Category Archives: Johnson’s Lies

Galt’s Gulch Chile SA: In the Beginning There Was Fraud

Actually, there was fraud the whole time at Galt’s Gulch Chile, beginning, middle and end. But in this post, we’re focused on the kj jailbirdbeginning, because future convicted felon Johnson has yet again taken to social media (and probably to drink), posting this tidbit:

“So now I [Johnson] ‘promptly defrauded’ three GGC partners? Ok. You must be talking about the very bitter expat in hiding, John Cobin, his business partner, German Eyzaguirre, your close ally, Jeff Berwick. Apparently, you haven’t seen the signed and notarised (sic) dissolution of all business relations amongst (sic) these “partners”? Or maybe you have, and simply are choosing to misinform people about it? I go with the latter.”

When Is a Partner Not a Partner?

We have written about this episode before in our blog post, “When Is a Partner Not a Partner?” but we didn’t go into the specifics of how the partnership between Johnson, Jeff Berwick, John Cobin and Germán Eyzaguirre legally ended.

Recall that a company was established named Galt’s Gulch Chile SA, (see GGC SA constitution part 1 and part 2) and that Berwick and Johnson had agreed to pay their junior partners $250,000. As Johnson tells the story, after the partners had a dispute that he blames on Cobin, they all dissolved the entity, GGC SA, in November 2012, just before the first disastrous real estate purchase of El Peñon.


house at el penonThe house at El Peñon.


The truth is that Johnson, not willing to pay up, executed a plot to create bad blood and bust up the partnership. That he accomplished with ease, being his typical thoroughly objectionable and mendacious self. His next step was to dissolve the SA corporation.

However, he couldn’t get Cobin’s cooperation. Cobin refused to sign any dissolution agreement that didn’t include paying him and Eyzaguirre that $250,000, and since Johnson never paid, the dissolution didn’t occur at that time.

What Does Cobin Say?

According to John Cobin:

“The dissolution he refers to, might have been a non-compete covenant we signed (against my better judgment and only upon Germán’s incessant urging), which was only to become effective once he paid us, which he never did. So, that document was void or at least useless. There was no consideration ever given in exchange for that covenant not to compete. I do not remember the date. Germán [Eyzaguirre] was certain that if we moved in good faith and signed, it would be enough for Johnson to come to the table himself. He never did. Like everything else, Johnson lied and then took without upholding his end.” [Emphasis added–Ed.]

Independently of Cobin’s Ken Pinocchio Johnsontestimony, we knew that GGC SA didn’t meet it’s legal demise in November 2012 as Johnson always claims. How? Because we have documents that say so. See this email from GGC’s lawyer, Andres Chirgwin, to Johnson dated March 27 2013, especially this highlighted sentence:

“Our potential problems arise from the fact that Galt’s Gulch Chile SA is still in existence and has a shareholders’ agreement that it (sic) is valid and in force.”

Later on, there was a series of panicked emails that flew between Johnson, Chirgwin, and Berwick in the period leading up to the second disastrous real estate purchase in August 2013. Chirgwin was concerned that if  GGC SA weren’t dissolved, Cobin and Eyzaguirre would bring legal action against the successor GGC entity, Inmobiliaria Galt’s Gulch SA, once the entity actually owned something of value.

Smoking Gun

Chirgwin advised Johnson that as majority shareholders (70%) Berwick and he could dissolve the corporation without the consent and participation of their junior partners. Berwick and Johnson were essentially out voting them. This was accomplished on August 30 2013. Here is the document with Berwick’s signature.

Liquidation of Galt’s Gulch Chile SA

And here is the smoking gun email from Johnson to Berwick about that document:

Johnson’s Email to Berwick about dissolving Galt’s Gulch Chile SA

Clearly, since a dissolution document was needed and was executed without the junior partners on August 30 2013, there was no dissolution of GGC SA executed previously with the junior partners, as Johnson falsely claims.

What Does This All Mean?

Johnson always says that he’s just a misunderstood guy who trusted everyone too much and was taken advantage of at every turn. With our two posts, “When Is a Partner Not a Partner” and “Galt’s Gulch Chile: In the Beginning There Was Fraud,” we have put the lie to that tall tale.

Johnson was a con man from GGC’s very beginning, even with his first act as “managing partner,” which was theft. He defrauded his partners as we described. With them out of the way and using investor money sans a dime of his own, he bought El Peñon and later El Lepe by and for himself. Neither Berwick, nor the employees nor the investors knew this, that he was the sole owner of GGC, or how it had happened.

How’s that for a material omission?

Johnson has to continually lie about defrauding his partners to keep up the appearance that he’s just a colossal screw up rather than an abject fraud. Remember, he has three criminal cases against him progressing through the legal system in Chile.

One of the ways he does this is by calling himself “the founding partner of GGC,” meaning there is no other. Without partners, he hasn’t defrauded anyone of their ownership.

Too bad for Li’l Kenny we have documents and eye witnesses.

Social Media Blues

Here, we yet again dispel a Li’l Kenny Fraudster lie with documentation supported by an eye witness interview. Our recounting of the first Galt’s Gulch Chile fraud that Johnson perpetrated on his original partners stands.

We wonder exactly how many of Johnson lies we have to expose this way before the social media crowd figures out that Li’l Kenny Fraudster is a congenital liar and acts accordingly. Haven’t they ever heard the new old saying, “Don’t feed the troll”? *Ugh.*

Coward Johnson's new logo
Btw, about Johnson’s crack that Cobin is in hiding, John had this to say:

“I did not know that I was ‘in hiding.’ Bitter? Being unemployed for 31 months has been pretty debilitating and losing so much of my own money in trying to start our libertarian resilient community, but those things are hardly as grievous to me as having seen Richard, Frank, Jack and Steve lose money. They are all very good people, with good objectives, that ended up getting hurt. I know that Johnson enjoys seeing that happen. Nevertheless, no one can live with bitterness. I push on without it, as I hope that they do, and will help anyone I can that has a shot of imprisoning Johnson and recovering losses.”

