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Investors File Criminal Charges Against Kenneth Johnson and Pamela Del Real, FBI and IRS Notified

By Terence Gillespie June 10, 2015

As promised by investor Lt. Col. Thomas Baker, the forensic reconstruction of Galt’s Gulch Chile has been completed and was hand-delivered to the FBI and the IRS on June 8th, 2015. Informed by the reconstruction, investor David McLeod filed criminal charges against Kenneth Johnson and Pamela Del Real in Chile (Docket number RUC 4710-2015) on May 20th. More US civil suits against Johnson are likely to follow.

On a phone call with Cathy Cuthbert, she described the forensic recontruction as a wellspring of previously unknown facts and details about what actually transpired around GGC. Timelines, Contracts, Accounting, Wire Transfers, Corporate reports, Recorded conversations between Johnson and investors, Videos, Credit reports, etc. showing Johnson to be at the heart of the problems surrounding GGC he has blamed on others. In other words, despite Johnson’s claims of working for the investors as a developer the reconstruction shows that the “service” Johnson has been providing them is similar to that which the bull provides the cow.

Readers of this GGC series will find it no surprise that Johnson used investor funds to spin a complex web of deceit involving multiple entities, off-shore trusts, multiple bank accounts, share swaps with Mario Del Real and others, inflated prices, ridiculous late fees, absurdly negotiated prices, etc. all while using corporate bank accounts like a personal checking account.

It’s tempting to leave Jeff Berwick out of discussions about GGC now that he’s so publicly apologized. Unfortunately, his involvement in cutting Cobin and German out, starting a different entity into which to take title (IGGSA) and trying to get the New Zealand trust and offshore structures in place is quite evident in the reconstruction documents. There’s little doubt Ken Johnson was the instigator of the most serious problems with GGC, and continues to make all things worse with his presence and current behavior. However, to say Berwick wasn’t right there at the beginning is to not tell the story, correctly, at all. As mentioned in Part 3 my hope is that Berwick will externalize his contrite heart into some modest assistance to ongoing recovery efforts or investors in extreme need. With the introduction of these new charges, with more to follow, the publicity surrounding the aftermath of GGC is not going away, anytime soon.

Note: The criminal charges filed by David McLeod, and some documents of the forensic reconstruction I was able to coax from the recovery team, have been added to the free E-book, “The Creature from Galt’s Gulch”. I will continue to add such elements to the book as I receive them and within the boundaries of preserving the privacy of the investors.

Justice Provided by the People Involved

As described by Cathy Cuthbert and Thomas Baker, the breadth and depth of the forensic reconstruction they’ve put together is quite impressive. It’s not only a meticulous investigation and gathering of documents but they’ve formatted the whole thing into a package that makes it accessible to outside parties.

I’m not sure what may have transpired between Tom and Ken but the USMC motto of “No better friend, no worse enemy” might echo in Johnson’s mind for some time to come. That is, if Johnson is able to comprehend what has just happened to him. The agencies he’s just been reported to will hound him for the next decade. Half of that decade will be spent defending himself against the criminal charges that were filed against him in Chile on May 20th, by David McLeod. And, there’s more to come. A rather obvious tip to Johnson would be: The next time Tom makes an offer of either “Friend” or “Enemy” . . . go with the former choice. Who knows? Maybe the recovery team would still let Johnson wiggle out of his fraud if he’d just hand over the land the investors paid for.

The FBI white collar crime fraud division will find that most of the investigative, forensic accounting, and reconstructive work has been done and hand-delivered to them by the recovery team. With so much work already complete perhaps the agency will bump the case to the top of their case-load so they may stand in front of their logo at a news conference and receive some good publicity.

The Del Real Factor

Johnson is solely responsible for inviting a local Chilean, Mario Del Real, into GGC affairs. And yet, investors have been made to suffer Johnson’s endless complaining about problems he’s had with Mario and his daughter, Pamela. That’s because Johnson performed a bizarre GGC stock swap with Mario hoping to make big money on the value of water in an Andes Water company called Rio Colorado. By the time the smoke had cleared Mario owned most of IGGSA and his daughter was the general manager of the company! In other words, Johnson was no longer the dominant share holder of GGC and had lost all control over the entity that holds the land. What great “Development” work, Ken!

