- Johnson gave power of attorney to Cobin
Purpose: to represent Berwick and Johnson for El Peñon purchase and sale.
- First Purchase contract for El Peñon
Seller: René Sarrazin
Buyer: Galt's Gulch Chile SA
- Berwick-Johnson gave Cobin powers of attorney
Purpose: to establish Galt's Gulch Chile SA
- Galt's Gulch Chile SA incorporated
Ownership: Berwick-35%; Johnson-35%; Cobin/Eyzaguirre-30%. All four named to the board of directors.
- Founders' Club Documents.
Marketing began. No prospectus, no disclaimers, no verification of accredited investor status. All four partners' background discussed in this literature. This is a must read because it may violate SEC regulations, and does not disclose material information, such as the fact that Cobin and Eyzaguirre were no long with the project, or that Johnson was the sole owner of the real estate holding company.
Also see this spreadsheet that Johnson made available to the equity investors with impossible revenue projections--$20 million over two years in construction commissions??? Scroll down to the Oct 30 2012 entry.
- Johnson began action to oust Cobin/Eyzaguirre.
The ink wasn't dry on the GGC SA incorporation papers when Johnson emailed the NZ attorney about establishing a new Chile corp to buy El Peñon.
- Founders Club Projections spreadsheet.
Forecast: $200M in real estate sales and $23M operating profit on $27M in revenue over the first two years.
- Heads of Agreement Contracts
Four "founders" paid into GGC using these "contracts." For $250,000 per unit, they were to receive 1% ownership of GGC. Johnson represented that equity investment in first and second rounds would total $25M. In fact, only the first round was an equity investment and totaled $1.75M. Jurisdiction: London UK, no explanation given. Funds were transferred to a lawyer's account in New Zealand.
- Deed of business closing GGC SA.
Agreement between El Peñon seller, Sarrazin , Johnson and Berwick acknowledging that GGC SA would close and the property would be bought by another entity. On this date, Cobin's powers of attorney for Johnson and Berwick were rescinded.
- GGC SA shareholders mtg, [disputed]
Meeting minutes say that the partners agreed to dissolve the corporation and the partnership. Johnson claims that all the partners met and agreed. Cobin says the meeting never happened and that he did not agree to dissolve GGC SA without being compensated according to their previous agreement. The company was in fact not dissolved until Aug 20 2013 by a subsequent law firm.
It is important to note that the Cobin-Eyzaguirre exit from GGC was not announced to the equity investors, neither was the fact that with the incorporation of Inmobiliaria Galt's Gulch SA (Nov 26), Berwick did not hold equity in the corporation. Two of the investors submitted their funds after this date. This is material information. Johnson had no experience in real estate development, no experience in Chile and does not speak Spanish.
- Inmobiliaria Galt's Gulch SA incorporated
Inmobiliaria was incorporated as the real estate holding entity for the project. Johnson is named at the General Manager. No board of directors named. Berwick has no management or officer position. All shares are owned by Johnson/Berwick's lawyers because the partners were not in Chile. Johnson did not inform Berwick or the equity investors that Berwick had no position in the corporation. He assumed that he had a 50-50 partnership with Johnson.
Note that Berwick gave Johnson a power of attorney to act for him with regards to IGG.
- Asesorias y Servicios Galt's Gulch SA incorporated.
Asesorias was incorporated to provide services to Inmobiliaria GGSA. For example: sales, marketing, engineering, etc.
- El Peñon revealed to be unsuitable.
Johnson wrote to Berwick via email: "Pretty much everyone failed to mention that most of the 1714 hectares falls under 500 HECTARE minimum lot size (to protect the habitat), allowing for only 3 homes on 1500 hectares and only land under 600m elevation being able to be built on at 4 hectare zoning, which, Vivianne [the seller's real estate agent], John [Cobin] and German [Eyzaguirre] claimed can be reduced to 1/2 hectare."
Also, there is very little water associated with the property. Johnson did not perform due diligence before the purchase, relying solely on Cobin/Eyzaguirre's representations. Note that it took only two weeks for the GGC Recovery Team's real estate agent to verify the water rights and zoning--one visit to the municipality, and another to the Departamento General de Agua.
Johnson's plan going forward: "I think we need to tell people that we are expanding the scope of the project and our approvals have been delayed a bit, but hope to have sales starting in April, as we redraw the project to include much more land, without giving any specifics."
In other words, Johnson planned to cover up his incompetence and material omissions as he tried to find more land for the project.
N.B. The lower elevation zoning is 10 hectare, not four.
- Johnson began his vandetta against Cobin.
Johnson contacted his new project lawyer, Andrés Chirgwin, asking him to sue Cobin for misrepresenting El Peñon and violating a non-compete agreement. Chirgwin advised against this while the original corporation, Galt's Gulch Chile SA still existed. Johnson went on to spend more than $100,000 of GGC investor funds on legal fees pursuing Cobin.
Three law firms advised Johnson that he did not perform the required due diligence before he purchased El Peñon. This is a material omission.