And to those sentiments we add, “Ever onward.”

Galt’s Gulch Chile Con Man’s Go-To Tactic–Projection

Johnson Revives his Bitter Feud with
Cobin and Freedom Orchard

Clearly, future convicted felon Johnson is getting bored with bossing around backpackers. Facebook is infinitely more enticing. Well, fantasy is always more alluring than work, ain’t it Li’l Kenny.


John Cobin

One of Johnson’s perennial whipping boys is John Cobin (right), his erstwhile partner in a former incarnation of Johnson’s Galt’s Gulch Chile affinity fraud. We discussed this episode in our blog post “When is a Partner not a Partner.”

Soon after Johnson sabotaged the first GGC partnership to part ways with Cobin–we suspect deliberately to save himself the $250,000 fee he and Berwick had agreed to pay–Cobin began his own libertarian real estate project right next door to GGC called Freedom Orchard. So began a feud between the two that rages to this day, each one calling the other a scam artist.

In fact, we have had reports from investors who were wise enough to eschew GGC, saying that one of their main reasons was Johnson’s trash talking about Cobin and Freedom Orchard. He spoke such venom, bordering on all-consuming hatred, that just a peak into such a level of psychopathy was quite enough for them. Phrases such as, “We’ll destroy Freedom Orchard…” come to mind. Clearly, Johnson forgot one of the primary lessons of Salesmanship 101: do not speak ill of your competitors.

We had and have no dog in that fight but were bitten nevertheless when Johnson spent many tens of thousand of dollars, $30,000 in one month alone, in GGC investor money for lawyers, first paying two firms to research suing Cobin for violating an unenforceable non-compete agreement, and later suing Cobin for libel. Johnson likely could not have been successful in the libel case because Johnson is, of course, everything Cobin said he is–a liar and a scoundrel–and far worse. However, Johnson, after pissing away our money, dropped the case, so we’ll never know.

We review this sordid history because FCF Johnson revived the feud on Facebook, the current forum from which he excretes his libel and lies. Recently, Johnson accused Freedom Orchard of fraud for selling lots on a property that Freedom Orchard didn’t own.

This charge piqued our interest. We know none of the particulars of Freedom Orchard and can’t say who did what to whom (!), nor do we care. However, with this accusation we find a perfect example of one of Johnson fav tactics that armchair psychologists refer to as projection.

Yes, friends, Johnson did exactly the same thing–he sold lots on a property GGC did not own.

Johnson signed a purchase and sale agreement for the Lepe property on May 13 2013. He and the seller, Guillermo Ramirez, signed closing documents on Aug 14 2013. Between those two dates, Johnson sold lots to 14 GGC investors for over $1.6M when GGC did not own the property.

Johnson also criticized Cobin and partners for not being able to make the payments on the land they had under contract. Funny he should mention that because Johnson couldn’t make the payments to Ramirez as agreed, either. Not only was Johnson unable to pay the final installment for Lepe, he was unable to make any of the payments on the property on time.

Now, that’s projection for you.

The Lepe closing document included a nine month payment schedule. As far as we know, Johnson didn’t disclose that to these 14 investors. He also didn’t reveal it to his sales staff, instead telling them that the property was free and clear.

From the August 14th closing through December Johnson was forced to pay $600,000 of investor money in penalties for three missed payments.  Then, facing even more penalties and getting desperate, Johnson defrauded an investor for $975,000 by having Ramirez write a letter saying that all payments were made in full with the exception of the final payment due in April 2014. This was a lying scheme the two concocted to get at that money, since the investor had made his purchase conditional upon all installments being paid through December 2013.

Now, many business people get in over their heads and can’t make payments. And our lawyer has told us it is legal to sell land held with only a purchase and sale agreement or with a series of payments due, or without the required zoning. So far, you might think that this is simply bkj jailbirdad management, and maybe that’s true for Freedom Orchard, we certainly don’t know. But we do know about Galt’s Gulch Chile and if you think that of Li’l Kenny Fraudster, of course you’d be wrong.

In Chile, to sell lots before they are lots, certain requirements detailed in the Urbanism and Construction Act have to be met. For example, the seller must buy a bond or insurance to protect the investor. Johnson, however, did not meet that requirement. That is a felony punishable by up to five years in jail.

Sadly for us investors, Johnson can be caught for only one felony for this particular crime. That is because the contracts Johnson used are not enforceable in Chile. Only one investor who had his lawyer write his contract, has an enforceable contract. Read more about Johnson fraudulent contracts in our blog post “We Should Change the Name to No-contracts-ville Chile.”

Johnson tops his mendacious screed with the biggest lie of all: that he doesn’t owe anyone money as witnessed by the lack of legal Ken Pinocchio Johnsonaction against him. Oh really? He has two lawyers suing him for $34,188 and $54,000. He also owed $71,281 to Chilean vendors, and nearly $100,000 to ex-employees.

For example, Johnson’s administrative assistant from El Salvador is owed $8,132.53 which is a chunk of change for a Salvadoran. She ended up homeless around Christmas 2014. We investors put her up at the farm for two weeks and then bought her a plane ticket back to her family.

Johnson also didn’t pay his farm workers for months, salaries or benefits. They took to grabbing the lemon sales money before he could get it. We caught them up when we took over the farm. Johnson was still not paying the Chilean farm workers after he returned and has 13 cases against him with the pension administrator (see here and here).

And of course he owes all of us investors money, $10 million, in fact. (Apparently Jerry Folta hasn’t demanded a refund.)

The only number lower than Johnson’s IQ is his credit score. So for him to say he doesn’t owe anyone money is a truly fitting end to this example of his psychopathic projection.

Coward Johnson's new logo

Btw, we’ve discussed Li’l Kenny Fraudster projection before. Check out our other posts where we exposed his Paraguay passport scam, his trashing of the Lepe property, his cutting down of protected trees… we could go on and on.

If there’s one thing you can be sure of when dealing with the Fraudster: whatever he’s accusing others of doing, he’s guilty of it himself.

