Category Archives: GGC Feedback

Another Galt’s Gulch Chile Investor Evaluates Ken Johnson

April 8, 2017 Dagney Taggart

This is a snippet from a long email to a Galt’s Gulch Chile salesman from a potential investor. This couple likely had several hundred thousand to invest in GGC, judging from the reference to the founders level.

The email is dated Aug 21 2013. Their $300,000 investment would have gone a long way to providing GGC with the funds to pay the first installment of $1.47 million due to the Lepe seller, Guillermo Ramírez, on Sep 14th, a little more than three weeks away.

As it turned out, that first payment was missed by Johnson, forcing him to pay a fine of $200,000, not the only late fine by any means. According to the GGC accountant, more than $1 million in late fines were paid by Johnson during the last four months of 2013.

Our overall experience of the GGC visit was mixed, to say the least. The property itself and its proposed potential are spectacular. If vision meets reality your team will have truly accomplished something. To this extent we were more than impressed. Beyond the location and vision aspect however, we couldn’t have been more disappointed.

A project of such dimension and financial commitment, especially for those of us considering Founder participation, there was not so much as a crude promotional pamphlet let alone one of scope and detail. There was no formal or even semi-formal marketing approach or engagement process that could help potential clients like ourselves stay oriented through the visitation period. I was truly lost throughout the visit. The few people we did meet were presented without context and quite frankly they showed virtually no interest in our being there.

As for Jeff [Berwick] or Ken [Johnson], well we managed to hook up with Ken the day before returning to Santiago, but that was through the determined efforts of my wife, not Ken. When he did arrive late in the evening at our hotel in Viña del Mar, he was his usual haggard, uninterested self. He appeared to be completely disinterested in discussing the project and more interested in sharing some crude thoughts on athlete’s foot and Jeff’s infidelity goings on in Paraguay, I believe. Mark my words, neither my wife nor I are prudes, far from it, but we did not travel half way around the world at great cost for that kind of engagement. We came to develop new relationships, potentially buy a piece of property, meet some individuals in the Bull Terrier world of Chile, and check out business/employment opportunities. All matters short of the Bull Terrier people fell far short. I expected to engage in meaningful dialogues as to the overall opportunities possible, but in the 9 days there it was quite apparent that the GGC individuals had other more pressing matters.

As I mentioned to you, we were not in Chile to possibly buy a passive investment property, we were there to make a decision on investing in a property that we would build on and live in. We are hands on people that want to contribute in any way we can. Not once, did we have the sense that our involvement was welcomed our required. Prior to leaving for Chile, weeks earlier, I completed on the GGC website a questionnaire pertaining to becoming a GGC team member. As of today, I have never even received a response to my inquiry. A small issue, but in the context of everything else, consistent with an attitude of disregard.

Employee stories, GGC Feedback, Johnson's Lies

Galt’s Gulch Chile Investor Evaluates Ken Johnson

October 13, 2016 Dagney Taggart

The following email was sent to Jeff Berwick from a representative of several potential investors. At the time he wrote this letter, the author had had an inside glimpse of future convicted felon Johnson’s “management style” and apparently chalked it up to incompetence. Through further on-the-ground research, he came to understand that the full explanation for FCF Johnson’s actions was not only incompetence, but Johnson’s various tactics for keeping the Galt’s Gulch Chile affinity fraud from being exposed.

“From: XXX
Sent: Friday, July 5, 2013 11:12 AM
To: Jeff Berwick
Subject: GGC Investor Concerns

Dear Jeff,

I am fresh back from my visit with Ken Johnson to the Gulch and to ask the hard question for the Investor Group I represent. I must confess I have serious concerns about the viability of this project.

As you may recall I represent a group of 8 Doctors that want to acquire 4 founder properties in which to build a state of the art world class healthcare facility and their private residence at GGC. Collectively this group represents a $2 million investment into the Gulch as well as a prestige boost for the marketing of GGC to announce the acquisition of a state of the art health care facility to be in the inaugural build of the community.