(To understand more about this failed deal see Chapter 7, “The Rio Colorado/GGC Share Swap”, in the GGC E-book.)

If you’ve read my “Stolen Car Metaphor” at the end of Part 7 you know my take that Johnson’s epic fail with the Del Real share swap is merely the lamentations of a thief who bungled and lost the proceeds of a previous theft. The fact that Johnson’s audience for these lamentations are the victims of the first theft is exactly the kind of behavior I find consistent with Dr. Robert Hare’s psychopathy checklist.

Any deal Johnson made with stolen shares of stock can, and should be, overturned. Therefore, whether the Del Reals colluded with Johnson, or are merely his victims, is a matter for a judge to decide (Yes, there is no longer any way to resolve GGC disputes without involving state agencies, unfortunately). Pamela Del Real’s resume (She’s now the general manager for IGGSA) shows substantial accounting expertise. Such expertise will make it impossible for her to plead ignorance if there was any foul-play on the Del Reals part.

Johnson’s Latest Ploy, Revealed

Johnson has now revealed his latest ploy and what’s behind his re-occupation of the GGC hacienda and grounds. And, surprise, surprise, it’s a variation on his usual … lies mixed with just enough truth to confuse and divide his listeners against themselves while holding out a carrot and stick for those who either cooperate or resist.

More specifically, Johnson is trying to confuse and divide investors against lead investor Josh Kirley hoping they’ll put pressure on Josh to relent in his legal actions which have locked up Johnson’s sale and pillage of IGGSA assets. He also wants the investors to help him get rid of his “Del Real” problem. The carrot Johnson offers is the same old title to land he’s been promising investors, and not delivering, for the past two years. The stick is his continued presence and purported counter-attacks on investors who “continue to attack him”. For those not familiar with Johnson-speak, the word “attack” describes the actions of anyone who points out to Johnson another of his own broken promises.

If only the investors will help him convince Kirley to relent, and help him get rid of the Del Reals, then Johnson can deliver, at long last, the coveted Titles to actual land the investors have been pestering him about, all this time.

E-mail Between Host and Parasite

A recent e-mail exchange between Josh Kirley (The host) and Ken Johnson (The parasite) is an excellent illustration of what actually went wrong with GGC. It’s also an excellent example of what happens when “The creature” is confronted with truth.

My thanks to Josh Kirley for making this e-mail exchange available:

On Thu, May 28, 2015 at 12:27 PM, Josh Kirley <joshkirley@gmail.com> wrote:

“Ken,

For two years, you keep sending out the same emails. Always full of juicy drama, promising the release of more information in the future. This behavior is unprofessional. It inspires no confidence. Why can’t you just do your job?Try building something. Try living up to your responsibilities. Produce something. Be accountable. If you are GGC’s Minister of Propaganda, who is the Project Manager? Your accusations are baseless and defy all logic.

Tell me if you can refute the accuracy of the following facts. I swear to their order and authenticity.

1) You are wholly responsible for bringing the del Reals into this nightmare.

2) You pleaded with me to give 1 to 2.5 million dollars to Mario del Real for his Rio Colorado Project. You personally vouched for Mario, insisting the Rio Colorado deal was a “No Brainer” and a “Homerun”

3) I told you that I had my suspicions about del Real and would get back to you after performing some due diligence.

4) Once I told you that I was not willing to put money into a second Chilean investment, you totally reversed course.

5) You refused to provide me with del Real’s Ruta number, or even his full name, intentionally stonewalling my attempts to research his background.

6) You told an entire room full of defrauded investors at the second festival that your deal with del Real was a “totally separate” matter between you and him.

7) You told all of us that your alliance with del Real was “none of our business” and would have no impact on our contracts.

8) When I offered to pay, out of my own pocket, to have del Real looked into for you, you refused my help, saying that you feared if I looked into del Real, he might “get spooked” and walk away from your deal.

9) Weeks later, you came back to me, begging for a million dollars. You said that you were double crossed by del Real and you needed me to buy back the shares that you gave to him.

10) When I would not bail you out, you predictably changed your characterization of my relationship to the project from savior to saboteur.

I’m sorry if I cannot respond to each of your lying emails. But, I have to give priority to my day job. I suggest you do the same. Maybe start by paying employees, repaying loans, and living up to the contracts you signed.

