Category Archives: Johnson’s Lies

The Cantwell Interview: Johnson Cornered

“If someone lies to me once, I’m done with them because if they lie to you about one thing, they’ll lie to you about hundreds of things or thousands of things.”
–Congenital Liar Ken Johnson on the Radical Agenda podcast with Christopher Cantwell

Here’s the podcast link where Christopher Cantwell interviews future convicted felon Ken Johnson, a must-listen for all GGC aficionados:

Radical Agenda EP032 – The Libertarian Bernie Madoff

Quick background. Even though the title “The Libertarian Bernie Madoff” applies more to Johnson than anyone, Cantwell had set his sights on harming Jeff Berwick due to some personal grudge or other. cantwell 2*Eye roll.* Johnson expected to have a high ol’ time with the both of them raking Berwick over the coals, but the interview quickly took a wrong turn for Johnson when he became the one in the hot seat.

Johnson had spread around a video of Berwick talking about a questionable passport program in Mexico that he was marketing. Johnson criticized Berwick for possibly not delivering on the passports and not refunding the money. Being a great humanitarian, Johnson claimed that he was worried about TDV Passport clients who may have gotten fraudulent passports that could land them in jail. How kind of Johnson to warn everyone.

We found out about the interview several days in advance and supplied Cantwell with some relevant information showing that not only had Johnson run an identical passport scam in Paraguay, he also didn’t get passports to some of his clients and didn’t refund their money.

Yes, we know you are shocked to hear this, but the flaming hypocrite of a scoundrel, Johnson, did the exact same thing in Paraguay. Some how we doubt he was crying any tears for the people he ripped off or put in harm’s way.

terence circleCantwell was a bulldog. He was joined by GGC investors’ friend Terence Gillespie calling in after about an hour. Together they didn’t let Johnson explain any of this away.

Cantwell then changed the topic to GGC. This was unfortunate because GGC is a much more complex situation and Cantwell wasn’t prepared. Most of Johnson’s lies went unchallenged. Nevertheless, the host and Terence did an excellent job of catching Johnson in three more whoppers.

1. Johnson acted as if it’s normal and above board that he ended up as the 99.9% owner of GGC. Johnson contributed not one thin dime while the investors paid in a total of $10.45 million, but he claims this situation is completely understandable. Clearly, he used fraud to obtain his 99.9% control of the GGC corporations, as Cantwell alluded. See our blog post, When Is a Partner not a Partner?

2. Johnson has been living off the investors for three years. He may johnson empty balloon 2or may not have received money from GGC Investor Jerry Folta last November–we have repeatedly requested proof of this with none forthcoming. Nevertheless, he is currently living rent free on a property that was bought with investor funds. He denied taking a salary, saying that he “took money against his salary” to obfuscate. By the way, the GGC Recovery Team has documented proof of Johnson’s hand in the till. See our blog post, “I never took a penny from GGC.”

3. Johnson said twice that The Recovery Team tried to stop him from talking publicly. Cantwell set the record straight, saying that we didn’t try to block his appearance on that podcast. Why would handcuffswe try to stop Johnson from talking? We gather important information for our criminal case every time he flaps his yap.

On his webpage, Christopher Cantwell says that he despises liars. Yet despite the four obvious lies that he expertly exposed, at the end of his podcast he said that he thought Johnson was not all bad. !?!

This inexplicable inconsistency aside, the interview was a big win for The GGC Recovery Team and GGC investors generally. Johnson’s dishonesty was laid bare for the world to see, and there were some excellent, on-the-record quotations for our upcoming criminal case.

Hey, Li’l Kenny, give some more interviews, please.

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By the way, Cantwell was a bit cranky that The Recovery Team didn’t call into the show. Well, we thought about it, but after doing some research on Cantwell, reading that his tag line is “Anarchist, Atheist, Asshole” with special emphasis on asshole, and noticing that he just loves to attack fellow libertarians, we decided to take a pass. Besides, Johnson was doing the heavy lifting for us all by himself.

(Cantwell has changed his tag line, but maybe not his personality.)

I Never Took a Penny from GGC

All of us investors in GGC have heard Li’l Kenny Johnson say time and again that he never took a salary from GGC. Other than maybe GGC Investor Jerry Folta, we don’t know anyone who believes it. But Li’l Kenny having read Goebbels when he was a kid keeps saying it over and over, “I never took a penny from GGC.”

We won’t bother going into all the stories of Johnson carrying a backpack full of cash, making huge cash withdrawals from the bank, stuffing cash all around the dashboard of the GGC Jeep or going to the casinos to gamble with our money. Let’s just look at his own words. On March 13, 2013 Johnson sent an email to his erstwhile partner, Jeff Berwick. He wrote:

“GGC has paid me about $10-12k, which is two months, or less, of pay. I am taking a $6k salary and writing off the condo [in Las Condes] as our office…”

Hmmm. “Writing off the condo…” We think we’ll leave that as the subject of another post.

