first-class buyers remorse I know that sort of thing doesn't bother any of my expat gringo friends who grew up with parents who had a bit of dough

[04:50] Kids who were born with silver spoons in their mouths. I wasn't many gringos and expats who travel a lot grew up that way However, I was one of those small cohorts of American kids who never got the Disneyland experience as a kid because my parents couldn't afford it You know back when I was a kid That was a very easy way to tell if a kid's parents had dough or not If they took their kids to Disneyland or Disney World or even on repeated trips to Disneyland or Disney World Even back then way before people were posting stuff on social media where parents went or took their kids on vacation Was a big determinant of neighborhood social status Oh, I got to see Disneyland and Disney World all right as an adult That's a hell of a letdown You know because the whole idea is to see the Magic Kingdom when you're still a wide-eyed kid and believe in things like the tooth fairy

[05:39] Santa Claus and the Democratic Party. I'm not asking for sympathy here, but I never got that chance But I digress as usual anyway flying business class Well by all means if it's a long haul flight and if you don't have a sudden attack of buyers remorse by all means go For it, but here's the thing. I know lots of gringos and expats who are nature types You know they go hiking camping mountain climbing etc They don't mind and actually look forward to a couple of days cooking over campfires sleeping on the ground Sweating through their clothes then getting soaked in the pouring rain getting bug bites and shitting in the woods But when it comes to flying they just have to go business or first class because sitting in coach You know it's just way too uncomfortable

[06:25] Hmm you get that logic. I don't now as for me. Call me a softie call me a wimp I don't much like camping hiking mountain climbing sleeping on the ground or shitting in the woods, but hey, that's just me. Oh well By the way have you noticed that when you board your airplane? Then you're heading to your seat coach when you go through first class you realize most of those people there are putting on the dog I can't help but wonder besides the fact they have money or Pretend to have money what makes them different from me and all the other guys in the cheap seats Well, you know with all the flights. I've taken I've observed a few things about those characters in first class They're more Preston polished real designer clothes The ladies especially the older ones look like they just stepped out of the beauty parlor there are just no scruffy

[07:12] Rumpled backpacker types in the crowd at all and if they do have ripped torn worn and distressed clothes They're high-end boutique expensive stuff from Milano and Paris. Oh, and they're all sporting high-end luggage, too My sister's like that. She's got some designer luggage. I forgot the brand 2,000 bucks it cost her can't believe she shelled out for that crap, but she did I mean look if you were a crook work in the airport or a crooked taxi driver Who would you target the ragtag backpacker or the lady with a $2,000 luggage? Just saying Alright moving on people often ask me how likely it is to get scammed once you're down here in Latin America After all especially if you're on the gringo tours trail down here many Latinos look at us as dollar signs That's why on this show and at my expat insider seminars. We talk about how gringos can avoid getting ripped off and scammed

[08:04] So then how often does it happen? And what are the likely chances that you'll be a target? Well, it is a sort of a dirty little secret that it seems every gringo and expat who moves down here to Latin America You're gonna get scammed or ripped off somewhere along the way and it'll be a good lesson for you You'll feel like a fool, but hopefully you won't be scammed for too much it happened to me when I first got down Usually it's nickel and dime stuff you get stung a bit But you learn or you hear stories about how that stuff happens to other gringos and expats and you'll look out for it yourself You just have to keep your eyes open and not fall for things that seem too good to be true That's the key if they're too good to be true. Well, you know, they're not Now if you think you're above all that and you're way too smart for anything like that to happen Ask any gringo down here ask the smartest gringo, you know, ask him how he's been ripped off

[08:54] He'll tell you a story or maybe two or three Sometimes when you hear those stories you think what an idiot I'd never fall for that But maybe you would and you know gringos no matter how smart we think we are often fall for Stupid pyramid schemes that we should have seen coming a mile away It's all about the presentation though and crooks are getting more sophisticated all the time In fact, I've got a little stack of emails and articles here that highlight that very thing Here's one from Lenny's is Johnny my father who is in his late 60s got a call about a great even spectacular deal to stay in Cabo San Lucas Mexico The caller said in perfect English that for just 35,000 pesos. That's about 1,800 bucks Us he could have a two-bedroom suite at a Sheraton hotel and all-inclusive for up to four people