- Lawyers' opinion--Johnson, no due diligence
Chilean lawyers Ernst and Navarro issued a report to Johnson saying he cannot sue Cobin/Eyzaguirre over the El Peñon purchase misrepresentations because it was Johnson's reasonability to perform his own due diligence. Material omission.
- Johnson tried to partner with neighbors.
Johnson asked project lawyer Chirgwin to draw up agreements to be presented to El Peñon's neighbors to use their property for the GGC community where they would retain ownership and split profits with IGG. No takers.
- Johnson took ownership of Inmobiliaria.
Johnson directed Berwick's and his lawyers who held the shares of IGG to sign 9,999 shares over to him, and one share to Chirgwin. With this share transfer, Berwick was defrauded of his IGG ownership. Berwick didn't know that he was not an owner, officer or manager of IGG for another six weeks.
Johnson did not reveal to potential investors that he was the sole owner or that Berwick had no official position in the project, a material omission.
Total capital contributed by Johnson: $ZERO. As of this date, all the capital was contributed by the four equity investors, who still did not know that El Peñon can't be developed.
- Johnson met Ramirez at Lepe.
Guillermo Ramirez was the owner of El Lepe-Las Casas property that Johnson purchased a few months later for an astounding $6.8 million. Cobin claims that Eyzaguirre had already negotiated a purchase price for this property of $3 million.
El Lepe lemon orchards had been neglected for approximately five years before the GGC purchase. The avocado orchard was essentially abandoned, and what trees survived were not producing.
- Pre-Sale Lots, 2nd Founders Round Announced
Announcement made in The Dollar Vigilante. There is no reference to the fact that the property is under contract with a payment schedule (material omission), and no reference to a prospectus or accredited investor status requirement.
- Second Founders Round documents
Second Founders Round loan agreement, when made public, spurred some commentators to call GGC a Ponzi scheme due to the short, three year repayment and 12% penalty terms.
The infrastructure commitment put IGG under the Urbanism and Construction law requiring Johnson to have gotten insurance or bond to protect investors from the failure to obtain zoning approvals. Also note that in the instructions, there's no mention of the requirement for notarized signatures for the contract--another violation of the Urbanism law. Both violations are felonies.
Also note the jurisdiction is New Zealand.
- Zoning and water questioned
Berwick learns there may be problems with subdivision and with the amount of water on the Lepe/Las Casas property.
- Johnson informs Berwick that he defrauded him
In this online conversation, Johnson confirms that he defrauded Berwick of his interest in IGG. Berwick is not a director, a manager, a shareholder and has no authority over the bank account. Johnson accomplished this with his incorporation of IGG and his assignment of all shares to himself on Apr 26 2013 (see entry).
This is not only fraud against Berwick, but fraud against all the investors who were not informed that Johnson was the sole owner, director and manager of IGG. Most if not all the people who invested in GGC did so based on Berwick's marketing and thought he was a partner in the corporation.
Over the following few days, Johnson sweet-talked Berwick into believing that they were still partners, with both assuring each other that their difference would be resolved.
Weeks of wrangling ensued, with the equity investors dragged into the dispute. An agreement was reached where Berwick would pay Johnson for his stake in IGG. Johnson never signed the agreement, however he kept $141,000 of Berwick's company's money.
- FreedomFest, Las Vegas
Johnson marketed GGC to libertarians and other free market adherents at FreedomFest as part of his affinity scam. Jeffery Tucker foolishly stated that GGC will be the best investment opportunity for 2013.
Johnson never paid for his GGC booth at the conference. Here's the brochure he printed for the event.
- Johnson's alleged assault on Sandy Sandfort
Johnson allegedly assaulted Sandy Sandfort, aged 70. Sandfort worked for GGC for approx. three months. He was very critical of Johnson's management style and questioned the suitability of the Lepe/Las Casas purchase based on his assessment of the water situation. Sandfort was paid compensation for the alleged assault.
- Johnson reveals that El Peñon is a dud.
Five months after he knew, Johnson finally revealed to the equity investors that El Peñon cannot be developed.
- Johnson, Ramirez closed on the Lepe purchase
The payment schedule was renegotiated as follows:
Earnest money: $100,000 (paid)
At closing: $1.5 million, (paid)
2nd payment due Sep 14 2013: $1.5 million
3rd payment due Oct 16 2013: $1,65 million
4th payment due Apr 2014: $2.1 million
The agreement includes crippling late penalties.
- Johnson lied about Lepe purchase
Johnson told Berwick and the equity investors that the water rights to Lepe would transfer to IGG in approx. three weeks. In fact, the contract says that Guipaca (Ramirez) retains the water rights until the last payment due on Apr 14 2014.
Johnson also lied about the payment schedule and penalties.
- GGC SA finally dissolved
GGC SA, the corporation established by Cobin, was dissolved by Berwick/Johnson quorum. This document is strong evidence that the corporation was not dissolved voluntarily on Nov 14 2012 as Johnson claims. Cobin has said that he refused to dissolve GGC SA until he was paid under the partners' original agreement.