Latest Galt’s Gulch Chile Scam–Free 1st-World Labor

We’re often asked the question, “What’s future convicted felon (FCF) Johnson doing now that the Galt’s Gulch Chile scam has been exposed?“


We’ve added a note at the end of this post. The “cultural exchange” website with no conscience is Workaway.info.


He’s got two criminal cases against him in Chile, an FBI investigation into his illegal activities in the US and various civil actions against his previously owned corporations. He’s losing his public relations war Li'l Kenny's an empty balloon.against us investors, having been outed on Panampost.com, Borderless Podcast, The Jet Setter Show and Christopher Cantwell.com. His Facebook page is a pathetic showing. The best he can do is post pix of flowers, and recycle nasty lies about the Recovery Team for both his followers. He’s had over three years of living off GGC investors, and he’s squirreled away upwards of $2 million. Any rational person would have gotten out of Dodge. People always ask us, “Has he left Chile?”

No he hasn’t, because Johnson’s not a rational person. He’s still squatting on the GGC Lepe property, but he hasn’t been idle. He’s been pulling off his next scam.

Cultural Exchange with a Crook

There are quite a few cultural exchange websites, where first-world backpackers can find opportunities to travel on the cheap, working for room and board as they go. Sounds great at first, but the reality can be at odds with what’s promoted, especially if a con man is the host and the website doesn’t do jack to vet their members.

FCF Johnson’s latest scam is posing as the owner of Lepe and convincing backpackers that working for him for free is a Chilean cultural exchange. Here’s a snippet from his host page, essentially an ad for indentured servants:

“Large Organic Farm – A Work In Progress – Fun [Volunteers] – Fun Times – Friendly Animals – Tons to Do!

“We have a beautiful project in central Chile, with a 250-acre organic farm, new organic greenhouse, and endless hills and valleys, nestled in the beautiful coastal mountain range. We can always use help with a long list of items that revolve around maintaining, expanding and improving our large organic farm, our new organic greenhouse (more are planned for construction as we expand the farm an additional 30 hectares), our beautiful organic garden and completion of our remaining guest haciendas…among a few other things. The project has 4,500 hectares of land, with trails for hiking, mountain climbing, horseback riding, etc. There is a small river, swimming holes, etc. a short walk from the haciendas. We have a swimming pool that was recently cleaned by [the cultural exchange volunteers] and is now regularly used by our [volunteer] guests after a day of working on various projects.”


Cultural exchange volunteers sorting lemonsThis photo was taken within the last month by a “cultural exchange volunteer” at GGC. Johnson is on the right, showing a peace sign to the people he’s scamming. Last we knew, SII, the Chilean version of the IRS, was prohibiting Johnson from selling lemons due to his flagrant violations of tax law. We wonder what SII will do when they see this pic.


Idyllic, ain’t it? But wait, there’s more…

“I am fairly new to the [cultural exchange] program, and have had a lot of inquiries. Myself and our full-time workers here have met some really nice people whom [sic] have come to stay with us and are staying with us now. It’s wonderful to meet people with a passion for organic food, thoughtful living and an eagerness to help others who share these passions. [Lay it on thick, Li’l Kenny.] I’m not the most organized person with the [cultural exchange] program so far, but we have some great [volunteers] who have stepped up to help others out when they arrive and also with finding the right things to help out with while here. I’m a believer in ‘the more, the merrier’, and tend to be a bit of a wall flower in larger groups, as I tend to generally just soak up the atmosphere and chill after a long day of dealing with architects, attorneys, produce buyers, errands, and more. I guess most ‘introverts’ can relate to this.”

Let’s translate for our little wall flower. He gets between 20 and 30 suckers at a time to come to Lepe, tells them generally what he wants done and then disappears to drink and watch internet porn while they work. These volunteers even do all the cooking and cleaning, picking the veggies for their meals from the garden that’s the result of the work of previous suckers–oops! we mean volunteers. We guess most introverts can relate. We know all swindlers can.


before and after signs to hide GGC fraudJohnson likely removed the Galt’s Gulch Chile sign at the entrance to the Lepe farm to make sure that the “volunteers” don’t do an internet search and stumble upon his fraud.


We’ll spare you the part about Johnson’s often mentioned plans for an animal sanctuary. It brought tears to our eyes.

In reviewing the exchange’s website, we found that their terms and conditions explicitly state their program is for cultural exchange only:

“[Our website] is NOT set up to provide or replace employment opportunities. We will remove hosts that we deem are not providing cultural exchange or educational possibilities.” [Emphasis theirs.]

At the same time that FCF Johnson has all these ‘volunteers” not only performing farm work, but also apparently renovating the various buildings that he left in a shambles, he has NOT been paying the few Chilean workers who are left at the farm.

Here’s more from Johnson’s ad:

“Any [volunteers] interested in taking on, or creating, a project that fits their life goals, career skills, or dream job, are welcome to talk with me and create a new project for the farm, eco-tourism, hospitality, bio-diversity, marketing, etc. I’m a firm believer in those who put their heart into something being rewarded from and for it…and who knows…maybe you will want to stay and create your own business here, based on taking care of our environment, growing great healthy food, teaching others, etc.”

Rather than a cultural exchange opportunity, this sounds like a con man using every fad currently  in vogue with first world backpacking types to try to sucker these well-meaning people into being his slaves. Unfortunately, it appears to be working.

Clearly, this exchange website did absolutely nothing to vet Johnson, including review his ad which violates their terms and conditions. They certainly didn’t verify his ownership of the farm–since he doesn’t own it, how could they? To be fair, a determined con man, which of course FCF Johnson is, could easily fake documents. Nevertheless, a quick review of his ad should have made them concerned.