With that much potential on the line I must admit I was expecting to get a better presentation than I received.

Johnson’s Idea of a Sales Meeting

First was the smell of wet dog that had been molding in a closet in the car, as well as dog hair covering the seat I was sitting on. Thankfully I’m not allergic to canine. However, I must admit that the smell was so intense that I had hold back the urge to vomit on several occasions. This morning when I woke up I had to bag my clothes from yesterday to eclipse the smell of moldy, wet dog.

Then, what was supposed to be an afternoon visit was pushed back to an hour before sunset which led to a mad 4 x 4 dash through the Gulch to see it all before dark. I was hanging on in the back seat while we blasted though the gulch to beat the dark, while Ken is pointing here and there about everything to see, yet not seeing very much of it to verify a word he said. Not very impressive.

But these are just style points and not as significant as the competence of your partner who is managing this project.
As you may recall Ken recruited me last month to do some phone sales for him. I worked about a week before I decided I really could not work for him. My “opinion” is that Ken suffers from Napoleon Complex which is defined in the Urban Dictionary as
“A personality complex that consists of power trips and a false machismo to make up for short height and feeling of inferiority.”

Li’l Kenny Fraudster: a Management Disaster

Ken’s over compensation has him micromanaging every detail of every aspect of every decision being made. My experience working for him was revealing in his attitude, manner and communications. I found him to be gruff, hurried, easily irritable and preoccupied. He repeatedly contradicted himself when giving instruction, then he tended to put it all on me when I did not get it and asked for clarity.

In communicating with the others in the sales staff I heard the same issues arise and the general consensus is that working with Ken is a joyless experience, lacking compassion and an ability to truly connect with people he works with. The repeating theme is that Ken’s self inferiority is out pictured as a lack of confidence in everyone else, thus he must do everything because he trusts no one to do it as well as he can. This is untenable for a project of the scope. Without the ability to trust and delegate the possibility of failure in the execution of this project increases dramatically.

As you may recall, I come from a systems engineering background. I have been computing the various stressors on the GGC personnel and project from what I have uncovered and although I admit it is limited in access and time, I believe this project is headed for catastrophic failure.

There are mainly process management issues and they are clearly red flags but the area of my deepest concerns has to do with the lack of any real documentation to the many claims that Ken is stating. First there is no business plan. Let me say that again … no business plan. How do you get to a destination with competence if you have not even created a road map for how to get there? Flying by the seat of your pants is a dangerous way to conduct an operation of this magnitude with so much cash on the line. This is a classic formula for failing from your own success.

Who Is John Galt? Don’t Ask Johnson

Another odd element is the fact he had not read Atlas Shrugged and has no idea what John Galt represents. Furthermore he is agitated by the Galt metaphor and could careless about it. How can he shepherd this project being so divorced from its origin?

My final concern is being able to get consistent, clear answers and backing documentation from Ken concerning the financial viability of this project. His quoted numbers are constantly changing as is his reasoning for why. This is a truly disturbing element for my investor group.

I truly question Ken’s competence in his ability to successfully complete this project. Thus I am writing to you to reveal my concerns.

I was drawn to GGC by you. I like and believe in your vision for GGC. However your partner is not in alignment with project vision, his management style is closed and demonstrative, he has sucked all of the joy from the staff and thinks he is the “only one” who can do this project right.

Thus all things considered, I cannot in good faith recommend to my investor group to buy into GGC as long as Ken Johnson is the project manager. I wholeheartedly recommend you make a change and do so before the bottom falls out of this project.

As soon as you make a change we would be thrilled to reconsider bringing our resources to Galt’s Gulch Chile.

Sincerely, XXX

Critical Juncture for GGC

Around the time of this letter, several GGC employees asked Berwick for a meeting. They wanted to inform Berwick about how Johnson was running the business and solicit his help. He was, after all, as far as everyone understood, half owner of GGC.