Josh Kirley”

The Parasite Responds

“Josh,

As you know, you are lying about most all that you discuss. There are communications between you, Monica Wehrhahn, Ken Carpenter, Alison Sherman, the Del Reals and more. Do you think that those just disappear because you are now pitching your false storyline to yet another news outlet? This has always seemed to be a publicity stunt for you, just as GGC always have been for Jeff Berwick.”

Johnson then goes on a bizarre rant about Jeff Berwick and BitcoinATM, Wire Transfers, Cafayate, Argentina (If you can believe it) and ends with:

“We are working on completing what Mr. Aguirre was unable to complete, or was unwilling to complete. We are working to fix the $1m+ damages that those labeling themselves “rescuers” of GGC have inflicted upon the farm, buildings and property. We don’t spend our time pitching a false story line for our own publicity, as Mr. Berwick and yourself seem to focus on quite a lot.

Ken”

Notice that Johnson does not dispute, nor even address, any of Kirley’s questions or statements. This is the way e-mail “Exchanges” and “Dialogues” go with Johnson. For readers who may have wondered . . . “Why don’t they just ask Johnson if [Insert simple question here] the above exchange with Josh Kirley is your example. Josh speaks the pure truth and asks sincere questions and, in response, Johnson doesn’t respond, at all.

The last paragraph is classic Johnson-speak. For readers who don’t understand the dialect his e-mails usually end with a payoff like this if you know how to read Johnson-speak. That is, you take all accusations as a literal description of what Johnson, himself, has done or is doing. In his last paragraph, therefore, we learn that Johnson has caused more than a million dollars of damage and is pitching false story lines for his own publicity.

Johnson’s Assaults

I’ve spoken with two people who were physically assaulted by Ken Johnson. The first was a young man Johnson tried to push around (Mentally and physically) during Johnson’s employment with The Dollar Vigilante. This young man would not tolerate Johnson’s nonsense and was the first person to speak up to Berwick about his suspicions about Johnson poisonous behavior. If Berwick had listened it’s anyone’s guess how Galt’s Gulch Chile might have played out without the involvement of Ken Johnson.

The second assault was that of a 70-year-old Salesman that worked for GGC who didn’t fare so well in the “Encounter”. Sandy “Clarence” Sandfort was grabbed by the lapels and thrown over a couch by Johnson when he learned that Sandy was about the leave Chile after all of Johnson’s promises had remained unfulfilled. Sandy was severely bruised and Johnson had almost managed to break a few of Sandy’s ribs. He was so shaken up by Johnson’s assault that Berwick had to fly in the next day and negotiate an NDA and payoff to keep Sandy quiet about the assault. Johnson later broke the terms of that NDA by talking about the assault with a third-party. Hence, Sandy’s retelling of the assault to me.

and Taunting . . .

Tatiana Moroz, who worked for Ken Johnson and wrote the GGC theme song, shares her experiences with GGC and with sociopaths in the liberty movement. Most of what involves GGC is in the first 25 minutes of the video, but, the ladies (With Julia Tourianski, BraveTheWorld.com, and Gigi Bowman, gigibowman.com) go on to tell other fascinating stories around the theme.

https://www.youtube.com/watch?v=KqQW5a4dJMk

Contrast the story Tatiana tells in the above video with the excitement she started out with and you’ll get a feeling for the roller coaster ride that was GGC. Tatiana perfectly captures the cognitive dissonance felt by most who’ve followed the promise, and then the reality, of GGC in the hands of Ken Johnson.

Favorite excerpts:

“This nonsense [Sociopaths in the Liberty Movement] is disgusting and ridiculous … and what’s gonna happen, here, is that people are going to leave and they’re not going to want anything to do with it (True Liberty) and all we’re going to be left with is the dirtbags who think this kind of behavior is ok. … And I’m sick and tired of the people that are trying to call attention to the sociopathic behavior within our own movement getting trashed.”

Tatiana’s right, of course. Natural law doesn’t evaporate around people who wish to retain and use their liberties. If anything, we must be more mindful of universal human truths because we are the people exploring the boundaries of liberty. A tolerance for lies, manipulation, sexual assault, and broken contracts is not “What’s up!” in Liberty. Anyone claiming that such tolerance is “Cool” is not a libertarian. They’re just another asshole in disguise.