- Inverex Hydrogenological Analysis of Lepe
This water study says that the Lepe water rights alone account for 80% of the aquifer water underneath Lepe according to government estimates, and that the total water rights for that aquifer are likely three times the amount of water. Johnson did not reveal this information to potential investors, a material omission.
Note that this report is dated two weeks after the real estate closing, representing a lack of due diligence and yet another material omission.
- Second Lepe payment missed
Johnson paid Ramirez a late penalty of $200,000.
- Agricola y Comercial GG SpA incorporated
The share corporation to hold the farm real estate and to conduct farm operations.
- Chirgwin memo on corporate structure
A year after GGC began, amazingly, the corporate structure was not complete and neither the equity investors nor Berwick had ownership of their share of GGC.
On page 2 of this memo, Chirgwin states that the shares of IGG are held in escrow. At least one investor accepted this information and believed this arrangement would protect him from malfeasance. When he discovered that Johnson agreed to swap IGG shares for Rio Colorado (see blog post XX) and asked Chirgwin how this could happened when the shares were in escrow, Chirgwin's answer was essentially that there must have been an escrow arrangement specified in some contract, somewhere. (?!?)
- Second Lepe payment missed again.
Johnson paid Ramirez a late penalty of $200,000. Ramirez accepted the penalty, but received the promise of 3% of IGG and $1,000 to be paid with the last payment on April 16 2013.
- Tatiana Moroz Video for Spring Event
Cute video ad for the Spring Celebration posted to youtube.
- Press Release on Spring Event at Lepe
The headline read: Galt’s Gulch Chile Holds Inaugural Spring Celebration
- Spring Celebration held at the Lepe farm.
Affinity scam event for sales and marketing of GGC. Johnson paid the following "libertarian celebrities" to endorse the project: Josh Tolley, Ben Swann, Robert Murphy, Angela Keaton, Jordan Page, and assorted hangers on, such as the responsibility-shirking Luke Rudkowski and others. Berwick attended as well, despite the growing rift.
- Johnson's press release on the Lepe purchase.
Erroneously said that the farm is organic, and that GGC is a self-sustaining community, while there was no one living there. Also claimed there are "over a dozen residential and community buildings." These buildings were all badly in need of renovation, some are tear-downs, since Ramirez had neglected the property for years. This gem of a press release is preserved at PRweb.com.
- Johnson missed the Lepe payment, 3rd time.
Johnson paid a third late penalty of approximately $200,000. He and Ramirez renegotiated a new payment schedule:
Dec 15--$3.174 million plus $317,472 late penalty for a total payment of $3.492 million.
April 14--final payment of $2.1 million.
- Press Release: GGC Accepted Bitcoin
Headline read: Galt's Gulch Chile Becomes First Libertarian Community Accepting Bitcoin
- Agricola shares sold on Crypto-trade.
Johnson announced the sale of shares in Agricola y Comercial SpA on crypto-trade, a Bitcoin exchange, with the stated intension of using the funds for capital improvements. Monthly dividends The corporation is not established until Dec 10 2013. See the announcement here.
- Johnson offers to buy neighboring property.
Really. Johnson made an offer for El Tranque, the property for Cobin's Freedom Orchard residential community, despite being unable to make the payments for Lepe/Las Casas on time. Price: US $2.5M.
- Johnson fired GGC law firm Chirgwin et al.
Johnson fired his lawyers, Chirgwin Larreta Peñafiel Attorneys. They speculate it was because they 1. felt the duty to represent the GGC companies rather than Johnson personally, and 2. they expressed the duty to respond to equity investor queries.
- False post on bitcointalk.org about Agricola.
Johnson said that Agricola acquired a 50 ha working farm, etc. In fact, no land titles were transferred to Agricola. To this day, it is a shell company. Go here and scroll down to Nov 28.
- Berwick abandons GGC
Berwick and Johnson cannot reconcile. Berwick agreed not to bad mouth Johnson and GGC at the urging of Johnson and the equity investors. This left GGC without a proven marketing outlet and no libertarian spokesman to credibly continue the affinity scam. Sales soon collapsed.
- Press Release on Partnership with BitcoinsChile
The headline read: Galt’s Gulch Chile Announces Partnership With Bitcoinschile
- Johnson on Josh Tolley's radio show.
Johnson appeared on Josh Tolley's radio show, aired in the US. He was selling GGC "organic" farm share program, the 25 acre "organic" lemon orchard, the avocado orchard and residential lots. He said that the farm share and orchard owners ROI will be 20%. Note: the orchards are not certified organic, and the avocado orchard is not producing due to water stress. Note: GGC did not register with the SEC.
- Johnson made a partial payment on Lepe.
Johnson paid Ramirez a partial payment of $1.98 million, including a late penalty. They renegotiated the payment schedule yet again:
Dec 27--$1.6 million.
Apr 16--final payment of $2.1 million. with the share transfer and $1,000.
- Johnson missed Lepe payment
- GGC Itaú Bank Account Blocked.
Incoming wires blocked due to suspicious activity. Johnson blames a whole cast of villains for this, but it was more likely violations of the know-your-customer regulations.
