Category Archives: Employee stories

dirty tricks, Employee stories

The Shacks—Oops, We Mean Haciendas—of GGC

“The rooms in the Inn at Galt’s Gulch and the freestanding Guest Hacienda are projected to rent for $150-200 USD per night, with occupancy levels at 50% in 2014, increasing to an average of 75% occupancy thereafter. These units are projected to be in very high demand. They will have road access, 220-volt power, hot and cold running water, Internet access, television, full maid service, room service and amenities typical for upscale hotels, while allowing those staying there to experience all of the beauty of living at GGC.

“For investors in the organic farm offering, the Inn at Galt’s Gulch and the Guest Hacienda represent steady additional passive income that will be distributed to the owners of the GGC organic farm as part of their monthly revenues.” Source: Ken Johnson in GGC Farm Program Overview part 1.pdf.

The following is an eyewitness account from a former employee.

In September 2013, Ken Johnson asked the farm manager to develop projections for the GGC farm products for the years 2014-2020. The farm manager was conservative with his numbers. His plan included investment in organic fertilizer and seed, a greenhouse, water flow and well improvements as well as revamped and new farm equipment. He was also adamant that a nursery for the new crops was needed and that a large expense in construction and staffing would be required. The projections showed small profits beginning a few years after the Johnson empty balloon rightimplementation of all the capital improvements.

The problem was that since all the farm investors’ funds went to Guillermo Ramirez for the prodigious land payments with late penalties, and also to the ongoing expenses of the unprofitable farm, there was no capital left for investment into the farm manager’s plan. When the farm manager expressed his opinion on the severe water deficit for the existing lemon orchard, he was promptly fired.

Also at that time, Johnson asked the sales staff for projections for renting the farm worker cabins, or the “haciendas” at Galt’s Gulch Chile. The plan was, in an area with limited choices for accommodation, potential GGC investors could come stay on the property while contemplating a purchase or looking to choose their residential lots. The guest cabins idea wasn’t a bad one, but in Johnson’s hands it turned out to be just another sales gimmick: “five star” rooms for guests to rest their weary heads after a hard day of motion sickness from sitting in a filthy Jeep reeking of moldy pooch. (Editor’s Note: For more on Johnson’s patented hospitality during sales calls, see our previous posts, “More on the Joys of Working in Sales under Johnson” and “Feedback on Johnson from a Potential Investor.” We are NOT making this stuff up.)

The Lepe/Las Casas property had four cabins that went through partial remodeling in preparation for the April 2014 Celebration, april celebration announcement on fbthat is Johnson’s disastrous sales event at GGC. The renovations didn’t go exactly as planned. A hurried effort at renovation into guest quarters was at best a haphazard affair, and ultimately a waste of yet more investor capital.

The cabins were never meant for rental accommodation at modern hospitality standards. They are built from a mixture of adobe, concrete, cinder block, cheap lumber and tin. Only one of them had indoor water access, three of them had exterior baths with no plumbing or sewage. The windows are small and don’t allow for much ambient light. The local carpenters contracted to remodel the cabins had enormous difficulty as the walls and flooring were uneven and out of square. In the end, only two of the cabins were habitable.

Two of the lemon orchard ¨investors¨ visited their respective cabins in April 2014 and commented that they were not exactly haciendas. They are small, dark and should be torn down completely. This was renovations on cabana 2after thousands of dollars had been wasted on a hasty, ¨smoke and mirrors¨ remodel of them. The cabins sat low among the orchard trees, with windowless walls blocking the views of the surrounding mountains. They were originally meant for seasonal farm hands, had been vacant for a decade, were infested with rodents and insects, and would have been the last project addressed by any prudent manager since the farm was starving for water. (Editor’s note: see our post, “How Do You Say Potemkin Village in Español?”)

Yet our imprudent manager, Johnson, touts these shacks in advertising materials as first class guest accommodations that can rent for $200 USD per night with maid and room service. Adding to this exorbitant claim, he said he can rent them at a 50% occupancy rate or more, with the  Agricola farm investors reaping large dividends from the rental income. He even installed Direct TV in the shacks without televisions and installed satellite internet in a cabin in Carén [El Peñon] that doesn´t have electricity or water—more Potemkin Village maneuvers for clueless libertarian “investors.”

