Future Convicted Felon Johnson: No Insult, Just Fact.

When the shtf for Johnson and GGC last August 2014, The Recovery Team began an email newsletter to report on our forensic investigations and keep everyone informed.

In that newsletter, we have fallen into the habit of referring to former developer Johnson as “future convicted felon Johnson.” In a recent “Radical Agenda Show” podcast, host Christopher Cantwell referred to this habit as a mere insult. However, we use the term because our legal counsel in Chile, Francis Lackington, showed us early on that Johnson committed many counts of two felony violations while selling GGC lots. Here is what Attorney Lackington explained to us about the Urbanism and Construction Act in Chile:

“The law specifically covers the subdivision of land, including rules and restrictions to the subdivision of land outside urban areas (article 55 of LUC). It covers the rules and requirements for the urbanization of land (article 134). It contemplates the prohibition not to transfer or promise to transfer lots of land while the urbanization is not complete and approved (136). The obligation to constitute a bond for the performance of urbanization works in order to obtain an authorization to sell lots prior to urbanization (129). The obligation of developers to constitute a bond or insurance policy, and issuing contracts before a Chilean Notary, in case of promising to sell properties where the developer receives an advance payment from the buyer, up to amount advanced, valid until the property is actually sold and registered in the name of the buyer (138 bis). And, the penalization as a felony of ANY violation of the developer to articles 134 to 140 of the LUC (138).

“Based on the above, we believe that lots sold as residential lots with an urbanization obligation from the developer (as stated in the Founders Club Agreements) clearly fall under LUC. Lemon orchards are outside of LUC.”


Translation: for former developer Johnson to sell using promesas (a contract to sell real estate at a future time or with a trigger event such as subdivision) where he agreed to community improvements, he had to do two things:

  1. obtain insurance or a bond so that if the subdivision approvals weren’t achieved, he could refund his investors, and
  2. have the contracts notarized before a Chilean notary.

Violations of the Urbanism and Construction Act are felonies. Since former developer Johnson did not comply with either of these requirements, he is therefore a felon, and a felon soon to be convicted, hence the moniker “future convicted felon Johnson.”

Now, you might say, “Poor Li’l Kenny Johnson. He didn’t know about that nasty Urbanism law,” to which we reply, “Yes, poor Li’l Kenny. Orange is not his color, and a jumpsuit will make him look even fatter.”

Johnson screwed up royally by setting up shop without the knowledge or expertise necessary to execute on a real estate handcuffsdevelopment plan in Chile. We investors can’t help that. We have tried for more than a year through private emails, phone calls and face to face meetings as well as through our GGC Investor Update to explain to former developer Johnson that he is incapable of carrying out his business plan, that he’s in a lot of legal trouble, and that his best course of action is to turn over ownership and control of the project to the investors, as he many times has said he wanted to do, and let us handle this mess.

He has refused. Whatever happens next is his choice.

Sadly for everyone involved, we have determined through hard experience that the only way to remove Johnson is to pursue criminal charges against him. Many, if not most of us do not want to do this but we see no other way.

So “future convicted felon Johnson” it is–no insult, just fact.

NOTE: After Johnson’s interview, Cantwell told The Recovery Team that he knows there’s more to the GGC story than what came out in those two hours. He invited us to submit information that he said he would post to his website. We quickly forwarded him a version of the above blog post. He has yet to post it, or even to acknowledge receipt. Hmmm.

For further reference:

(a) Aricle 468 of the Criminal Code of Chile:

Art. 468. Incurrirá en las penas del artículo anterior el que defraudare a otro usando de nombre fingido, atribuyéndose poder, influencia o crédito supuestos, aparentando bienes, crédito, comisión, empresa o negociación imaginarios, o valiéndose de cualquier otro engaño semejante.

(b)Artículo 138° of the Law on Urbanism and Construction:

.- Será sancionado con la pena de presidio menor en su grado máximo a presidio mayor en su grado mínimo el propietario, loteador o urbanizador que realice cualquiera clase de actos o contratos que tengan por finalidad última o inmediata la transferencia del dominio, tales como ventas, promesas de venta, reservas de sitios, adjudicaciones en lote o constitución de comunidades o sociedades tendientes a la formación de nuevas poblaciones, en contravención a lo dispuesto en el presente párrafo.

(c) Law on Urbanism and Construction (for residential lots)

Artículo 138 bis.- Las personas naturales o jurídicas que tengan por giro la actividad inmobiliaria o aquellas que construyan o encarguen construir bienes raíces destinados a viviendas, locales comerciales u oficinas, que no cuenten con recepción definitiva y que celebren contratos de promesa de compraventa en los cuales el promitente comprado entregue todo o parte del precio del bien raíz, deberán otorgarlos mediante instrumentos privados autorizados ante notario y caucionarlos mediante póliza de seguro o boleta bancaria, aceptada por el promitente comprador. Esta garantía, debidamente identificada, se incorporará al contrato a favor del promitente comprador, en un valor igual a la parte del precio del bien raíz entregado por éste y establecido enel contrato de promesa respectivo, para el evento de que éste no se cumpla dentro del plazo o al cumplimiento de la condición establecidos por el promitente vendedor.