John Cobin Interview

I had the pleasure of interviewing John Cobin about GGC for 1.5 hours, last week. The interview was mostly for my E-book about GGC. However, of interest, here, is the remarkable consistency of Dr. Cobin’s story with everything he’s said from the very beginning. Cobin is abundantly forthcoming about every meeting, document, e-mail and conversation he’s had with respect to GGC. My reaction to the interview was to tell him that it was a pleasure to speak with someone involved in GGC that looks better and better with each discovered and documented fact about the project.

Cobin said the impression he got from Jeff Berwick and Ken Johnson was that, they alone, might be able to supply the funding for GGC. He had no idea that they would, almost immediately, take his extensive research and information about Chile and GGC and cut him out of the deal. Although he concurs with the possible psychopathy of Johnson he puts Berwick in the same category in terms of the way they defrauded him. And yet, I had the impression that, even now, he would be forgiving of Berwick if approached in some meaningful way to make restitution.

Cobin said Johnson came after him, very agressively, in a libel suit in Chile. Guess what happened when the court date arrived? Johnson was a no-show! I won’t compare a libel suit with a podcast debate, but, I’m becoming quite familiar with Johnson’s cowardice in the face of someone determined to tell the truth. So far, Johnson’s been a no-show on two podcasts about GGC that he, himself, dared me to participate in.

For those interested in Chile I highly recommend the interview James and Johnathan conducted with Dr. Cobin on Monday over at Borderless. Cobin proves himself to be THE reliable source for all of Chile and much of the rest of the “Expat” world, as well. Cobin’s book, “Life in Chile” greatly increased the effectiveness of my 21-day country-vetting trip to Chile in 2012. I look forward to reading his latest book, “Living in Chile” when I can come up for air over the summer.

GGC Theatre

Johnson has been roaming around the property making absurd videos in an attempt to document the damage done by the recovery team. Perhaps the investors share my hope that Johnson continue making these videos as they are helpful in documenting what Johnson, himself, has done.

One of the things Johnson harps on in the videos are the “Damages” done by the recovery team causing a poor yield from the wells. In fact, such poor yields were caused by Johnson’s complete ignorance and inept handling of the well work around the property. Despite the pleadings of the local workers Johnson put Manuel Hermosillo in charge of the wells and the work was terribly bungled. And yet, somehow, the investors end up blamed, yet again, for Johnson’s incompetence. Such GGC Theatre might be a useful prop to help Johnson influence the Chilean locals who have no idea what’s going on with GGC. To those who’ve read the first thing about GGC, however, they are just that much more documentation of Johnson’s failings.

Message to local Chileans:

Johnson’s accusations of others are a reliable confession of his own failings. There is truth in many of the disasters he documents but your messenger is the culprit, not the victim. Johnson’s “Investment” into GGC remains at zero while 76-investors and buyers have given $10.45 million dollars for the purchase of everything you see associated with GGC. 72 of the investors have been begging Johnson to leave for over a year.

What happens next?

First, most of the predictions made in Part 6 seem to be coming true. That includes Johnson hinting that he wants to sell water rights, again. Happily, he’s unable to do so with the current injunctions in place.

Johnson has some time while the ocean water recedes in preparation for a tsunami of new legal problems.

Some think Johnson will stick it out to the end because his claim to be “Working for” the investors is his only defense against the legal actions that have been filed against him. But, Johnson also claims he controls or owns everything (Vacillating between claims of control or ownership) depending on his audience and the phases of GGC. How could someone who owns everything be an employee? How could a trustee (Controls everything) claim to be a trustee of beneficiaries who have been begging him to leave for the past year?

Perhaps Chile, and the local populace of Curacavi, will no longer tolerate Johnson as the criminal charges pile on. If he’s made to flee then we may see more pictures of his backpacks of stolen money while he’s on the run. I think he still has a Paraguayan passport from the passport scandal he was conducting at TDV. Still, all these charges filed with state agencies will haunt him wherever he goes. As of today, Johnson has put a digital data noose around his own neck that will follow him around the globe.

Business

The Creature from Galt’s Gulch—The Book

By Terence Gillespie June 4, 2015

NOTE: Version 1 of this book is ready as of June 11th, 2015.