- Johnson paid a partial payment for Lepe.
Approx. $932,000 including a $1,150 late penalty. Johnson apparently also gave Ramirez a check for approx. $650,000 that he could cash in 15 days. We assume the check cleared.
The last payment was due on April 16 2014 for $2.1 million, plus the share transfer and payment of $1,000. This payment could be extended to Aug 15 2014 with penalty, of course.
- Johnson uses P. Del Real's personal bank account.
GGC accepted wires from Pamela Del Real's personal bank account at Banco de Chile, from sometime in February through May 2014. Total investor funds into her account: $1,034,225.77, we believe the vast majority misappropriated.
- M. Del Real Allegedly Forged Signatures.
Del Real submitted minutes for an IGG shareholders meeting held on this date. He claimed that the original owners of IGG shares, Berwick/Johnson's lawyers, Vila and Cordova, attended the meeting and signed shares over to Johnson and the Del Real Family. One problem: Vila and Cordova already signed shares over to Johnson (one share to lawyer Chirgwin) on Apr 26 2013, ten months earlier. (See time line entry for that date.) making this document suspect. Del Real's transfer of shares document allegedly has forged signatures of the two lawyers. Both Johnson and The GGC Recovery Team are pursuing criminal charges against Del Real based on these questionable documents.
- Disputed Agricola first shareholders meeting.
According to the minutes, in attendance: Johnson, Mario Del Real, Pamela Del Real and Ian Thornton. Johnson make GM with 8,000 shares, M. Del Real made Chairman with 2,000 shares, P. Del Real made Secretary, Thornton made legal representative. Minutes signed by Johnson and Thornton, registration of minutes signed by M Del Real. Johnson claims these documents are "false" and that Agricola is wholly owned by Asesorias y Servicio Galt's Gulch.
- Johnson Announced Move of Agricola BTC trade
Shares for Agricola were trading in Bitcoin on crypto-trade since Nov 21 2013 (see entry). Johnson announced that he was moving the trading to another online exchange, Ciphertrade.com as of the next week. The transfer didn't happen.
- Contract between Agricola and Wehrhahn.
Professional services contract for $100,000 with Mónica Wehrhahn Llorente, a woman with political connections who Johnson considered a "fixer."
- Johnson sued Cobin/Local Newspaper for libel.
Cobin wrote a column in the Curacaví newspaper, El Mauco, calling Johnson a scoundrel and a liar. Johnson spent well over$100,000 of GGC investor funds pursuing this and other legal actions against Cobin. The case against El Mauco was dismissed on Jun 26 2014. The case against Cobin was dismissed in November 2014 when Johnson was a no show at the court.
- Johnson removed Berwick from NZ Trust
Originally, the corporate structure for GGC was to include a New Zealand Trust and a NZ corporation that would act as the trustee of the NZ Trust. The Chile entities would be owned by the trust. Despite repeated pleas from the NZ lawyer and others, Johnson never completed this structure. (See our blog post on GGC contracts, "We Should Change the Name to No-Contracts-ville.")
Berwick and his wife were named as trust beneficiaries. On this date, Johnson removed them. Berwick was neither aware of their beneficiary status, nor aware of their removal until The GGC Recovery Team informed him in March 2015.
- Johnson sold IGG shares to the Del Reals
This document says that Johnson, owning 8,000 shares, sold 1,000 shares each to Mario, Pamela and Alexander, leaving him with 5,000 shares. Mario Del Real already owned 2,000 shares. Purchase price: $1.82/share, valuing IGG at $18,181. Johnson claims that this document was falsified, that he signed it on Apr 15, 2014 and that the date and provisions were changed. He has not provide a copy of what he claims to be the genuine document to the investors.
The Recovery Team has a recording of Johnson confirming that he transferred half IGG shares to the Del Reals.
- GGC Rio Colorado Stock Swap
Johnson and Del Real agreed to swap stock which would have given Johnson 51% of Rio Colorado and the Del Real family 50% of IGG. See our blog post "Rio Colorado: The Con Man Got Conned."
- Johnson committed water rights violations
Earlier in the year, Johnson took the advice of his agronomist that the existing wells, all of which are shallow and tap surface water, were barely sufficient to maintain the health of the orchards, and not sufficient to expand the farm operations as planned with the farm share program. He contracted to dig a deep well but put in charge of the task someone who lacked experience. This person neglected to follow the regulations of the Dirección de General de Aguas. The mayor of Curacaví heard about Johnson's water rights violations and submitted a complaint to the DGA.
See June 26 2014 entry for more information.
- Agricola Vanishes from Crypto-trade.
Shares were to be transferred to ciphertrade.com but instead they vanished from this exchange. Johnson made excuses for the disappearance and non-payment of monthly dividends.
- IGG Shareholders Mtg to expand share count.
The minutes of a shareholders meeting says the number of share of IGG were expanded from 10,000 to 1,000,000. Signed by Juan Francisco Reyes, lawyer. Johnson claims that this document is false but does not give specifics. In a recorded conversation, however, Johnson states that the expansion of shares was valid and that he agreed to it.