The Recovery Team and orchard investors are still awaiting any accounting on the revenue from these shacks. Recently, farm workers were butchering rabbits in one of them, but we doubt they were paying $200 bucks a night. Late in 2014, all of the shacks’ uncomfortable, moldy wicker furniture was repossessed for non-payment by the vendor.

furniture repoLocal merchant Sr. Guillermo Gonzalez repossessing
his damaged furniture.

The Only Real Hacienda at Galt’s Gulch Chile

The main house on the Lepe property—the only real hacienda—also went through a hasty remodel. The majority of the effort was devoted to a 2,500 sq ft wooden deck spanning the entire rear of the house. The deck is quite impressive and wowed the celebration remyattendees, for sure, but what they didn’t know is that weeks were spent modifying the wooden steps and concrete landings so that a mangy, 17 year old dog could have easy access. Yes, GGC investors, the famous Remy cost you more than those nightly salmon dinners.

At least four building contractors have come and gone from GGC, not one of them paid in full for their services or expenses.

The first contractor for the deck installed pine ceilings in the main house before he was fired and eventually threatened by Johnson. The stone flooring and gutted bathrooms were never finished. Most of the lighting fixtures were removed and never replaced. The famous master suite where Johnson let weeks of garbage and soiled laundryLepe main house without doors pile up in the sauna tub and on the linoleum flooring wasn’t renovated. This rodent infested building is dark, damp and dated. Johnson had the large French doors removed— this was later blamed on the Recovery Team—and never replaced (see in this photo), exposing the house to the elements and allowing the many starving street dogs to roam about freely, urinating wherever. The mutts spent most of their time lounging on the wicker furniture when not hunting the peacocks.

The contractors shored up the shacks quite well, but if you go, plan on bringing your own water, maid, insect repellent, septic tank, furniture and a generator.

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Employee stories

More on the Joys of Working in Sales under Ken Johnson

This is a comment posted on Jeff Berwick’s Facebook page from a former GGC employee.

Imagine if you will, you have a client coming in to see the property, you have spent much time building relationships with them. They are traveling from the other side if the world. You meet them at their hotel and have an appointment to see the land where your boss, lets call him Ken doll, has agreed the night before and an earlier text message to meet you there at 11. You drive an hour and a half to get there with your clients where you sit outside locked gates because this control freak boss makes excuses not to make copies of keys because he is insanely paranoid and wants all actions, all work, everything to depend solely on him.

Imagine you sit there for three hours, no gas stations near by, no restaurants, no restrooms, no cell phone reception. In the hot sun. Finally he shows up 3 hours late with some stranger in the car, laughing and joking at a leisurely pace…

He pulls up beside where you are sitting on the side of the road.. Says hey what’s going on.. You express that we had an 11 o’clock appointment and he shrugs and says I got caught up in blah blah..

He then says I got room for two in my jeep, your clients get in his dog hair infested disgusting jeep and he leaves you on the side of the road for another two hours doing a half ass tour.. Completely inconsiderate of the fact that they are starving and thirsty.

Imagine if after he simply drops them back off. And rolls out again leaving you to do great damage control inflicted by him. All the time building relationships thrown out the window as they are super pissed at the disrespect..

What you have imagined has happened on multiple occasions in dealing w ken doll. (Like 3 hours late almost every single day) Keep in mind this was before the clubhouse became a work area, or had Internet) Now imagine if the next day is pay day and he says I will meet you at the clubhouse, he has “plenty if money” he showed off his big wad as he went to the casino. So you are sure this time he will pay you. you drive an hour and a half to meet him. Two hours later you drive back to town to get cell phone reception to see why he hasn’t showed.

He says “yeah I’ve been super swamped, I’m dealing with blah blah blah” completely inconsiderate to the time you could have spent working on the project. Or anything productive.

So you say ok I will meet your at the beach house tomorrow. Can I count on you, he says yeah man. The next day you drive 3 hours to the beach house. You go in and sit on the sofa as he goes through 6 phone calls and never even acknowledges you exist. An hour and a half later of not wanting to interrupt, you finally walk into his bedroom where he is answering an email and say. “Ken doll, what gives?” He says “what’s up?” I say we were supposed to meet. He says for what.. You say, to get paid.. He says for what? For my fucking work dude.. For the videos I created you troll faced fucktard.

