I had a similar experience. My best friend and I went to Puerto Vallarta in July and rented a Jeep to for the fun of it, and to drive around for a week. We were pulled over the first day we were there right before you get into the Malecon area.
The so called police officer harrassed us for over 45 minutes. He threatened to take us into jail, take the car away, and take our personal documents away. Our crime was speeding while taxis and locals were whizzing by. He told us we could get away if we paid our fine of $200.00. This kept going on for so long, he pulls out a cigarette in front of us and starts smoking in our face. I told him this is not proper police etiquette, he said he did not care.

Finally, he let us go for $ 50.00 which we had to put inside of a magazine. We were terrified and so worked up that day, we were afraid to drive the rest of the week.