The cultural exchange program’s terms and conditions also state that “all the hosts agree to maintain and update information in their account making sure it is accurate and truthful and complies with the laws of their country.” Since Li’l Kenny didn’t hold up this part of the agreement, we thought we’d help him. You know, he is really busy with lawyers and architects. We contacted the website to inform them that:

  • Johnson is a con man who defrauded 73 families of $10.45 million,
  • he’s squatting on the farm, i.e., he’s not the owner,
  • he doesn’t pay his Chilean workers,
  • he didn’t pay his American workers,
  • he doesn’t work with the volunteers, according to his own description and some volunteer comments. They appear left to their own devices,
  • there’s no cultural exchange to speak of with Chileans, and
  • he’s likely violating multiple Chilean laws–immigration, labor, social security, tax, etc.

 They removed his host page. 🙂

Coward Johnson's new logo Btw, we took the liberty of contacting all the other online exchange programs to inform them that FCF Johnson may be applying for host status now that his current situation has ended. They are on the look out for him, including under pseudonyms.

Maybe we should have a contest. Who can correctly predict Li’l Kenny’s next scam? We know there is one. As Professor Harold Hill said to Winthrop in The Music Man, “I always think there’s a band, kid.”

FINAL NOTE: We did not disclose the name of the “cultural exchange” website since we felt that their blocking Johnson was really stand-up and didn’t want them to suffer any negative publicity. That has now changed.

About one month after having his host page taken down, Johnson submitted a new host page under a pseudonym. We were checking for this and identified his new host page immediately and contacted the cultural exchange service asking them to block him again. Either they are terribly naive or in cahoots with Li’l Kenny Fraudster, because try as we may, we can’t convince them that this new host is in fact Johnson.

The website is Workaway.info. They are violating their own guidelines, supplying free labor rather than a cultural exchange, and aiding and abettng Johnson in violating multiple Chilean laws. They clearly don’t care about the safety of their volunteers since they have no problem connecting them with someone who has committed assault on his co-workers, someone who hired Mafiosi to terrorize Chilean workers.

You might want to contact them and tell them what you think of them. http://www.workaway.info/contact.html

Galt’s Gulch Chile Victim Psych: Curacaví Dreamin’?

We were listening to The Opperman Report the other day when we heard this GGC relevant observation:

Now, one thing that I’ve learned, in my work as a private investigator, especially now on the internet, I deal with a lot of people who get conned out of their money. Especially in these romance scams. I just had one woman recently, this woman contacts me and she says, “Ed, you know, I met this guy, he lives overseas, and he wants to send me a car. He told me to give him my bank account number so he could wire me some money. He never wired me the money. He said he’s sending me a car instead. Now I’m getting calls from this car transport/storage place, they want me to send them money or they’re going to charge me storage for the car. I never asked for this car.”

So I tell these women, I say, “Well, listen. First of all you’ve got to close that bank account, because now he has your bank account number, he can print out a check. Secondly, you need to make a police report. And don’t send these people any money. Stop communicating with this guy.”

So even though I tell them this, man, and they say, “OK, I did, I did, I did….”

“OK, so who did you make the police report with? I want to talk to the cop you made the police report with.”

“Oh well, I didn’t really make a police report.”

“OK, did you close your bank account?”

“No, I didn’t really close the bank account, but the bank is watching my account. They’re monitoring my account for me.”

“No they’re not. So, did you close your email account? Are you still talking to this guy?”

“Yes, I’m still talking to the guy.”

Because victims of con artists, they want to believe. They want to believe it’s true.[end]

We have found this phenomenon with future convicted felon Johnson’s victims, too. More than one GGC investor, when contacted by the Recovery Team, were angry at us for telling them they were conned, and defended Johnson. We believe they were angry because we were interrupting their dream. Despite the crazy, invalid contracts, lack of communication, missed land and loan payments, nonpayment of dividends, stiffed employees and vendors, the Rio Colorado scam, no zoning approvals, the total lack of any progress in building anything they still wanted to believe GGC was all true.

One of these investors was, of course, our dear friend, Jerry Folta. He accused us of name calling, lying, libel and having a hidden agenda. All the other investors looked at our evidence and came to their senses, but not Jerry. To this day, he is supporting fcf Johnson and claims to have paid him an additional wad of cash over his initial “investment.” Ugh.

Here’s another Opperman insight from that same podcast:

Now, one of the things I know about con artists is that when they are scoping out a target, when they are scoping out their victim, what they will do is, in the beginning, they will make a claim that is so outrageous, and so unbelievable, and if you don’t call them on it when they are saying that, now they know they’ve got a victim. Now they know they can walk all over you.

This also fits our friend Jerry. Jerry thought he bought a 25-acre lemon orchard with a “hacienda.” Having seen the marketing literature for that “investment”–and the “hacienda” (see blog post ”Capital Improvements: The Shacks—Oops, We Mean Haciendas—of GGC“)–we know that fcf Johnson was making “a claim that was so outrageous, and so unbelievable” that we’ve often said we wish we had the good luck to see that offer(see here, here and here) before we threw our money away on GGC. Even more amazing is that Jerry, well before the lemon orchard scam, caught Johnson trying to cheat him with an outrageous, unbelievable contract. In Jerry’s own words:

I was considering buying in and I asked Ken to send me the blank contract. As I carefully went through it I couldn’t believe what I sign here suckerdiscovered. I had to turn the pages back and forth several times to wind through the legal paths in the contract but it clearly spelled out that once GGC sold me the property it could unilaterally decide to buy it back and, then, set the price at anything the General Manager (Ken Johnson) wanted – even $.01. I immediately thought, “He’s trying to screw me!”–Jerry Folta in an email to GGC investors, Oct 2 2014.

So why did he go ahead and enter into a contract with this obvious swindler? Jerry decided that since Johnson was willing to change the terms of the agreement, this wasn’t fraud, it was just Johnson following bad legal advice. (!?!) We are NOT making this up. We fancy ourselves as amateur comedians, but we’re not that clever. Here’s more from the same email:

I rewrote the offending portions of the contract in a way the original language was left intact but deletions/additions/changes were made in red so it was clear what I wanted to change. I also included what I described as written “rationales” for the changes I was proposing so he would understand why I wanted the changes and could better determine if he agreed the changes were fair.

After a couple days rewriting Ken and I went through the revised contract start to finish. With explanation and discussion it took a good while and at the end I waited for the verdict. After a brief pause Ken said, “Ok.” Not a single modification, not a single change, not a single objection to what I had written.