In addition to the above smoking gun, here’s a conversation Johnson might not remember.

Josh Kirley: Now, you say you’ve been paid nothing. You literally haven’t paid yourself at any point during this…?

Ken Johnson: I did this year. I paid myself this year.

Kirley: Am I allowed to ask what you’re paying yourself?

Johnson: I paid myself this year…. ah… what was the total? about… about $60 grand this year, last year probably ….

Kirley: [interrupting] and is that…. does that mean you worked for free last year?

Johnson: I have contracts. I have notarized contracts. I just haven’t taken the money. I took some of the money this year, so…

Wow. This conversation occurred in June 2014. It looks like Li’l Kenny gave himself a raise, quite a hefty one at that–almost 70%. He must have been doing a great job.

Here’s another tidbit, this from the only accounting firm to work for GGC, for about 10 minutes since they weren’t paid. In the notes to the 2013 accounting statements we find this:

“There is no salary recorded for the manager of the company, but apparently Mr. K Johnson has been withdrawing monies as his remuneration. This situation should be regularized by the appropriate documents (contracts) and making the relevant taxes and social security payments.”

Tsk, tsk. It appears that not only is Li’l Kenny lying to us investors about not being paid, he was not paying his taxes, too. We are shocked to hear it, because in his interview with The Economist, he was quoted as saying, “We pay our taxes. We obey the law.” See for yourself:

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When Is an Investor not an Investor?

When he tries to make an investment in Galt’s Gulch Chile, of course.

Former GGC developer, Ken Johnson, makes a point of pretending that there are only a handful of investors in GGC. The rest are “clients.” The reason for this insistence might seem a bit of a mystery to outside observers, since it makes no sense. You’ll understand his subterfuge when you’ve finished reading.

First Round Founders Were Equity Investors.

Johnson accepted money from four families in what he called “The First Round.” He refers to these people as “The First Round Founders.” They were given a “Heads of Agreement” document to sign as a contract in which it was agreed they would receive an equity position in GGC. How that eventually shook out, or rather didn’t shake out, is a long story–nothing is easy when con man Johnson is involved. Be that as it may, the First Round Founders are agreed by all including Johnson to have been investors in GGC.

There is one other person, Jerry Folta, who Johnson refers to as an investor. According to Johnson, Folta paid him $250,000 for the promise of equity in Inmobiliaria Galt’s Gulch after Johnson was outed as a con man all over the internet. This was a private, unadvertised agreement, the details of which have not been verified. We assume that the two signed a promesa, a contract that has provisions that trigger with some future event. In this case, the future event is likely that Johnson gains uncontested ownership of shares of Inmobiliaria Galt’s Gulch.

Due to the dueling fraudulent actions of Johnson and his partner, swindler Mario Del Real, Johnson currently (November 2016) has uncontested ownership of only 0.5% of Inmobiliaria Galt’s Gulch. For more on that fiasco see our blog post, “Rio Colorado: The Con Man Got Conned.”

Johnson doesn’t seem like he’s trying very hard to  get the shares back, though. He’s had a slam dunk, air tight case of forgery against Del Real sitting gathering dust for two years now–the tell that reveals Johnson and Del Real are still partners in crime.

The Types of GGC Investors

So, we have four equity investors and one maybe-sort-of-one-day equity investor–good kj dunceluck with that.

Johnson says that everyone else is a “client” of GGC and has no claim on the assets.

Au contraire. A substantial number of the remaining GGC families made loans to either Inmobiliaria Galt’s Gulch or to Agricola y Comercial Galt’s Gulch, and obviously have claims on the project’s assets. Where we come from, someone who loans money to a business is by definition an investor in that business.

Further, when Johnson established the farm corporation, Agricola y Comercial Galt’s Gulch, that was going to make millions selling branded organic produce around the world, he sold shares in that company, too. He sold approximately one third of the shares to… wait for it… investors.

We are well aware that the people who put money down to buy a lot at GGC are not investors in any of the GGC entities. However, in keeping with common practice, we refer to them as investors, as well. These people also have a claim against GGC since they have not received titles to their lots.

Of the 73 GGC families, 34 paid solely based on their promesas for lots. The rest are investors in the GGC project to one degree or another, having bought shares in the GGC companies, holding notes from the GGC companies or, more often, both. (Many of these investors also hold promesas for lots.) While Johnson received  $1.4 million from the lot buyers, he owes $4.7 million to the note holders. In total, from the investors in the GGC project, Johnson received $8.65 million.