I’ve put all the articles of the McGillespie.com GGC series into book format and am supplementing it with the latest developments and documents from the recovery efforts. In addition to all the articles of the series the book contains:

An Index and description of all people involved, or referenced, in the GGC story.
QR Codes for videos, websites, media articles, etc.
Links to ALL publicly available articles and documents related to GGC.
A Chapter describing the types of fraud that were conducted around GGC.
A Chapter describing the five types of contracts that were used with investors and buyers of GGC “Products”.
A Chapter describing the Rio Colorado/GGC Share swap.
A comparison table of the eye-witnessed actions of Kenneth Johnson to Dr. Robert Hare’s Psychopathy Checklist (PCL-R).
Copies of all legal actions or criminal charges filed with regard to Galt’s Gulch Chile.
The original “Founders Club” document Cobin wrote, and Johnson later modified, and sent out to all investors who expressed interest in GGC.
The original Business Plan that got things started.
Download links for all PDF files related to GGC that are too large to be included in the book.

The book will be updated with all the latest developments around GGC including legal actions, criminal complaints, media articles, youtube videos, articles by Terence, and any significant releases from the recovery team.

This is not a traditional book but a working document meant to help the people involved and inform (And entertain!) the public. It’s currently 200 pages, and growing. I may add an index but the e-book format already enables the reader to search for their term of interest, quite easily. It’s currently in PDF format but I could convert it to EPUB and .MOBI if there’s enough interest. Please send me an e-mail if you would appreciate that potential effort.

The purpose of the Book

To Document, on an ongoing basis, what is happening with Galt’s Gulch Chile to assist recovery efforts, underway.
To be a trusted and reliable source for journalists and media outlets who may wish to write about various aspects of GGC.
To tell the truth about GGC while the facts are clearly in the memory of the participants and the evidence is freshly available.
To document the crimes of Kenneth Dale Johnson and others so possible future victims may be warned.
To Document GGC for legacy reference and lessons that may be gleaned for both GGC restoration and other such ambitious liberty-minded projects.

How to Get Your Copy

Version 1 is ready as of June 11th, 2015. If there’s an update I’ll post the version and date, here, on the page you’re reading.

Go to McGillespie.Com, type your name and e-mail into the boxes under “McGillespie Resource Library”, then hit the submit button. An e-mail will be sent with the password to the McGillespie Resource Library which contains the book and many other resources you might find useful.

For future updates (Or any problems downloading the book) use the “Contact Us” tab or leave a comment, below, on this page with your name and e-mail.

Business

Podcast Discussions about Galt’s Gulch Chile

By Terence Gillespie May 23, 2015

The Jetsetter Show with Jason Hartman

Jason Hartman and Terence Gillespie discuss Galt’s Gulch Chile and many ways to optimize the path for expatriates in Chile and Colombia. Jason has a wonderful transcription posted just below the link for the podcast:

JS 101: What Happened with Galt’s Gulch, Chile?

Borderless Network Podcast

In this episode we have Terence Gillespie on the show to discuss what happened with Galt’s Gulch Chile and some of the lessons that can be learned from what happened there.

Show notes:

The background on Galt’s Gulch Chile (0:50)
Who is Terence Gillespie (4:13)
Why does he care (5:18)
Was Galt’s Gulch a libertarian project? (6:36)
At what point in time did this deal fall apart? (9:40)
How was this theft possible? (11:42)
How much of the blame should go on the investors? (13:15)
What caused the change is perception in August 2014? (17:15)
What was Jeff Berwick’s role in this fiasco (22:30)
What is going to have to happen in order for this to turn into a successful project? (27:35)
Will the $10.5 million be recovered? (32:09)
Affinity Scam
Was GGC a fraud from the beginning? (34:54)
Lessons learned from GGC (36:36)

Business

GGC Part 7 — Jerry Folta’s Legal Action against IGGA

By Terence Gillespie May 9, 2015

Part 1: What Happened and When?

Part 2: Root Cause of Problems?

Part 3: How Might Problems be Avoided in the Future?

Part 4: What’s the Deal with Berwick and GGC?