The conclusion I came to was the attorneys wrote the contracts as attorneys are wont to do; with as much protection as possible for Ken since he was the one paying them. Attorneys are usually not businessmen and the unfortunate way it came out under those circumstances was not appreciated by Ken. Also, the contracts were written in spanish [sic] and translated so both culturally and linguistically there is a great deal of uncertainty built into the situation. Still, once Ken saw my suggestions he immediately accepted them and, in fact, made it clear on several occasions afterward that he appreciated what I did because the work I contributed made GGC better – especially for other shareholder investors. Although it’s easy from the sidelines to fault Ken for not doing a better job of managing the attorneys, in a project this big, this ambitious, this undeveloped – these types of situations really should be expected to occur on a daily basis.

Seems clear to us that Jerry really wanted to believe, and fcf Johnson absolutely knew he had a helluva sucker on the line. Coward Johnson's new logoBy the way, we’re always skeptical of the veracity of Folta’s retelling of the “facts” surrounding anything to do with Johnson, and certainly of his estimation of Johnson’s motives. Besides the obvious, that the information is second hand, passed from a congenital liar through a possible true believer,  we happen to know that these two collaborated on Folta’s tedious missives. How do we know? Because Jerry sent the following email message by mistake to the Recovery Team after he received one of our GGC Investor Updates:

Subject: Re: GGC Investor Update Nov 15 2014
From: Jerry Folta
To: Cathy Cuthbert

Ken:

Do you want to talk about a response to this?  If you’re going to reach a settlement soon it’s probably not necessary.  If we’re still fighting the good fight perhaps I should respond.

What do you think?

Jerry

Ja, ja, ja. Continuing an affinity fraud is “fighting the good fight.”

One final note: Johnson’s Chilean lawyers, fluent in English, said that Johnson wrote the contracts. His firm was asked to review what Johnson had written, usually at the last minute and sometimes after the contracts were signed. (!?!)

Li’l Kenny Lies about Damages at GGC Farm

pinocchioFuture convicted felon Johnson loves to take to social media and accuse the GGC Recovery team of “causing damages” and “looting” the Lepe farm. Sometimes we supposedly stole and/or damaged $1 million worth of we don’t know what, sometimes it’s $500,000. He has made videos with similar accusation that you can view at his GGC website.

His videos are a real hoot. In one, the most he can do is claim that there are damages [sic] to a rubber tree. We pruned it–oh, the horror! In another, he and Ramirez wander around the hacienda front yard talking about missing peacocks. In a third, he shows shots of the drained pool at GGC.

These trivial accusation–we hesitate to elevate them by calling them accusations, let’s just say trivialities–are all false and pale in comparison to the $10.45 million he has misappropriated or outright stolen from us investors.

The only charge to which we care to respond is that we stole property from the farm. In fact, we did no such thing. During our six months managing Lepe, registered legal documents showed that Mario Del Real was the chairman of the board and controlled the ownership of Inmobiliaria Galt’s Gulch, the real estate holding company, and that his daughter was the general manager. These are facts that Johnson has admitted.

In late October 2014, we asked Del Real’s permission to run the farm and he granted it. We then paid the back wages and payroll benefits of the farm workers that Johnson wouldn’t pay, and continued operations.

In the links below, we provide the spread sheets that the farm managers created and used to detail all the money earned and spent from November 2014 to April 20 2015. You will see that, not surprisingly, the majority of the expenses were for wages.

Income and expenses Nov 2014
Income and expenses Dec 2014
Income and expenses Jan 2015
Income and expenses Feb 2015
Income and expenses Mar 2015
Income and expenses Apr 2015

The Lepe farm is not profitable. The previous owner, Ramirez, neglected it for years. The trees are stressed from lack of water and from mineral deficiencies. The orchards produce only about one tenth of what a healthy commercial orchard would. In addition to the problem of poor yields and therefore pitiful income, we had ongoing expenses for repairs to the irrigation system that is aging and needs to be replaced, and for the replacement of a transformer that was stolen for the second time just before we took over operations. This transformer powered the pump for the main well.

It took approximately $23,000 per month to pay the employees and keep the lights on. This did not include the salary of our supervisor, Ken Carpenter.

Because the farm is unprofitable and the harvest for the period in question was slow in coming, we were forced to sell chattels from around the premise to pay salaries. These sales are in the above reports and total CLP $20.349.560 or approximately $34,000.

So, the Pinocchio of GGC was, as usual, off by more than an order of magnitude in his lie about how much money was raised by our selling the junk lying around the farm.

If you wanted to give future convicted Johnson the benefit of the doubt, you may have thought that he was in good faith trying to make estimates of these sales. You would, of course, be wrong. Since he took back the farm, he’s had access to all the farm records. Not only does he have these very spread sheets that you see linked on this page, he has all the original receipts, as well.

We really don’t care about Johnson’s lying posts on Facebook. We wonder why he does? We are sure the prosecutors and judges in his criminal trials won’t be swayed by this type of nonsense.

fgc logo with kj

 

Latin American Agriculture: The Trendy Investment Newsletter Reco

When everybody’s recommending a sure-fire investment opportunity, we should all be smart enough to run. Too bad we GGC “investors” weren’t. 🙁

The Lepe property has a working 100 hectare agricultural area with lemon lemon bins 2orchards and 7ish hectares of dead and dying avocado trees. This allowed Johnson to jump on the trendy Latin American agriculture investment bandwagon with his orchard and farm share program.

He proposed to subdivide the existing ag area into five 10 hectare lemon orchards and one 50 hectare plot. The smaller orchards were sold to individual investors, while the larger area that included lemons and dead avocado trees as well as uncultivated fields were to be deeded to a Johnson-owned corporation, Agricola y Comercial Galt’s Gulch SpA. Johnson would then sell shares of Agricola to investors, with a contract to manage the orchards for a percentage of the lemon profits, the remainder paid as a  quarterly dividend. The revenue was to go to improving the existing infrastructure and expanding the hectares under cultivation–remember all that excess water.