Not surprisingly, Li’l Kenny Fraudster turned this meeting into evidence of a conspiracy to undermine him and “destroy GGC.” Indeed, whenever Berwick was moving dangerously close to blowing the whistle on Johnson and the GGC affinity fraud, Johnson would renew his character assassination campaign, labeling Berwick a megalomaniac, out to either steal or destroy the project based on this meeting with Berwick’s ostensible employees. We cannot even begin to fathom how such a ridiculous assertion could carry any weight, yet Johnson’s histrionics were effective at neutralizing Berwick.

GGC’s sales by July 5 2013 were only about $2 million from just seven victims. The Fraudster’s thrust and parry against Berwick continued the scam for another year and a further $8.5 million.

Que lastima.

GGC Feedback, Johnson's Lies

A Lawyer’s Take on Johnson’s Galt’s Gulch Chile Fraud

March 19, 2016 Dagney Taggart

The following is an email to a GGC investor describing Johnson’s fraud and incompetence around establishing the original entities for Galt’s Gulch Chile.

Whenever the equity investors asked for their shares to be transferred to them, Johnson gave the excuse that the off-shore corporate structure wasn’t complete and that he had to have various people help him develop a tax efficient strategy first. But then he never facilitated the development of that strategy.

Of course, the whole time he was giving excuses, the lawyer who wrote the following account was emailing, advising him to complete the original, off-shore structure, or there would be problems for the investors.

This is a perfect example of the Johnsonesque package: abject incompetence, constant lies, passive-aggressive stance, pitting people against each other, and manufactured crises, all wrapped up with a blame game bow.

Monday, March 3, 2014

I met Jeff Berwick in a Panama conference where I was a guest speaker on trusts and New Zealand entities. Jeff later instructed me on advice relating to Galt’s Gulch. He told me that I would be obtaining instructions from his partner, Ken, and to deal with him. Now at this point I should add that I am an avid fan of Ayn Rand and her philosophies, especially Atlas Shrugged, so I was quite excited at the idea of the project, not that it’s new but its execution would be interesting. My initial instruction was to suggest a structure. The structure I initially suggested was as follows :

a) A New Zealand trust with a New Zealand corporate trustee would manage the project (the corporate trustee was to be the company we have now incorporated called Galt’s Gulch Trustees Ltd). I shall call this GGT and shall refer to the corporate trustee and trust as one entity.

b) GGT was to be the managing partner of a New Zealand incorporated partnership, the investors would form their own foreign companies or trusts and would come in as limited partners. This would for tax purposes in their country deem them as simply passive investors and not having control. Under New Zealand law a limited partnership formed in this way pays no tax on foreign sourced income so the structure is zero tax rated.

c) The limited partnership would own the Chile corporation via shares.

These suggestions were subject to detailed tax advise from competent Chilean counsel because the idea was that the New Zealand limited partnership would lend money to the Chilean corporation and remit profits via dividends, there is a double tax treaty between New Zealand and Chile which makes this favourable for tax purposes but I needed advice from the Chilean end. DESPITE REPEATED DOZENS OF REQUEST THIS NEVER HAPPENED. KEN SIMPLY IGNORED MY NUMEROUS PLEAS TO OBTAIN CHILEAN COUNSEL’S ADVICE AND PROCEEDED ANYWAY DESPITE MY WARNINGS.

I established GGT and gave Ken a nominee director without checking his background because I had met Jeff and because Ken assured me he would follow my advice. I established a solicitor’s trust account which was directed by Ken. I sent the trust’s paperwork which Ken never completed and he still has not signed to this day despite the fact that in the absence of a trust GGT is liable for full NZ taxes.

The house at El Peñon, the land that had to be saved.