[09:42] After about 10 minutes of bantering back and forth on the phone line He was given a bank account number to transfer to money and told he would receive an email with the bank info and then an email With the confirmations well as promised within a couple minutes He got the first email from the bank with signatures in the bank's logo now My father wasn't stupid enough to send the whole amount that would have raised a red flag They only wanted a $500 deposit The remainder to be wired to the bank before he arrived or paid with cash or credit card at the hotel upon arrival Anyway, Johnny has mentioned he got the first email from the bank Totally legit looking and he sent the 500 bucks a few minutes later. He got the second confirmation from the hotel official logo itinerary confirmation number and everything

[10:28] My dad printed out those emails and a few weeks later flew to Cabo arrived at the hotel With three of his buddies found out they had no record of the reservation They had no idea who he spoke to or any kind of correspondence about it with the bank He ended up spending the night in an airport hotel because there were no rooms available at that particular hotel nor any he could afford At the time when he got back home all pissed off and disgruntled. We took some time to contact the bank They said the account was closed and that he had no idea what we were talking about Even though we sent copies of the transfer and the account number all the correspondence It was in fact a real legit Mexican bank After being placed on hold numerous times the bank representatives said the account never existed

[11:14] But that could not have been true Since my dad transferred the money and it was deducted from his account it landed there All right, the bank's customer service people said they would look into it, but that's the last we ever heard It's been four months since we last spoke with anyone from the bank then he says I'm wondering Johnny how many senior citizens fall for that one and How many just suck it up out of embarrassment and never report it? They seem to be the most vulnerable to this sort of thing signed Lenny Well, Lenny, thanks for that. But I don't think it matters how old you are It's the fact that they like to target senior citizens because they know they have the dough on hand they have savings Plus time on their hands to listen to the spiel and banter back and forth on the phone

[12:00] Notice that one of the ways they hook you in is not to ask for the whole amount, but just a deposit Personally Lenny, I'd say your dad got off easy 500 bucks. Come on. How many of us can say we've never been ripped off for scammed here and there for 500 bucks Sure, it stings a little but 500 bucks won't make a break you you'll learn a lesson though On the other hand if you get nicked for five or ten grand now We're talking major pain and it seems most gringos and expats. I know who've been nicked for big money It's been almost exclusively a real estate scam number two on that gringo expat Scam list is a business partner scam when you hook up with a Latino business partner often gringos who do that will make a 50-50 deal where you put up the money or

[12:47] The lion's share of the money and he the so-called expertise and the legwork and the legal stuff You know and somewhere along the way he gains big and you lose even I'm not immune to getting scammed like that I've had two business partners who scammed me for dough and they weren't even Latinos One was half Canadian half Belgian and one was a pure Canadian guy. Imagine that but man I'll tell you stories abound regarding gringos and expats who've been scammed by local Latino business partners Everybody's got a story man but these days it appears number one on the gringo and expat scam list as Mentioned real estate scams. In fact, I'd like to read you an excerpt of an article that just came out Highlighting just how bad the problem is especially in Mexico where real estate scam artists have joined forces with the cartels

[13:39] developing sophisticated scams Specifically targeting gringos and expats most of whom are targeted while they're still living up in the States Just listen to the title of this article quote like an addiction Thousands of Americans are falling prey to Mexican cartel timeshare scams I'll paraphrase this a bit as usual cut out the boring parts. It says the first phone call came in December It was a real estate broker from Mexico offering the gringo on the other end of the phone an exciting opportunity a Buyer wants to buy your timeshare that you have in Cancun said the Mexican real estate broker in almost perfect English The buyer wants to pay you sixty five thousand dollars for the one you bought for only forty seven thousand six years earlier now

[14:24] Steven like many timeshare owners Found there was less and less time for family vacations. He was getting bored of the place He had originally bought the place to use two weeks a year So his children could spend time with him in Cancun near the ocean He thought wow this telemarketer's call seems fortuitous plus I can make a nice profit on it, but there was one catch Steven then 54 years old would first have to cover the Mexican federal tax of $3,900 that would be held in escrow and credited back to him when they closed the deal looking back Steven thought that was the first sign he was getting duped by a telemarketing scam that would end up costing him nearly 1.8 million dollars all told by the way Steven had been trying for the last couple of years to sell his timeshare with no luck an

[15:12] All too common problem with timeshare owners who eventually get sick of their properties So he jumped at the chance he was given by this telemarketer who'd called and offered 65,000 for the property then the article goes on to say according to US government Investigations over the last decade tens of thousands of Americans most of them Elderly have fallen prey to complex schemes involving Mexico's violent cartels in property and timeshare deals Then it says timeshare fraud is so lucrative in Mexico That US government officials say the profits now rival the business cartels are most known for drug trafficking Are you getting this? They're saying that timeshare fraud is the number two profit center for the cartels