- IGG Board Meeting
First Inmobiliaria Board Meeting where Mario Del Real became Chairman, Pamela Del Real became General Manager and Johnson became Financial Manager. (See April 14 2014 entry.) Johnson claims that this document is a fabrication as well, saying that he never attended a meeting at the reported location when Pamela Del Real was present.
- Harvest Celebration at GGC
The budget was approximately $100,000 not including renovations to the hacienda and cabañas. Many investors compared their GGC experiences and, not receiving answers to their questions, were unhappy. There were many requests for refunds due to this event. See our blog post "How Do You Say Potemkin Village in Español."
Continuing with the affinity scam, lib celebs who were paid to appear: Josh Tolley, Wendy McElroy and the band Golden State.
- Johnson and Del Real had their falling out.
The inevitable falling out occurred some time in late May due to the stalemate over the GGC/Rio Colorado stock swap and financial issues. Johnson was again left without a bank account to receive investor funds.
- Johnson used Wehrhahn's Bank Account for GGC
Johnson used the bank account of Mónica Wehrhahn to accept wire transfers. According to bank records available to the Recovery Team $360,282.00 were accepted from GGC investors into this account. Sra Wehrhahn passed on these funds to Johnson in the form of checks written to Johnson and various GGC employees, less compensation for work performed for GGC. Johnson claims that Wehrhahn owes GGC $170,000 and accuses various people of stealing these funds, Wehrhahn, Josh Kirley and Ken Carpenter.
- Johnson Tried to Raise $1M to Buy off Del Real.
When it finally dawned on Johnson that he had been had, he turned to Josh Kirley and began a series of communications to raise $1 million from him. At first, he tried to entice Josh with the lucrative Rio Colorado, offering him a percentage. When that didn't work, he confessed that Del Real had tied up ownership and control of GGC, and told Josh that he needed money to buy off Del Real. Josh requested financial and other information about GGC, Rio Colorado, Del Real, etc. to make a decision that Johnson refused to supply. Thus, in Johnson's twisted mind, Josh became his worst enemy. He has been slandering and libeling Josh ever since.
- Agricola crypto-trade share buy back
Johnson finally bought back Agricola shares on crypto-trade and apparently paid a dividend. He said he had to de-list the company's shares due to know-your-customer regulations. The GGC Farm Share investors with contracts did not receive dividends, however.
- Loan Payments Come Due.
The first loan payment to a Second Round Founder was due on this date. Johnson made no loan payments to his investors.
- Who is Fernando Hernandez?
We don't know but the Del Reals gave him shares of IGG supposedly in exchange for work on the project. Johnson says that Hernandez did not provide any services to GGC.
- Curacavi Mayor Files Complaint about Wells
Headline: Lepe Gringos Taken to Court for Taking Water without Authorization.
Sub-head: The complaint was filed by Mayor Barros and the sons of Uncle Sam risk millions in fines.
Apparently the Lepe Gringos were caught red handed when the Town of Curacaví, through Mayor Juan Pablo Barros, filed a complaint to the General Directorate of Water (DGA) for tapping groundwater from an unauthorized point and, in addition, for performing work in riverbeds without authorization.
In the complaint, Mayor Juan Pablo Barros requested enforcement of the rights of exploitation of water on Inmobiliaria Galt's Gulch Chile, denouncing the extraction of water from wells located in the channel of Puangue Creek, as stated in the complaint.
The complaint was received by the Directorate General of Water then referred to the Court in Casablanca, requesting application of the fine mentioned in Article 173 of the Water Code for each if the confirmed infractions, says the DOH* document.
For his part, Mayor Juan Pablo Barros was quite satisfied with the measure adopted by the DOH, said that all people should respect legislation, and he, as mayor and the primary town authority, faithfully fulfilled the functions granted to him as by any town. It should be noted that this complaint was published by the Town of Curacaví.
Article 173 of the Water Code: Any violation of this code that is not specifically sanctioned, shall be punished with a fine which may not exceed twenty UTM**, without prejudice to other civil and criminal liabilities as appropriate.
*Dirección de Obras Hidráulicas, Directorate of Hydrological Works
** Unidades Tributarias Mensuales, unit of account for taxes and fines, currently around US $64.
- Bizarre Cryptic Emails from Johnson Begin
GGC Investors received four cryptic emails from Johnson. There were more emails occasionally sent over the next few years. When reading, bear in mind that at this time, very few of the 73 investors knew each other, what was going on behind the scenes, or who any of the people mentioned in these emails are with regards to GGC. For the vast majority of the GGC Investors, this was the first time they had any inkling that their investment was a risk.
For further context, by early July 2014, Johnson had been defrauded out of his ownership and control of GGC by the Chilean thief and his erstwhile partner, Mario Del Real. He had revealed this fact to Josh Kirley and begged Josh to pay Del Real $1 million to reverse Del Real's theft. Johnson's offer to make all investors shareholders in GGC was obviously a sham, a lie to make Josh look bad, since Johnson didn't own or control the shares. Johnson was becoming desperate because his affinity scam/Ponzi scheme was going public, which is why he sent the following four emails.