Read the projections for this farm venture here, here and here. (Split into three sections due to size.) This whole document is worth reading, but one of our fav parts is Johnson’s bio:

“Ken Johnson, GGC managing partner, has an extensive background in the fields of  real estate, alternative medicine, and the environmental and Enviro-Johnsonrenewable energy industries. Mr. Johnson has worked with numerous high-profile Hollywood celebrities, such as Jay Leno, Ed Begley Jr., Larry Hagman and others on television and internet projects to educate the public and brand product lines in the environmental industry. He has worked as a consultant in real estate, renewable energies, asset diversification, investing and relocation around the globe.”

That’s quite impressive. Let’s see if we can decode that paragraph.

“Ken Johnson, GGC manager (currently squatter), was a flunky California real estate agent, who lost his shirt in the collapse of 2007-8. He’s read up on vitamins and now lives on a steady liquid diet. His gig prior to GGC and The Dollar Vigilante was with Enviro-Energies, where he fleeced unsuspecting customers by selling windmills that didn’t work. As part of the windmill scam, Johnson had his picture takenswann circle with Hollywood celebrities who were more than willing to lend their names without checking into the corporation first. (Sound familiar?) Chased out of California due to bankruptcy and tax problems, Johnson took up selling fraudulent passports, most notably in Paraguay, aka ‘consulting in relocation around the globe.'”

Read the FBI press release about Enviro-Energies and you’ll see where Johnson cut his teeth in the scam industry. Johnson’s KJ handcuffsbusiness plan with Agricola looks eerily similar to Rowan’s. The Agricola “prospectus” is a stream-of-consciousness irrelevancy that in and of itself may constitute fraud.

Johnson thought he couldn’t wait for the subdivision approvals to be completed before he started selling Agricola shares and orchards. He had an aggressive payment schedule to Guillermo Ramirez for the Lepe purchase hanging over his head and needed the money.

All the 10 hectare orchards sold, but only 30% of Agricola shares. Not many financial advisers would recommend buying shares in a kj contractcompany that owns nothing. The revenue from the farm program went to Ramirez to purchase the Lepe property, and to Del Real who pocketed the bucks. Virtually nothing went to upgrade the farm.  To our knowledge, Agricola stock was never delivered to the share buyers, and the only dividends paid were to the few people who bought shares on crypto-trade.

Agricola remains a paper company, i.e. no assets.

We were listening to Johnny Mueller’s Expat Files recently. He gave his opinion on Latin American ag investments. He said that theft will be a problem, and we can tell you he is absolutely correct. While at the farm, we witnessed the farm manager catching the pickers stuffing backpacks, pockets and truck compartments with lemons to smuggle them off the property. We calculated they were stealing at least 10% of what they harvested. The managers also told us that the trees along the highway are regularly poached.

So maybe that fantastic mango orchard in Panama projected to return 18% isn’t such a sure thing. And neither is a lemon orchard in Chile. *sigh*

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By the way, Johnson did finally submit his application to subdivide the ag area. This was a straight forward process because it didn’t require a change in land use. The subdivision was granted within about two weeks and cost approximately $5,000. He did this as a public relations measure after we investors went public with his perfidy. He trots out this approval as proof he can accomplish something. Of course, it says nothing about achieving the residential master plan which was rejected when first submitted. Further, he has yet to transfer title to the orchard lots to the investors and Agricola. Do you think the transfer tax might have something to do with that?

 

Rio Colorado: The Con Man Got Conned

“I received the update Cathy Cuthbert sent out a couple days ago showing a preliminary contract between Ken and Mario Del Real for a company named “RIO COLORADO MINING AND EXPLORATION INVESTMENT COMPANY S.A.” This contract was never finalized but what’s important is it was to be a private agreement between Ken Johnson and Mario Del Rio. In my mind this is like looking at Ken’s dental records – perhaps mildly interesting but none of our business. As majority owner of Inmobiliaria Galt’s Gulch S.A. Ken has every right to sell his shares to anyone at any time for any purpose.” –GGC Investor Jerry Folta, in an email to GGC investors, November 2014.


The swindler was swindled; the scammer, scammed. GGC’s estafador had his stash filched. A sleazier sleaze bag absquatulated with a millJohnson empty balloon rightion bucks, all the shares, and the office furniture, too. Are we to be spared nothing?

Oh, the humanity!

Mario Del Real is a Chilean businessman (some say loan shark) brought into GGC by Johnson as a “fixer.” When their relationship began, Johnson’s bank account had been blocked due to non-compliance with the know-your-customer regulations. He needed a way for GGC to receive funds from investors and Del Real agreed to let him use his daughter’s personal bank account for that purpose.

Del Real convinced Johnson that he had gotten poor advice from his lawyers and that he could help him with various legal documents and with obtaining subdivision permits. He further advised Johnson to put himself and his children on the board of directors and to give the position of general manager to Del Real’s daughter, Pamela. John­son then sold 30% of GGC shares to the Del Reals and later increased their ownership to 50%. This second sale was for peanuts–$1.82/share making the IGG total valuation $18,000.

Ironically, the equity investors had been agitating for months for Johnson to fill the board of directors with investor representa­tives and to give them the equity in the project that he was con­tractually obligated to give them. What he denied his investors, Johnson gave to this Chilean crook.

The big heist occurred when Del Real sucked Johnson into a trap with his own company, Rio Colorado. This company owns a prop­erty called Los Andes, supposedly valued at $16 million being blessed with glacial waters for which nearby mining concerns would gladly pay millions of dollars per month, or so the story went.


Andean glacier, chile


At first, Johnson agreed to buy 51% of Rio Colorado for $8 million dollars; $8 million of which he did not have. (See here for Spanish, and here for English.)The money was to come from Rio Colorado water revenue. When that looked like it wasn’t going to happen, Johnson claims he cleverly proposed a stock swap between himself and Del Real—51% Rio Colorado for 50% GGC. (Chirgwin investigated the swap and provided the GGC Recovery Team this report.)