Li’l Kenny Fraudster’s Manufactured Crisis Tactics

When the corporate trustee, GGT, was established Ken called me in a panic and told me that he needed my help in “saving the land” because other buyers were going to grab it, he said he needed me to find a Chilean lawyer immediately. I had a lawyer who was a friend in Argentina (he is no longer a friend because of Ken) his name is Daniel and he was an offshore specialist that also had worked for the Chilean football team which I thought could have been beneficial. Anyway Daniel dropped all his other work flew to Chile to save the deal. His only brief was to save the land at any cost and to assist in locating Chilean counsel.

Li’l Kenny Fraudster’s Blame Game

Daniel saved the land but later Ken blamed him for not checking the land for mining rights. That was never his brief and Ken knew that. Ken tried to play Daniel off against me for some paranoid reason and never informed me of what Daniel was doing and vice versa and the whole thing in Chile turned to custard. Ken refused to pay Daniel but I specifically wrote to all parties that I did not wish to be involved in the fee negotiations.

Anyway, Ken started threatening Daniel with criminal sanctions and apparently told Daniel bad things about me.

Ken then later transferred funds from New Zealand into the name of the Chilean lawyer Ken had appointed contrary to my advice. The money was frozen for money laundering and we had to work hard to release it.

Li’l Kenny Fraudster’s Passive-Agressive Tactics

Ken was sent numerous emails saying he needed to work out a proper tax structure and that he needed to establish proper title of the Chilean land into parcels for the investors, to have an investors agreement (partnership agreement), proper accounting and audits, etc. I must have sent these requests over a dozen times. KEN IGNORED MY ADVICE AND THEN STARTED TO BLAME ME FOR NOT PUTTING A STRUCTURE IN PLACE.

After substantial efforts and complete frustration I advised Ken that there was a strong possibility that he could be sued for his negligence and told him I no longer wanted involvement. I wanted either Jeff or Ken to appoint one of their persons as a director and leave me out of it as I saw nothing but a mess. At that point I was informed by Ken that Jeff was now a bad person and that I should not deal with him. Unfortunately, I could not do this as Jeff had initially instructed me and therefore Jeff and Ken were both my clients.

So here we are. Sorry this seems rambling. I personally feel your money is seriously at risk and that unless you take action and put in a serious management and serious controls everything will be lost. I am happy to assist but will never again have anything to do with Ken. He has insulted everyone I know (needlessly) and lied almost about everything and I am happy to say that to his face. I would love to send you emails confirming the fact that I advised him of all the risks he is facing in this project and how to mitigate them initially and he ignored this. My view is that the investors are in a mess solely because of him and he is a walking landmine. [end]

By the way, note that the lawyer referred to future convicted felon Johnson’s panic to “save the land because other buyers were going to grab it.” Johnson said the same thing about the Lepe property. We can only wish. We have never found any evidence to support Johnson’s claim. To the contrary, both properties were over-priced white elephants that nobody else wanted. Their best use was in service as a real estate affinity scam. Claro que sí.

GGC Feedback

Feedback on Johnson from a potential Investor

October 6, 2015 John_Galt

This comment was posted underneath our Letter to the Editor at PanAmPost.com:

“All You Need to Know about the Demise of Galt’s Gulch Chile.”

What a grand fraudulent mess and tragic loss of investors money. It would make for a good book or movie with all the thuggy bits, cowering in the bushes, the fraudster gets defrauded by the better scam artist, etc. I’m glad no one was physically harmed though. My husband and I traveled to Chile & visited Galts Gulch but were not impressed & very suspicious of the entire project from the moment we stepped into the jeep that smelt like wet dirty llamas. Not going to impress many people with $500k to invest. 1st red flag. No one living there or homes being built or infrastructure. 2nd red flag. No farm except an orchard of fruit trees being sold for a few dollars a bushel with many rotting on the ground. Saw no one picking any fruit. 3rd red flag. Met Chilean dude who originally owned the land but I always suspected no titles were legit. 4th red flag. Wasted a day of my vacation but did come home with a tshirt & hat to remind me…..don’t fall for dumbass Ponzi schemes.

GGC Recovery