[15:59] Then it says the Jalisco new generation cartel commonly known as the CJNC Started his timeshare fraud business in Puerto Vallarta, Mexico And it's largely taken over the Cancun timeshare the Tulum Playa del Carmen and Acapulco market as well Not only that they have expanded their fraud network to more than two dozen call centers that regularly Contact us timeshare property owner. Yes real estate and timeshare property companies have given up their owner lists to the cartels How about that? so the cartels have all the names phone numbers emails and data of US owners of timeshares and other properties throughout all of Mexico They've also combed through all of the municipal property registries throughout Mexico

[16:47] To find out who all the gringo owners are as well In other words you buy a property or timeshare in Mexico the cartels have your name number and all your stats Including personal data credit records and copies of your passport Since you have to give all that up when registering your property in a municipality in Mexico The article goes on to say if you've been to Mexico You'll know that condos and timeshares are hawked on practically every corner in the tourist areas of Mexico and people on vacation Buy in only to find later They're paying for the time they don't use or they simply get bored and get tired of paying the yearly maintenance fee and are looking To sell with many having their properties listed for years on real estate sites with no bites at all So owners desperate to sell are willing to let down their guard and consider any offer even offers that send up red flags

[17:37] In fact, so many desperate gringo property owners have been scammed says one Brian Rogers head of consumer advocacy nonprofit called timeshare users group There's an actual organization which provides information on how to avoid timeshare scams And if you're a victim what to do about it. Sadly, mr. Rogers says the victims we have in these scams are limitless Reaffirming that it's nearly as much cash in hand as they make from drugs Mostly because the overhead is really low for this kind of operation and only involves paying the salary of the people in the call centers The cartels he says have the system down their lawyers create new shell companies weekly Then abandon them open bank accounts and close them out as soon as authorities identify them and then quickly create new ones

[18:26] And so far the US Treasury Department has discovered 40 Mexican call center companies associated with the Lisco cartel all located in Mexico out of their jurisdiction So no one's been arrested and the key to the operation is having telemarketers who speak almost perfect English one of the first early cases Discovered and rooted out was brought in 2019 by the US Attorney's Office for the Eastern District of Louisiana They discovered the call center was in the US They captured and indicted six Mexican men scamming dozens of American timeshare owners out of 20 million dollars Since then the cartels have become smarter and they locate their call centers within the borders of Mexico Then it says with what the cartels have learned from their well-oiled drug trafficking operations

[19:17] They've now turned to defrauding American citizens turning timeshare fraud into a science They know exactly how to persuade elderly Americans to send money to Mexican bank accounts It works like this the cartel hires call center workers who speak perfect English teaching them to lure unsuspecting Americans into believing they are steps away from freeing themselves from a timeshare They've been trying to get rid of for ages Turns out there are hundreds of thousands of frustrated American timeshare owners in that predicament Just look in the classified ads of your own local newspapers and you'll see countless Americans hoping to free themselves from their timeshares Why because they charge ever increasing yearly maintenance fees to their owners who no longer want to go there or pay Cartels teach employees how to craft documents with names of companies brokers and attorneys that appear totally legitimate

[20:09] They steal or borrow identities of real lawyers and real estate agents So if a client does an internet search they land on a legit website and everything seems fine And get this if the victims do catch on while on the phone with the call center personnel The cartel has another layer prepared to draw him in a few weeks later another call center employee will phone up Saying their information was found in a police raid of a call center They'll tell the timeshare owner they have to pay restitution or the title will be blacked for any future sale The cartel call centers even have people posing as government investigators ready to help get to the bottom of the supposed fraud whose services of course come with their own costs and The money and the wire transfers flow through Mexican banks, which cannot be counted on to take a stand

[21:00] Nor can US government agencies penetrate them in general Their fraud departments are useless according to Spencer McMullen an attorney in Mexican law based in Guadalajara he says Mexican banks do not care to investigate there is no pressure nor personnel to do so as Mentioned the most valued employee in this call center operation is a person who speaks perfect English and The pay and the compensation is spectacular However cartels control their employees at the call centers with an iron fist Last June 2023 Cartel leaders turned their fury on Eight English speaking call center employees who had a change of heart and wanted to quit the remains were found in 45 plastic bags at the bottom of a canyon outside Guadalajara