“[B]asically my first deal with Mario was for eight million cash, you know, eight million and some change. We were having dinner one night and I said, ‘You know Mario, I’m just going to pay you out of the water revenue. You know, you’re helping, you’re doing a lot of work for Galt’s Gulch and you’re helping out a lot. We can renegotiate the dollar amount and you can take the equal amount of shares I have in Galt’s Gulch,’ and that’s how it came about.” –Ken Johnson, June 29  2014, reminiscing over his dental records.kj contract


Of course, Johnson’s 100% ownership of GGC was fraudulent. He had a partner in Jeff Berwick and four equity investors who together should have had approximately 62% of the IGG, and Ramirez was given another 3%. No matter, Johnson signed the swap agreement that he didn’t understand since he hadn’t consulted his own legal adviser and cannot read Spanish. In addition, he convinced three GGC investors to pony up $100,000 each for their share of this sure thing.

We still don’t know exactly how much money changed hands along with the stock swap. We were told by two Chileans that at the signing of the swap agreement on April 15 2014, a backpack of $350,000 in cash was delivered, and that a second delivery of $250,000 in cash was made shortly thereafter. Further, Johnson was caught on a recording saying that he paid Del Real “about half a million bucks or whatever that total is.”

Let’s put this information into perspective with the GGC timeline, shall we? April 15 2014… Hmmm… Now, why does that date sound familiar?

Oh yes, that was right around the time Johnson was supposed to make the final $2 million payment to Ramirez for the Lepe purchase. Instead, he extended the final payment to Aug 15 2014, paid or accrued (we don’t know which) another late penalty to add to the over $1 million in fines he had already paid, and pulled off a killer deal for a mere $500,000–or $600,000 or whatever that total was–for a “shit load of value” in Andean water.

Those GGC investors bamboozled by Johnson to “invest” in Del Real’s pipe dream contributed $300,000. So where did the second KJ handcuffs$300,000 in cash come from? Likely it came from the same place that all of Johnson’s money came from since November 2012–us investors, from GGC, from the final land payment.

We know from our wire receipts that approximately $1,000,000 went into Pamela Del Real’s bank account and where it went after that, we don’t know. We have heard that former developer Johnson said on several occasions that the MDR handcuffsDel Reals stole it, or some portion. Further, we have documents showing that $120,000 was diverted from two GGC investors through Pamela Del Real’s checking account to Rio Colorado, authorized by Pamela’s signature. (One of these investors filed a criminal suit against Del Real in Chile on May 20 2015 for that theft.)

To add to the miasma of deceit, we’ve been told by a reliable source that Mario Del Real claims he received only $140,000 from former developer Johnson for Rio Colorado. But wait! in the farm office, the GGC Recovery Team found a piece of paper that appears to be Del Real’s accounting of former developer Johnson’s cash payments to him for those very valuable Rio Colorado shares. There were six payments totaling nearly US$280,000 en efectivo—that’s español for cold, hard cash. Del Real also claims he has documentation showing that he loaned CLP$35,000,000 (US$65,000) back to GGC.

According to Johnson, once the Del Reals were in place as the management of GGC and the GGC/Rio Colorado contracts were signed, Del Real blocked Johnson from fulfilling the contract requirements.


“[Del Real] interlocked the contracts which I told him I didn’t want to do, but he did, and basically the payments on Rio Colorado include the share issuance to him of 350,000 shares of Galt’s Gulch Chile, of Inmobiliaria, which equates to 35% of the company. And that’s fine, that’s what we agreed to, but I can’t make that issuance because his daughter and him (sic) are refusing to put the shares into my name like we agreed, because that’s not in the contract. So he’s basically trying to hold me hostage.” –Ken Johnson, June 29  2014. Uh, oh. Looks like a cavity in the #2 molar.


However, according to Del Real by way of lawyer Chirgwin, Johnson missed a $206,000 payment, and also breached an obligation to deliver bank bonds, both part of the swap agreement. Because of this non-payment, Del Real refused to complete the transfer of the shares to Johnson.

For whatever reason, as is stands now, the Del Real family is listed as the owner of record of 99+% of GGC, Del Real is the Chairman of the Board with his children as fellow Board members, his daughter, Pamela, is general manag­er and Johnson is out of luck, as are the GGC investors.

Johnson claims that all the documents giving ownership and control of GGC to the Del Reals are either forged or tampered with in some way, but his explanations are vague. We suspect that in many if not all cases, there is another explanation.


“What the fuck are you talking about, dude? You’re the one who drafted kj no hablothese agreements, I didn’t even… I hardly know what they fuckin’ say, for Christ’s sake.”

“Hey, your attorney, this is what they represented to me: I signed the contract, taking them on their word, I don’t know what the fuck I signed ’cause it’s in Spanish.”

–Ken Johnson, June 2014, recounting his conversation with Del Real about the Rio Colorado contracts. Root canal coming right up.


As we’ve said before, Johnson did not seek competent legal advice y no habla Español. Qué lástima. Qué horror. KOed.

The details of what really happened, we don’t know. How much money changed hands when? We’ve seen no evidence and likely there isn’t any. That’s what paying with large quan­tities of cash without receipts gets you. Don’t think that Del Real isn’t fully aware of this. What we do know is that three investors paid $100,000 each, two others had $120,000 diverted and none of them has anything to show for it–Johnson’s leitmotif. Where is the money? With Del Real? With Johnson? ¿Quien sabe?

By June 2014, Johnson was once again in danger of his fraud being exposed. In his panic he turned to investor Josh Kirley to bail him out, asking him to pay $1 million to become the proud owner of Rio Colorado shares–a payoff to Del Real to give over ownership and control of GGC. Josh wisely refused, then went public with Johnson’s perfidy.

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Oh, by the way, you might notice that if Johnson hadn’t brilliantly negotiated crippling late penalties that ended up costing over $1 million and hadn’t cleverly given the Del Reals access to $1 million of investor funds, he would have had $2 million for the final land payment. But, then, he wouldn’t have had nearly as much high rollin’ fun along the way. 😉

Final interesting note: Pamela Del Real is only 26 years old. Quite a tender age to be the General Manager of a multi-million dollar real estate development, and convicted of embezzlement, ain’t it?