He begins questioning you as if you are trying to get over on him and you present a calendar you have created to detail every day what you have accomplished. He looks it over and says, sorry dude, I had to pay out a bunch of people. I don’t have any money.

His phone rings, he holds up his finger answers it. And leaves you standing dumbfounded on such an asinine amount of inconsideration. He doesn’t bother finishing up your conversation as he gets up and walks out on the phone the whole time. Saying to the caller “well I don’t know what your deal is man, we are all over here working, I don’t know what you’re doing.” He does this to team members who come from professional and entrepreneurial backgrounds. If you are not in his direct eyesight he does not believe you are working.

This is but a snapshot of every single day working for Ken Johnson. This actually happened to me. Its a forced bottleneck under his control, every waking hour, insanely paranoid, incompetent business decision after decision. Infested with Little man syndrome. It’s enough to make you seriously question the value of NAP [non aggression principle–Ed.]. So why would you stay more than a week? Because you believe so much in the message of liberty that you feel it will work in spite of him. After a while [you] begin questioning your own sanity. Like why the fuck is no one else saying shit? It was a fascinating thing to watch unfold, but words can’t describe the frustration. Does it sound like freedom?

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As you see, the affinity scam worked on the employees, as well, since most of them were libertarians drawn to the message, just as we investors were.

Employee stories

The Joys of Working in Sales under Ken Johnson

This stunning email was written by a GGC Account Manager about the lack of information and proof of real activity coming from “managing partner” Ken Johnson. The timing is just one month before the closing on the second disastrous property purchase Johnson made for the project, Lepe/Las Casas.kj dunce

Johnson loves to characterize dissension among GGC employees as a grand plot to destroy him and GGC. Yeah, right. Life is a melodrama. Psychologists call this “victim playing,” when a abusive personality turns the tables to appear as the victim rather than the aggressor.

The true explanation of what was going on is obvious: Johnson was in danger of being exposed as a con man and had to attack his employees to cover up his scam. Far from trying to destroy the project, these conscientious workers were desperately trying to correct what they misinterpreted as Johnson’s incompetence in their effort to deliver on the promise of GGC. This email is a prime example.

From: GGC [Account Manager’s Name]@galtsgulchchile.com
Sent: Wednesday, July 17, 2013 9:16 AM
To: GGC_Ken Johnson
Cc: Two other Account Managers; Andres Chirgwin (project lawyer);  jberwick@tdvmedia.com (Jeff Berwick, The Dollar Vigilante and GGC partner)
Subject: Re: Sales update

Ken,

Here is a collection of questions, concerns and the feedback from serious clients, which I’ve communicated many times. They expect to see these answers in writing, with details, not just guesses and estimates. It is important to remember that many of them went months and months without receiving any kind of feedback to their inquiries.

1. They want to see a map and layout of the lots.

2. They have questions about zoning.

3. They have questions about building codes.

4. A few have expressed (and many more probably have unexpressed concerns) that the timelines have been greatly under-estimated in all of our communications and promises. Many are very wary, having seen other similar communities fail to deliver on promises, and want to first wait and see if infrastructure is indeed being put in, etc. Almost everyone asks the question, “How many people are already living in GGC?” or “How many lots have you already sold?” inferring [sic] that they don’t yet have the confidence in the information they’ve received so far in order to be early-adopters.

5. A number of parties have asked whether there are taxes on their purchase, and want specific details on closing costs and property tax.

6. Almost everyone brings up HOA fees, and simply telling them that we expect the costs to be low is not specific enough, and the agreement gives no clear answer.

7. They have questions about the cost and feasibility of putting in a sewer and/or field beds, since those are going to be their responsibility.

8. They have questions about exact costs and availability of water.

9. They want a clear answer on when they will get to choose their lot, and have title transferred to them.  This is a very important date in their mind, and we cannot over-promise and under-deliver.

10. They have questions about legalities regarding our corporate and banking structure, as well as Chilean real estate law.  For example, here is an email which contains questions that are quite common:

1. Could you please provide any form of proof that Galt’s Gulch Trustee Limited is an owner of land in Region Metropolitana, Provincia de Melipilla, Comuna de Curacavi? It would be great if there’s a public register of land property online, but scanned copy of official document will also do.