[21:47] Turns out cartel call center workers work the phones from 6 a.m. To 9 p.m One of those calls was to Filipino Medina 73 years old a retired United Airlines employee Who in 2022 was told a buyer would pay 50 grand for the weeks he owned in his timeshare in Cancun Like the previous case mentioned Medina was told he first had to pay capital gains tax in Mexico and a federal Mexican tax They then told him the buyer's check was sent to him by FedEx But was held up at the border and he'd have to pay a fee to have that check released After weeks of delays by the time he hired a lawyer to sue for the funds He had wired a total of 80 grand to Mexican banks emptying his savings and 401k in the end Medina went bankrupt and lost a sports bar. He owned in Hayward

[22:32] It's been reported that cartels have developed many layers to this scam if you don't bite the first time They'll come back a second and the third time many months later For example, remember the first example of a guy who got scammed Well, sometimes I'll scam it two and three times if you're gullible enough It turns out our first victim in this report was again contacted in 2023 by yet another supposed realtor who said someone again wanted to buy his timeshare The second caller he said appeared to be much more professional and legitimate The seller found himself deep in another scheme. This one more convincing than anything. He'd ever seen along the way our gullible gringo mark wired $240,000 before figuring out he'd been scammed for the second

[23:21] Time he reported the company to the FBI's Internet Crime and Complaints Center They confirmed the company he was dealing with was fraudulent, but couldn't do a thing about it because it was in Mexico They also admitted they had at least 1400 complaints against them Then some months later our perpetual mark received a different kind of a phone call this one offering relief from the harm He had endured it was a woman who said she was an attorney a part of a Mexican law firm That was bringing a class-action suit against that Mexican bank who knowingly accepted wire transfers on behalf of fraudulent companies She said the lawsuit was being reviewed by the Mexican Supreme Court and that our man in question Who'd been duped twice before was due damages and restitution that would eventually total more than six million bucks

[24:09] According to the case. She was preparing our perpetual gringo mark research the woman's law firm online It was legit the website even had a link to the Attorney General of Mexico and a link to Mexico's financial Intelligence unit it all looked perfectly fine The catch was he'd have to pay fees to both those government organizations before the court would process his claim Including tens of thousands of dollars in clerk fees printing fees docket fees interpreter fees court honorariums a court tax and Exit tax on the settlement a total of more than a hundred grand directly to government entities But remember the payoff was six million bucks then after he paid the fees things got even more crazy He was told he'd been flagged for money laundering by Interpol because he had sent many transfers over

[24:57] $10,000 too many 10k transfers will trigger an investigation as proof They were serious the Mexican attorney sent him a copy of his passport with a red flag notice from Interpol attached The notice said his restitution would be withheld until he paid to be removed from the Interpol list of course He paid it. She told him he was also on the US Interpol list in addition to the Mexican one And he must pay tens of thousands to get off that list So fearing arrest and officials showing up at his front door. He paid that too It was only then he thought to call Interpol Headquarters in the US to see that he'd been removed only to find out there was no record of him ever being flagged In the first place at that point he hired a US attorney and filed a report with the Internet Crime Complaint Center

[25:45] Detailing every dollar he had transferred to date Remember now the Internet Crime Complaint Center is a US government organization Part of a federal US agency and guess what he never received a single response to his complaint In the end his particular scam Spanning many years now had spiraled into multiple complex operations involving 99 wire transfers more than 150 people in at least 12 Mexican bank accounts Turns out by the end of 2023. He had paid Mexican telemarketing scammers just shy of 1.8 million Alright me Johnny here. That's how the article ends Sounds like a bad Hollywood B movie doesn't it now? I know what some you're thinking what an idiot he deserves to get scammed

[26:34] But maybe not look the guy was worth at least a couple of million dollars People don't accumulate that kind of dough over a lifetime if they're fools and idiots Now you longtime listeners have heard me say over and over on this show that timeshares are one of the worst investments You could possibly make they're not really investments at all Many many smart even brilliant people get sucked into them My mother dodged a bullet only because she asked my advice when she was about to buy a timeshare and my mother man She's got a substantially high IQ yet She was seconds away from signing on the bottom line for a timeshare For me the really scary part of the story is the fact that the cartels Have lists of all the gringles and expats who own land property and condos in Mexico, which again begs the question

[27:23] How's your plan becoming now? I sure hope you're thinking about getting the hell out of dodge Just think twice about jumping from the frying pan into the fire by selecting Mexico You've been listening to the expat files living in Latin America If you need some help with your own plan B We can schedule a one-on-one phone or Skype consult Just send me an email the expat files at gmail dot com And if you want to get on the waiting list for my next week-long expat insider seminar in Central America Where you're guaranteed to get a two to five year head start on your plan B Send me an email the expat files at gmail dot com