The Dog Lover Who Kills Puppies

The following is an excerpt from Terence Gillespie’s book, The Creature from Galt’s Gulch Chile. Go to his website, McGillespie.com, to download your copy.


Introduction

All You Need to Know about Galt’s Gulch Chile

My flight landed a day late, Wednesday November 5 at 2:00 am Santiago time. I don’t know how they knew me because we had never met, but Kenny Carpenter, the most successful salesman for Galt’s Gulch Chile (GGC), and E.J. Lashlee, an adviser to several GGC investors, waved to me as I exited la aduana. We found a place to sit in the all night coffee shop upstairs and talked for three hours as they filled me in on the events of the prior few days.

I had flown to Chile to oversee the next phase of Galt’s Gulch Chile. We investors had been demanding that the developer, Kenneth Dale Johnson, resign. After months of his insistence that he wanted out yet refusal to get out, investor Tom Baker and E.J. went to the property to help him speed up his time table. They were successful, at least to a point.

E.J. caught a flight home while Kenny and I made our way to the ggc peacockGGC farm, outside the small town of Curacaví, an hour’s drive from Santiago. We entered the gate just as the sun was rising over the mountains surrounding our little valley. I spied peacocks in the front lawn strutting for their mates, as three utterly emaciated dogs with barely the energy to wag their tails crawled up to the car to meet us. Kenny told me they had been abandoned on the property. I was too tired to care and went straight to bed.

Several days later, I learned that these emaciated dogs were what was left of a litter of five pups abandoned several weeks prior to our take over. Maybe the owners had heard that Johnson was a great dog lover and was running a sanctuary, or so he said. Or maybe they were left there because that’s what happens in the country. They were in good health when given over to Johnson’s tender mercies. He proceeded to let them slowly starve, while he pampered his own dog with salmon dinner every night. We found the rotting bodies of the other two puppies in the orchard.


ggc puppy

One of the survivors from the starved litter. This female needed over $100 of veterinary attention and medication. She barely survived Johnson the first time, we wonder if she’ll survive him the second.


That was my welcome to Johnson’s world. It’s a world of half renovated buildings, unkempt gardens, filthy living quarters, unpaid employees, stiffed shopkeepers and dead puppies. He’s a helluva salesman, but he delivers broken promises and shattered dreams. Lies and deceit are his stock in trade.

The dream he sold us was Galt’s Gulch Chile, a proposed residential community to be built near Curacaví, equidistant between Santiago and the Pacific.The original principals were John Cobin, Germán Eyzaguirre, Jeff Berwick, and Ken Johnson. However, through a series of broken promises, broken contracts, and fraudulent maneuvers, Johnson gained 100% ownership and control of the project.

Cover_GGC (2)Johnson proceeded to develop not a community, but an affinity scam aimed at Western libertarians. He employed deceptive selling practices, violations of Chilean and US law, multiple bank accounts, and multiple jurisdictions to defraud his investors of US$10.45 million. He enriched himself by using investor money to fund his lifestyle.

In April 2014, Johnson was himself defrauded by a Chilean con artist named Mario Del Real, who took ownership and control of the real-estate holding company for GGC. Also, due to his mismanagement and fraudulent dealings, the flow of investor funds into the project collapsed, making it impossible for him to pay the final installment for the parcel which was to be the main building site.

On October 24, 2014, Tom and E.J. went to the GGC farm to have talks with Johnson. They hoped to convince him to leave the premises and turn the project over to an investor group. Johnson was not present when they arrived. They were let in by the night watchman who then called Johnson.

Arriving some time later, Johnson sent his thuggish lackey, Ian Thornton, to physically assault E.J. Thornton’s attack was easily turned aside with no injuries. During these events, Johnson was where he should be now and forever–cowering in the bushes. He then abandoned the property to the investors who, from late October 2014 to April 20, 2015, maintained the farm.

On April 21, 2015, Johnson sent four thugs to terrorize the employees at gun point in his cowardly take back of the farm. He is now squatting there, spending his time writing libelous reports about the investors and former employees, taunting and threatening them with legal action and making aimless videos of the GGC hacienda. He claims to be moving ahead with plans to develop the community. I don’t know anyone who believes him.

The only positive attribute I can determine about Johnson is that he is clever. He peppers his false statements with elements of truth to confuse people. Since the GGC situation is rather complex and he has hidden many details, even some of the investors are confused.

All you need to know about GGC to sort out the good guys from the bad guy is that $10.45 million was sent to Johnson for developing a project, yet we have nothing to show for it. At the time of this writing, October 2015, the investors do not have title to the residential lots, orchards, or shares of Agricola GGC, the farm operating company, for which they paid and that Johnson agreed to deliver. Loan payments to GGC investors have also not been paid. In addition, the titles to two GGC companies and the two parcels that were to become GGC are clouded. The project is insolvent.

A real estate agent in Chile told us, “I could have developed two communities with that kind of money.”

Even though this really is all you need to know, we’ve written this book to cut through the miasma of deception draped over the GGC project, as Johnson desperately tried to obscure his utter Batman_Villainsmismanagement and compounding fraud. It may be surprising that this is not simply a story of a gringo cheating other gringos set in Latin America. It’s a story reminiscent of a Batman comic book, with multiple Chilean villains joining Johnson in his plot against the investors to steal their money, including an out of office politician, a retired, conniving businessman, a loan shark, crooked notaries, and incompetent lawyers. At times it seems to us investors that swindling Americans is the Chilean national sport. We hope that this book will prove useful to investigators, journalists, expats and expat wannabes who are sure to need a guide.

While the GGC story is still unfolding in the courts of Chile and the United States, the one thing of which we feel most certain is that the final chapter will take place in the slammer for Kenneth Dale Johnson.

Cathy Cuthbert, GGC Recovery Team
San Luis Obispo CA

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