- Final Lepe Payment Extended to Oct 15 2014.
- The Eddie Willers email was sent to GGC Investors
This email from investor Josh Kirley was sent to many GGC Investors. See our blog post for the full text at this link.
- GGC Investors Go Public
First article on GGC by Wendy McElroy
- IGG Board Meeting with Johnson/Thornton
Johnson called an IGG board meeting and appointed himself general manager. Since previous documents show that M. Del Real is the chairman of the board, the validity of the meeting is questionable.
- Josh Tolley Show on GGC
Tolley discussed his involvement and concerns about Johnson and GGC.
- IGG Board Meeting Called by Del Real
Declared that Johnson was no longer a shareholder, and removed Johnson as a manager of GGC.
- Agriculture Subdivision Approval
In a move that was too little, too late, Johnson received subdivision approval for the farm areas. This subdivision was necessary to assign title to the five orchard lots to GGC investors, and to assign title of the remaining agricultural area to Agricola y Comercial Galt's Gulch. Title was never transferred. This approval, which cost approx. $5,000 and took about two weeks was little more than a public relations measure to combat the flood of negative press about GGC.
- Folta Supported Johnson
With Johnson beginning to realize that he's days at GGC were over, a major investor, Jerry Folta, stepped up to support Johnson. Despite Folta being the only investor to do so, Johnson gained newfound confidence and cut off any attempt to negotiate with the investors.
- Del Real's First Extortion Attempt
Via email, M. Del Real asked the investors for $200,000 for legal fees for him to defend himself against Johnson in court. He was ignored.
- Final Lepe Payment Due and deadlne extended.
Ramirez extended the final payment to Dec 1 2014 with penalty, of course. Total: $2.38 million.
- Kirley Granted Injunctions against Asset Sales
Johnson, having GGC sales completely cut off by the investors going public, threatened to sell "excess water rights" to raise money. The GGC Recovery Team lawyers found an error in the deed for the Lepe purchase. They requested injunctions against the sale of land or water rights while contesting the Lepe purchase in court.
- GGC Recovery Team Manages Lepe Farm
Tom Baker and E.J. Lashlee went to the Lepe farm to have talks with Johnson and encourage him to leave. They offered him a cash settlement which he refused, likely because Folta could be squeeze for more money than the Recovery Team. Johnson left the farm in fear and the Recovery Team took over the management.
- GGC Recovery Team Settlement with Del Real
Del Real agreed to accept $30,000 to unwind his fraudulent GGC transactions and exit our affairs.
- Del Real's Second Extortion Attempt--$1.2M
The day after his settlement agreement with the Recovery Team, Del Real sent a second extortion email, this time for $1.2 million. He was again ignored.
- Civil case Kirley v. Guipaca and IGG Filed
To declare the Lepe purchase null and void.
- Folta Paid Johnson $250,000.
Folta claimed to have paid Johnson $250,000 to buy 30% of IGG shares. The Recovery Team later learned that this is based on a promesa, the transaction likely to be triggered when Johnson reclaims ownership of his IGG shares.
- Third Extortion Attempt by Del Real
Del Real sent attorney Jose Tomas to a meeting with the Recovery Team and our lawyer. We were threatened with deportation and then subjected to another extortion attempt. We countered by presenting our evidence of Pamela Del Real's embezzlement.
- Final Lepe Payment Deadline Missed Again
Ramirez told the Recovery Team he will seek remedy through arbitration.
- Kirley v. Guipaca/IGG jurisdiction petition
Ramirez and Del Real (representing IGG) submitted identical petitions challenging the civil court's jurisdiction. This showed that Ramirez and Del Real are cooperating.
- Sham Sale of El Peñon.
Del Real accepted a purchase and sale agreement from Ana Maria Mazza for $550,000, with approx. $10,000 in earnest money. Closing scheduled for Apr 20 2015. Documents point to this being a sham. The investors' lawyers filed for and received an injunction against the sale.
- Kirley v. Guipaca/IGG jurisdiction upheld
The judge rejected Ramirez and Del Real's petitions. They appealed.
- Del Real Raided El Peñon
Del Real sent several men with trucks to strip the house and storage building, cut down the almond orchard and change the lock on the gate.
- Guipaca v. IGG Arbitration, Kirley's entry petition
Our lawyers petitioned to enter this arbitration saying it is null and void because the deed upon which it is based is null and void.
- Fotosig v. Asesorias
Fotosig, a vendor to GGC, put a lien on the only asset of Asesorias, the Jeep, for their fee of $9,500 that Johnson never paid.
- Appraisal of Lepe
Tinsa appraised the Lepe/Las Casas property at $3.2 million. This does not include the water rights, likely between $1-2 million.
- Kirley v. IGG Arbitration
Kirley filed suit in arbitration for the return of his investment.
- Chirgwin sued IGG for nonpayment of fees
GGC lawyer Chirgwin, like just about everyone else, was stiffed by Johnson to the tune of $54,000. However, Chirgwin was hired by Asesorias and should be suing that entity, not IGG.