Therefore Johnson’s idiotic insistence on calling the investors “clients” is just that: idiotic. And the vast majority of money paid to GGC was for investment in the project. Moreover, all this is easily provable since the investors gave us copies of their contracts and wire receipts.

So, why, you might ask, does Johnson continue to lie about the situation? Because in his zeal to steal our money, he forgot one teensy, weensy, little detail: US federal securities laws.

SEC Regulations

To sell shares in a private company, one must comply with the SEC regulations. Here’s the link to an SEC FAQ on this very topic:

Small Business and the SEC: A guide for small businesses on raising capital and complying with the federal securities laws.

A quick perusal makes it pretty obvious why Johnson doesn’t want it Li'l Kenny's handcuffsto be known there were investors in GGC. Johnson did not register with the SEC, nor did he seek an exemption from registering, yet he publicly solicited investment from Americans. In addition, our interviews with the GGC investors revealed that Johnson never verified accredited investor status with the equity investors.

Here are a couple of choice sentences from the FAQ that should send shivers up Li’l Kenny Fraudster spine:

“…all securities transactions, even exempt transactions, are subject to the antifraud provisions of the federal securities laws. This means that you and your company will be responsible for false or misleading statements that you or others on your behalf make regarding your company, the securities offered, or the offering. You and your company are responsible for any such statements, whether made by your company or on behalf of the company, and regardless of whether they are made orally or in writing..

“The government enforces the federal securities laws through criminal, civil and administrative proceedings.” [Emphasis added.–Ed.]

Coward Johnson's new logo

Btw, it’s utterly ridiculous for Li’l Kenny Fraudster to continue this charade that we are all “clients” since he confirmed that the first four investors were equity investors, openly admitting his SEC violations.

In addition, we have it from someone who knows, it’s the advertising to Americans that is the trigger for the SEC to, shall we say, become interested in Li’l Kenny Fraudster’s GGC activities, and there’s plenty of proof he did that repeatedly.

Don’t you just love the wayback machine?

When Is a Partner not a Partner?

When he’s Ken Johnson’s partner, of course.

John Cobin and Germán Eyzaguirre identified a property, El Peñon, cobin circlethat they thought would be perfect for a real estate development. Through the libertarian grape vine, they discovered that Jeff Berwick and Ken Johnson were interested in starting a community and were looking for a suitable location. They connected to become partners in GGC, or so they thought…

Cobin and Eyzaguirre made a handshake deal with Berwick and Johnson where they would be junior partners and be paid for finding the property, incorporating an entity for holding title, arranging the purchase and being the developers. They were given powers of attorney by Johnson and Berwick to close on El Peñon.

We speculate that Johnson didn’t want to pay the agreed upon fee of $250,000 to his new partners. To that end, he cooked up a scheme to discredit Cobin that would convince Berwick to join him in kicking Cobin and Eyzaguirre out of the project, saving them big bucks.

Johnson accused Cobin of trying to sell El Peñon out from under them to another newsletter writer and real estate investor known as Simon Black. This accusation had an air of credibility since Cobin and Black knew each other and had done business together before. It was a lie, of course, but it did the trick. The dissension that ensued led to the original partnership of the four being dissolved, with no significant cost to Johnson.berwick at penon

That’s two partners down, and one to go.

Johnson proceeded to get a power of attorney from Berwick to incorporate the new GGC entity that would buy El Peñon.  Berwick assumed that he and Johnson were 50-50 partners, having agreed to that in another handshake deal. However, Johnson incorporated Inmobiliaria Galt’s Gulch SA excluding Berwick. Berwick’s name does not appear as a shareholder, as a director or as a manager in the new company document. See for yourself: Estatutos Inmob. Galts Gulch S.A. _3_  Johnson’s name, however, does appear in the Estatutos as the Primer Gerente, or General Manager. QED.

And that is how Johnson defrauded his three partners and took total control of Galt’s Gulch Chile without providing any capital.

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By the way, we recently called our friend, Simon Black. When we asked if it were true that Cobin approached him to buy El Peñon in October or November of 2012, his swift answer was, “Absolutely not.”

One more point: we are sure this is exactly what happened because Johnson threatened to use the same maneuver when he was entering into his second disaster of a real estate purchase, El Lepe/Las Casas.

The First Round Founders–the four equity investors–had just discovered, more than six months after paying Johnson, that the first property was essentially worthless to them. He warned one of them to side with him against Berwick in the partners’ feud or he’d incorporate a separate entity to hold title to the second property, El Lepe/Las Casas. They would have no equity interest in the new entity and therefore no claim on any of GGC’s profits. They would be left only with equity in the  problematic El Peñon that couldn’t be developed.

Ironically, they may have been better off if Johnson had gone ahead with that maneuver. The equity investors would at least have title to El Peñon where they could possibly build houses or that they could sell to recoup some of their loses.