Part 5: Feedback from the Recovery Team

Part 6: Johnson Re-Occupies Galt’s Gulch

E-mail Sent to Jerry Folta

From: Terence
To: jerry@foltas.com
Date: Mon, 04 May 2015 21:14:41 -0700

Jerry,

My name is Terence Gillespie, the author of the GGC
series Parts 1 – 6, starting here:

https://mcgillespie.com/galts-gulch-chile-story-timeline-references/

I’m writing to request a comment from you on an apparent snippet
of an e-mail exchange between yourself and Wendy McElroy that
Kenneth Johnson cut/pasted into the comments section of a recent
Panama Post article.

————————————
On May 1, 2015, at 5:04 PM, Wendy McElroy wrote:

Are you suing Ken J?

On Fri, May 1, 2015 at 5:08 PM, Jerry Folta wrote:

Absolutely not. Cathy, as is her way, got it wrong.”
———————————-

Here are my questions for you, Jerry:

1) When you wrote, “Cathy . . . got it wrong” did you mean that it was actually lawyer, Héctor Hernán Herrera Flores, who filed on behalf of entity “Jumpin’ G’s SpA” against Inmobiliaria Galt’s Gulch S.A. per this public document?

CORTED DE APELACIONES DE SANTIAGO
Sec: Civil Folio: 00240284
Procedimiento:
Jdo: 18 CIV Rol : C-007863
Fecha: 02–04-2015 Hora : 12: 42
Materia : C01

2) Is “Jumpin’ G’s SpA” your entity or one in which you have an interest?

3) Why did you use that entity in the “Promesa de Compraventa y Prestamo” with IGGSA for a 25 acre lemon orchard lot?

4) Who is required to respond to the action, Pamela Del Real or Kenneth Dale Johnson?

5) Why not use arbitration, which your contract allows, instead of a much more expensive civil action?

I’m writing an article about this filing as I think it’s applicable to the series, and more importantly, justice and restoration to investors such as yourself. Please respond within three days so that I may include your view on the matter.

I’m sorry for any losses you’ve had with respect to GGC. All private correspondence between me and you will be kept private, if you prefer. However, the questions I am sending you will be in my article. Please mark clearly any information in your reply that you would prefer to be kept private.

Thank you,

Terence GIllespie
McGillespie.com

Jerry’s Response

Hi Terence:

Jumpin’G’s SpA is owned by a Trust that I set up for the benefit of myself and my heirs. The current General Manager of IGGSA according to public record is Pamela Del Real. Arbitration is inappropriate because she became General Manager as a result of fraudulent actions. The approach I’m taking hopefully provides flexibility going forward in clarifying the legal ownership of GGC.

Once ownership is legally clear it is hoped all buyers/investors, including members of the Rescue Team, will take title to their properties (as well as GGC equity for First Round Founders) and GGC can be completed.

Jerry

Inference & Analysis

Prior to sending the e-mail, above, to Jerry, I published a detailed inference about it’s meaning with respect to GGC investors and Folta. Having now received Folta’s response to my questions I’ll supplement that public inference by adding comments to the original under the heading “To Which I Add/Clarify”. Here’s what I originally wrote:

Defendant: Galt’s Gulch S.A. . . . Don KENNETH DALE JOHNSON,
El Promitente comparador (Jumpin’ G’s SpA)

$450,000 US.

Here’s how it works GGC Investors: Jerry’s entity filed a civil suit against Inmobiliaria Galt’s Gulch S.A. on 4/2/15. Johnson lets the suit go through without protesting and Jumping’ G (Jerry Folta) “wins” the suit, by default.

Now, if Josh Kirley’s suit goes in favor of the GGC Investors then Jerry Folta is first in line to get paid. How? Because Folta takes the judgment and turns it into a lien against Inmobiliaria Galt’s Gulch S.A. Now, guess who has to get paid first when the entity (Land) is sold? Correct: Folta.

If Josh’s suit goes the other way then Johnson “pays off” Jerry’s suit for $1 or whatever.

Folta and Johnson have been playing both sides against the middle the whole time. This is just more of the same. I highly doubt $450,000 was ever given to Johnson by Folta. This is just a way for Jerry to recoup his losses with Johnson before the other 75 investors.

Now, do you see why Folta is technically telling the truth when claiming he’s not “suing” Ken Johnson? No, it’s his entity that has filed the suit. And if you question Folta about that then he’ll still deny it and even that is true. No money changed hands and he’s already agreed in advance on the sham with Johnson.

It’s a LIEN disguised as a CIVIL SUIT!