- Injunction against El Peñon Sale Granted.
This is in support of the arbitration begun on Mar 3 2015.
- Jumpin' G's SpA v. Johnson
Investor Jerry Folta's entity, Jumpin' G's SpA, filed a civil suit in Santiago against Johnson as the former general manager of Inmobiliaria GG SA for repayment of Jumpin' G's $400,000 loan.
When The GGC Recovery Team reported on this case, we didn't understand what Folta was trying to do. Obviously, the court would not allow Johnson to be sued as the general manager when he no longer was. Folta claimed that he was not suing Johnson. Please look at the below document. Note in the heading, it says "Demandado: Kenneth Dale Johnson." Demandado is the Spanish word for defendant.
It turns out that this was Folta and Johnson's attempt to have the court recognize Johnson as the general manager of IGG, which they thought would remove Del Real--a sort of trick, and an expensive one. The court didn't fall for it and would not hear the case.
- IGG SA became Inversiones Merced Limitada
Mario Del Real, Pamela Del Real and Alexander Del Real changed the name of the real estate holding company to Inversiones Merced Limitada to dissociate it from the GGC project, and entered into preparatory acts to dispose of the company’s assets to avoid satisfaction of investor claims.
- Johnson's FB Flame War Began
Campaign to libel and harass GGC investors and former employees.
- Johnson's Armed Raid of Lepe
Johnson hired four armed thugs to take back the Lepe farm management from the GGC Recovery Team. They held two employees at gun point for hours.
- Chile Lawyers v. Johnson for unpaid legal fees.
CLP $61,317,567, in today's dollars, $87,596.52.
- Johnson Revived GGC Webpage w/ Sales Pitch
"Galt's Gulch Chile is a planned community, affording those who plan to live here an abundant supply of fresh drinking water, a plethora of fruits, vegetables and nuts from our 250-acre working farm, or your future home site. Our clubhouse is nearing completion, with accommodations for you to stay on-site at GGC in our guest haciendas or the clubhouse. Please contact us for more information."
- McLeod v. Pamela Del Real
GGC Recovery Team lawyers filed a criminal complaint on behalf of David McLeod against Pamela Del Real for embezzlement of his GGC investment. A bank receipt shows that she diverted his funds from her bank account used by Johnson to another account for Rio Colorado.
- Johnson Provides Some Documents
After being cornered on his astoundingly foolish delivery of GGC stock to Mario Del Real which was the proximate cause of the total collapse of the project, Johnson released a series of nine documents with information on each that evaded explaining the circumstances of how they were drawn up and signed. The following is his "explanation" of the documents:
Here are the documents:
The details here are more important to our legal team than in understanding the GGC Affinity Fraud.
- McLeod v. Del Real Pros. Francisco Jacir Manterola
The eighth criminal court of Santiago appointed Francisco Jacir Manterola of the Ñuñoa District Office as prosecutor. Attorney Calvo submitted a petition to the prosecutor to:
1. Investigate the facts submitted with the criminal complaint and petition,
2. Interview Pamela Del Real and Kenneth Dale Johnson about the facts of the case,
3. Subpoena the bank records of Pamela Del Real's Banco de Chile account used for GGC,
4. Search the Del Real house for evidence, and
5. Interview Mario and Alexander Del Real as witnesses.
- Guipaca v. IGG Arbitration
Arbitrator will not rule on Guipaca's demand for final payment, deferring to the civil judge in the Kirley v. Guipaca and IGG case that is on going.
- Johnson v. Wehrhahn?
Johnson posted a video claiming that he filed charges against Wehrhahn for misappropriating $170,000.
- Folta v. IGG.
In civil court, Folta was granted an injunction against the sale of land and water rights at Lepe. Johnson seemed to have convinced Folta that Josh's intention was to remove the existing injunctions and sell assets. How Josh could have done that, we don't know. Even if the injunctions were removed, Josh would not have ownership of the assets to sell them.
Folta also petitioned for Pamela Del Real to be removed as IGG's General Manager in favor of an executor. That motion was denied.
- Guipaca v. IGG arbitration travesty of justice
Without allowing Kirley to enter this arbitration, the arbitrator, Emilio Pfeffer, approved the following agreement between Ramirez and Del Real:
- final payment is forgiven
- water rights are retained by Guipaca, leaving Lepe with no water
- IGG will not sue Ramirez for misrepresenting the land and water rigths.
This agreement violated the injunctions against sale or transfer of assets.
- Johnson on Christopher Cantwell's podcast
See our blog post, "The Cantwell Interview: Johnson Cornered."
- Kirley receives injunction protecting hwy funds
The public works department will be taking approximately two acres of Lepe by eminent domain for a highway project and will pay CLP $109 million (about US $160,000). In arbitration, Kirley received an injunction so that money can be paid to him for Johnson's violation of his contract.