2. Could you please provide the Title Report for the property (Estudio de Títulos) and a Property Tax Debt Certificate?

3. Could you please provide the official classification of the land and documents allowing its owners to build infrastructure/houses/… and what are the exceptions/limitations for the use of this land? Besides others, I’d like to make sure this is not something like a protected national park etc. If such documents are currently not available, what are you basing your expectations of future approvals from government authorities on?

4. Could you please refer the applicable real estate laws in the country of Chile?

5. Could you please explain what is the reason for using laws of New Zealand as a jurisdiction for this agreement?

6. The pre-sales agreement is quite vague when it comes to guaranteed deadlines for completing GGC Master Plan and infrastructure. It also doesn’t mention consequences in case the GGC Master Plan or the infrastructure is not ready in “reasonable time frame.” This is probably the most important concern as e.g. I wouldn’t like to end up stuck waiting for years for Master Plan to be ready without having any options of withdrawal…

I’m looking forward to your answers so that I can gain more confidence about this investment.

Kind Regards, Marian

My own concerns from a contractor perspective are:

1. I have not seen an agreement, after 4 months, that details anything around my remuneration.

2. You indicated earlier that commissions would not be paid until land titles are transferred to the owners. Firstly, I feel that this is untenable on principle.  My job is to close the sale; I should be remunerated at the time the client pays.  Secondly, this will take a very long time, based on what I’ve learned from past experience, and from speaking with Chris Serin.

3. The secrecy and paranoia are incredibly undermining.  For example, writing (in CC to others, no less): “I have closed several Founders Club sales at the show [FreedomFest, where Johnson had a booth, for which of course he didn’t pay] and also with clients whom have spoken with you guys or me in the past.  I will not be disclosing who is purchasing and who is not”  is not acceptable, nor is this thinly-veiled attempt at public shaming of my team members, “There seems to be a complete lack of communications throughout the month of July from more than one of you, which I would like to learn more about, since this has turned out to coincide with a complete drop off in your sales production.”

4. The sales team has had no access to the database for many weeks, and scores of email issues. That has made it, at times, impossible to do business.

5. I have concerns that my Founder’s money will be safely kept in a non-operating account into which they wired it, and not transferred into local operating accounts, until the time that land is purchased.  This is crucial, because the Founders expect to be paid back 100% of their funds, and I do not feel comfortable telling them to put their money at risk until a lot of these questions are answered.

6.  I have concerns about the numbers required for profitability. It appears very unlikely, or at least a very long and difficult prospect, to get the low density that is required for us to sell enough lots in order to firstly, pay back our Founders, and secondly, put in the kind of infrastructure that will be required to make a viable community. There has been no business plan that has outlined how the numbers will work with the unfavorable lot density requirements at present.

7.  There has not been any communication from management in all of July, and I haven’t received any new leads. I had completed contacting all my existing leads in June.

8.  Many of my clients, and clients of the rest of the sales team, have visited and toured the property. Almost none of them have moved forward to purchasing, and there is a reason for this, if we are honest with ourselves. And it has nothing to do with sales activity. They have seen a large piece of outback land (albeit gorgeous) that is undeveloped, shows very little sign of any activity or infrastructure. There has not even been a webpage until a few days ago. [NB Emphasis added] This, together with many unanswered questions, is a clear indication that even after visiting, they are tentative about putting their money into the project.

There is a huge groundswell of enthusiasm in this project; that much is clear. But that enthusiasm is also based in the reality of knowing how hard it is to bring a project like this to fruition, and it is only natural that potential investors in this economic climate are very wary of putting money at risk in a project in which there are still so many questions needing answers, especially in a foreign country of which they know almost nothing, much less the language. I have a lot of potential Founders, and lot buyers, who are on the cusp, and desperately want to feel comfortable sending their money in. Everyone wants this project to work, and I have no doubt that it is possible to have hundreds of people invest in a very short timeframe, once the issues that I have relayed in this message have been addressed.

Best regards,

[Account Manager’s Name]
Account Manager
Galt’s Gulch Chile US toll free: 800.363.xxx ext. xxx

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By the way, do you think that the lack of activity in bold in the above letter might be evidence of former developer Johnson’s intentions?