Welcome to the world of fiat money, invoices, bills, and yes, civil suits. Just because there’s a number on a suit between two supposedly “warring” parties does not mean any money has changed hands or that anything is really owed.

To Which I Add/Clarify

Folta’s action is filed against “Inmobiliaria Galt’s Gulch S.A.”, referred to as IGGSA. The original entity created by Cobin, et. al., was “Galt’s Gulch Chile S.A.. Therefore, Folta’s action is against Johnson’s personal entity into which he fraudulently conveyed receipt of GGC properties purchased with investor money. This fraudulent conveyance is the primary and largest fraud, performed by Johnson, that caused all the “controversy” about GGC.

Even if Johnson shows up to contest the action it could still go in Folta’s favor.

This is a legal, not a moral, inference that I’m making about Folta becoming first lien holder in line. Morally, all investors are equally entitled to restitution. Legally, it may not make Folta first in line but it would make him among the few investors with a state judgment in their hands, unless others decide to file such actions. Also, the lien would be against an entity holding stolen property. Whether or not the Chilean courts would recognize or consider this fact is anyone’s guess. That probably depends on the decision regarding Josh Kirley’s separate action currently awaiting a judgment

My hope is that neither Jerry Folta, nor any investor, would be foolish enough to go along with such a scheme with Johnson. Also, as written in my e-mail to Folta, the last thing I want to see is any investor losing more money to Johnson.

As described in Part 6 under the heading of “Litigation Pending”, I have since learned that Folta did purchase a Promesa (Option) for a 25-acre lemon orchard lot. I have no reason or evidence to believe that Jerry did not pay real money for this lot (Or an option for such a lot, anyway). My inference that Jerry is “Playing both sides against the middle” is based on his continued support of Johnson amidst an avalanche of evidence and eye-witness testimony that Johnson’s a crook. It’s also based on Jerry’s strange and veiled responses to specific questions from the recovery team and a rather misleading response to an e-mail from Wendy McElroy (A private e-mail made public by Johnson, I might add).

When you have people, entities, and representatives of entities, involved in legal filings things get murky and one can play lots of legalistic and semantic word games with the truth. There are so many combinations of possibilities for casually, but inaccurately, describing Folta’s action that anyone who doesn’t get the language exactly correct can be easily (And maliciously) accused of “not knowing what’s going on” or, in Cathy Cuthbert’s case, “… as is her way, got it wrong”. My e-mail to Folta was more specifically worded. As you can see by Folta’s response, Cuthbert was closer to the truth than one might gather from Folta’s dismissive, and unforthcoming, e-mail response to a straightforward question by Wendy McElroy with the same general intent. So, why didn’t Folta just explain the details?

And, what about Folta’s legal action might “clarify legal ownership of GGC?” If the judgment is turned into a lien against IGGSA then it most certainly is a lien disguised as a civil suit.

The Big Picture in Simple Words

Can the booty of a theft be liened?

Someone steals money from my partner and I. The thief uses the money to buy a car and puts his corporation on the title. Then the thief meets another thief who transfers the shares of the corporation into his name. Upon finding out about the car my partner panics and files a lien against the shares of the corporation. Now, what happens when the car is found and I try to get my money back? I can sell the car and split the money with my parter, right? Or, if we want the car we can keep it in our partnership, right?

Key: The GGC investors and Folta are the partners. The first thief is Johnson. Sarrazin and Ramirez sold the car. The second thief is Mario Del Real. Jerry Folta is the lien-holder. The GGC investors and Jerry are the rightful owners of the car.

The moral and legal answer should be that nothing downstream of the original theft matters. And, in the case of Jerry Folta’s legal action, a lien on the shares of the corporation formed by a thief with money he stole is merely a stopgap measure in case the original owners of the money gets shafted because everyone is so confused about the theft and the shares of the car.

It’s a little more complicated than that but I’ll expand on the metaphor in future updates.

Folta is hedging his bets in case the money won’t or can’t be returned to the original owners but the shares of the corporation may be returned to thief number one, Johnson. Actually, the second thief could keep the “car” and Folta’s legal action would still hedge his bets if his legal action prevails.

Anyway, That’s GGC in a nutshell, folks.