- Johnson begins cultural exchange scam
Johnson opened an account with a cultural exchange website that caters to first world backpackers, matching farms and other small businesses with volunteers who work for room and board. He was violating the terms and conditions of the cultural exchange program by using volunteers as a substitute for paid Chilean workers. He was also likely violating a host of Chilean laws having to do with immigration, labor, taxes and social security. He ramped up the number of "volunteers" to over 20 at a time, having them do all the work on the farm, including their own cooking and cleaning.
Johnson's free labor scam continued until late February when the Recovery Team found his ad on the internet and informed the exchange program of his violations.
See our blog post Latest Galt's Gulch Chile Scam--Free 1st World Labor for more information
- Investors v. Johnson, Del Real. Fraud Charges.
On this date, 22 investors who paid $5.5 million to GGC filed criminal charges against Johnson and the Del Reals for fraud and violating the Urbanism and Construction Act by selling a non-existent real estate development. The court in Curacaví accepted the charges and assigned docket number RUC 1510039752-5.
- Kirley v. Johnson, docket # RUC: 1510039858-0
This criminal complaint charges Johnson with a felony violation of the Urbanism and Construction Act that requires that the developer purchase insurance or bond when selling lots before obtaining zoning approvals. We have included the complaint and the acceptance notice from the court with the assigned docket number. In Spanish.
- Kirley v. Del Real/Ramirez, violation of injunction
This criminal complaint--docket # RUC: 1510039686-3--was filed against Pamela Del Real as the general manager of IGG and Guillermo Ramirez as the seller of the Lepe property. In arbitration that Ramirez initiated against IGG to receive the final land payment, the two came to the following agreement:
- Ramirez forgave the final land payment.
- IGG forfeited the water rights under the purchase and sale agreement for Lepe.
- IGG agreed not to sue Ramirez for misrepresenting the water and zoning situations on the Lepe property. (See Aug 10 2015 entry above.)
Their agreement violated the injunction that has been in force since October 2014. All parties to the arbitration were well aware of this injunction, including the arbitrator, since our attorney, Lackington, presented this information during arbitration.
Below is the complaint and the notice of court acceptance with the assigned docket numbers. In Spanish.
- Pros. Cristian Cáceres assigned to Curacaví Case
Prosecutor Cristian Cáceres was assigned to the Palomba et al v. Johnson and M Del Real criminal case in Curacaví. (Sr. Cáceres is not a relation of GGC investors' criminal attorney Carlos Cáceres.)
- FBI FOIA report on GGC affinity fraud investigation.
This report shows that the FBI assigned a case number to Johnson's GGC international affinity fraud investigation and transferred the case to the more experienced Los Angeles office from the San Diego office.
- Kirley v. Del Real/Ramirez, contempt, pros. motion
In this contempt of court case where P. Del Real and Ramirez violated the court ordered injunction against any change in ownership of the water rights at Lepe, the prosecutor submitted a motion to dismiss the case. In her opinion, since the injunction was part of a civil case, the violation of the injunction is a civil matter, not a criminal one.
- Kirley v. Del Real/Ramirez, motion rejected
Refer to the earlier time line entry on Jan 5 2016.
The judge ruled that the violation of the water rights injunction was a criminal matter and that the prosecutor should proceed with the case.
- Kirley v. Del Real/Ramirez, Ramirez's lawyers
Ramirez named Hector Riccardi and Luis Salazar as his legal representatives in this case.
Riccardi is the lawyer who engineered the agreement between Del Real and Ramirez that violated the water rights injunction leading to contempt of court charges.
- Arbitration award to Kirley
In our arbitration against IGG SA, where Josh Kirley requested that the penalty clauses in his contract be enforced, the arbitrator found 100% for Kirley. He awarded Kirley a refund of his "investment" plus penalties and legal fees, totaling nearly US $1.3 million.
- Mario Del Real's attempt to steal the assets by changing the name and form of IGG SA is irrelevant.
- Kirley's contract is valid, and Johnson was and is still a manager of IGG SA.
- The bulk of the award must be paid in US dollars.
Injunctions prohibiting the criminals from disposing of IGG SA's assets are in force until the award is paid.
Pamela Del Real is appealing the decision, with little chance of prevailing.
Sentencia Arbitral Kirley con IGGSA May 2016.compressed.1-12
Sentencia Arbitral Kirley con IGGSA May 2016.compressed.13-25
Sentencia Arbitral Kirley con IGGSA May 2016.compressed.26-37
Sentencia Arbitral Kirley con IGGSA May 2016.compressed.38-48
Sentencia Arbitral Kirley con IGGSA May 2016.compressed.49-50
- Venue Change for McLeod v Del Real, Johnson
The prosecutor for this case asked the court for and was granted a venue change to Curacaví. The court document for the venue change is link below.
- Appeals Court Upholds Arbitration Decision/Award
The Appeals Court upheld the arbitrator's decision in the Kirley v. Inmobiliaria Galt's Gulch arbitration where $1.3 million in restitution and penalties were awarded to the GGC Legal Fund. (See time line entry for May 18 2016.)
The court also awarded costs to the fund since there was "no plausible reason" to submit this appeal.
- Felony Prosecution Becomes Official