A Kovay Gardens lawsuit filed in a U.S. court faces steep obstacles: the resort in La Cruz de Huanacaxtle, Nayarit, was sanctioned by the U.S. Treasury on February 19, 2026, as a “cartel-run fraud engine” tied to the Cartel de Jalisco Nueva Generación (CJNG), Americans are now barred from doing business with it, and the one documented federal suit against the property and its founder was dismissed years ago on a forum clause that sent the dispute to Mexico. Defrauded owners are being routed through federal reporting channels instead.
What Courts Have Said About Kovay Gardens
The Treasury Department has stated that “multiple lawsuits have alleged that Rivera Miramontes and Kovay Gardens have engaged in fraudulent activity,” but it did not identify the cases.
The one case in the record is Langsam v. Gardens, filed in the U.S. District Court for the Southern District of New York in 2008. Andrew and Robin Langsam alleged they paid $309,000 for a home at Vallarta Gardens, the property’s original name, that was never delivered. Their complaint asserted breach of contract, conversion, and fraud against the resort, several affiliated entities, and its founder Carlos Humberto Rivera Miramontes personally. On June 15, 2009, the court dismissed the case, ruling that a mandatory forum selection clause in the purchase contract required the dispute to be heard in Guadalajara, Mexico.
That outcome matters for anyone weighing a suit today. Timeshare and purchase contracts signed at the resort have historically pointed disputes to Mexican courts, and a U.S. federal judge enforced that clause on facts that otherwise sounded in fraud.
Why a New U.S. Lawsuit Is Now Harder
On February 19, 2026, the Treasury’s Office of Foreign Assets Control (OFAC) added Kovay Gardens, its founder, four other individuals, and 17 associated companies to the Specially Designated Nationals and Blocked Persons (SDN) List under Executive Orders 14059 and 13224. The designation freezes any U.S.-based property of those parties and prohibits U.S. persons from engaging in transactions with them.
OFAC issued Counter Terrorism General License 34 to give U.S. persons a narrow window to wind down existing dealings with the resort. That license expired on March 21, 2026, and the research shows no extension. Any payment, settlement, or transfer to a sanctioned party after that date generally requires a specific OFAC license.
Rivera Miramontes was sanctioned for acting on behalf of CJNG. According to Treasury, he managed a network of 13 companies spanning tourism, real estate, financial services, and fuel, along with a Texas entity called Hotel Management International, LLC. The resort has also operated under the names Vallarta Gardens, Grupo Kovay, Marina Oasis Beachfront Resort, and Navira Villas & Residences; OFAC updated the SDN entry on May 8, 2026, to capture additional identifiers, suggesting further rebranding attempts after the sanctions.
On the criminal side, a grand jury in the U.S. District Court for the Eastern District of New York returned a superseding indictment on October 27, 2025, charging three CJNG-linked individuals with providing material support to a foreign terrorist organization, money laundering conspiracy, and wire fraud conspiracy in connection with the timeshare fraud scheme. None of those defendants were reported to be in U.S. custody as of late 2025.
The Fraud Pattern Owners Are Describing
Treasury described CJNG’s timeshare operation as a “vertically integrated fraud model.” Based on Treasury statements and CBS News reporting, the scheme ran in two phases.
At the resort, prospective buyers were drawn into sales pitches with promises of luxury accommodations and rental income from unused weeks. After contracts were signed, the resort allegedly overcharged victims’ credit cards and harvested their personal and financial data.
That data fed the second phase. CJNG-controlled call centers, known as boiler rooms, contacted owners while posing as lawyers, brokers, or government officials. Some callers claimed to have found buyers or renters and asked for upfront “taxes,” “transfer fees,” or other costs for transactions that never materialized. Others targeted people who had already been defrauded, promising to recover losses in exchange for additional fees. Some victims were threatened with fines or legal trouble if they refused to pay. Funds were typically collected through international wire transfers routed through U.S. correspondent banks to Mexican shell companies.
FBI data cited by CBS News put U.S. victim losses at roughly $300 million reported by about 6,000 people between 2019 and 2023, plus another $50 million reported in 2024. A March 2023 U.S. government alert on Mexico-based timeshare fraud generated more than 850 suspicious activity reports flagging approximately $330 million in potentially fraudulent transactions. Treasury said the figures were almost certainly undercounts. FinCEN was receiving roughly 40 new reports per month as of early 2026.
Consumer complaints in online forums about Vallarta Gardens and Kovay Gardens describe the same pattern: third parties offering to buy out memberships in exchange for upfront “maintenance fees” or “notary fees” that other forum users identified as follow-up fraud built on the original scheme.
Reporting and Recovery Options for Victims
U.S. agencies have laid out several paths for Americans who believe they were defrauded by Mexican timeshare operations.
- File a complaint with the FBI’s Internet Crime Complaint Center (IC3). An IC3 filing can trigger FinCEN’s Rapid Response Program, which works with Mexico’s Financial Intelligence Unit to try to interdict and recover stolen funds.
- Elderly victims can call the Department of Justice’s National Elder Fraud Hotline at 833-372-8311.
- Report the fraud to your bank or credit card issuer. Financial institutions can file a Suspicious Activity Report, which helps trigger an investigation and may support a chargeback claim on recent card transactions.
Speed matters for wire and card recovery, and documentation matters for any later civil claim: keep the signed contract, wire confirmations, credit card statements, emails, and phone records from anyone who contacted you about your timeshare.
Whether a private lawyer can help depends on where your money went, whether any defendant has reachable U.S. assets, and whether OFAC would license the transaction. A lawyer weighing a suit will also have to contend with the forum selection clause that ended the Langsam case, and with the sanctions bar on transacting with the SDN-listed parties themselves.
Watch for the Recovery Scam
Federal agencies have warned that victims of the initial fraud are frequently targeted again by callers impersonating law firms, OFAC officials, or INTERPOL agents who claim they can recover lost money in exchange for “legal fees,” “court fees,” or “taxes.” Legitimate U.S. government agencies do not contact timeshare fraud victims to request payments. Any such contact should be treated as a scam and reported to IC3.