Business

Galt’s Gulch Chile, Part 5 — Feedback from the GGC Recovery Team

By Terence Gillespie January 28, 2015

Part 1: What Happened and When? — GGC Story, Timeline & References.
Part 2: Root Cause of Problems? — The Creature from Galt’s Gulch.
Part 3: How Might Problems be Avoided in the Future? — Contracts are Good for Libertarians, Too.
Part 4: What’s the Deal with Berwick and GGC? — Jeff Berwick & GGC: A Regrettable Summary.

Last week, a GGC investor working with the Recovery Team sent me an e-mail with feedback on the four articles I’d written about the Galt’s Gulch Chile land development deal. Though I’d sent the first two articles to John Cobin and Wendy McElroy, this was the first correspondence I’d had with someone directly involved with the deal. The first four articles were written from what could be gleaned from all public documents, radio shows, forums, facebook, articles and their comment sections. Part 5 brings the series current with new information and feedback from those involved. My hope is that such provides a bridge to future articles that may be of more direct assistance to real-time recovery efforts. To that end, this will be the last article that refers to Cobin/Ezyaguirre, in any significant way, as their initiating role has already been addressed and they were cut out of the deal early in the development.

As you read the exchange (And any article in the series) keep in mind that the actions of those involved are either good, fine, questionable, wrong, or illegal. Much of the last three categories can only be decided, in retrospect. The legalities depend on “the law” of one’s vantage point: Natural, Chilean or US. My opinion is that most all of Johnson’s actions were wrong from the standpoint of natural law as I see nothing indicating he ever intended to keep his promises to those involved. The Recovery Team would prefer to remain diligent and prudent in refraining from making legal judgements without supporting evidence.

Recovery Team: Part I: It is not clear that the project had enough water for the development as Cobin advertised. As you know, it’s a dry climate, and scope of the project was large. However, another huge problem was that it is all environmentally protected. I have been told that the gov’t will allow only 12 parcels to be carved out of it.

Terence: Yes, Cobin’s water estimates could only be realized if all the wells were cleared, consolidated and inscribed to the property. Cobin said he and Eyzaguirre could do it (Restated by Cobin on his radio show during Berwick’s apology episode) and such was to be a crucial part of their contribution to the deal. Everything I’ve read indicates Johnson and Berwick cut ties with Cobin before the property was purchased. Johnson’s accusations against Cobin, or anyone else, for that matter, hold no weight because of Johnson’s clear pattern of accusing others of his own failures.

I hadn’t read that environmental concerns were tied in with the inability to zone the land, properly. If so, overcoming this obstacle would be as crucial to the project as consolidating the water rights.

Recovery Team: Also, I think you said–or maybe implied–that Cobin/Eyzaguirre somehow put money into the project. Other than pocket money, maybe, you are mistaken.

Terence: I see Cobin’s contribution as significant but non-monetary. He had the vision, chose the location and got the project rolling by involving Berwick to attract capital. This is what enabled Berwick and Johnson, neither of whom had stepped foot in Chile prior to flying down to meet Cobin, to connect with a large development deal within hours of their arrival.

Recovery Team: I doubt that Del Real and Johnson lived together. At one point early in their business (if you could call it that) relationship, Del Real bought office furniture, put it at the farm office and he and his daughter were working there. I’ll double check on that.

Terence: Berwick made this comment when talking with Cobin on his radio show. Since Johnson’s “sale” of GGC stock to M. Del Real and his daughter, Pamela, is important to the recovery, perhaps their living and working arrangements are worth knowing about.

Recovery Team: You imply throughout that Cobin/Eyzaguirre were necessary to the success of the project, but I doubt it. I have not met either person, but I have heard Cobin on the internet and have seen his astronomical consulting fees. Why Berwick/Johnson would agree to the equivalent of a finders fee of 25% for that property that can’t be developed is beyond me. Further, see attached the ridiculous marketing material that Cobin spearheaded. This wreaks of scam–$1M revenue per year for fish? Selling electricity? Selling water??? Too bad they didn’t continue on this vein, I would have been spared my losses since I wouldn’t touch the project with a ten foot pole with Cobin and his spin involved.

I am sure that had Johnson not been Johnson, he would have been able to find someone in Chile to develop the project. Cobin/Eyzaguirre were never necessary.

Terence: It appears Johnson did only enough “work” to muddy the waters for his cons and overpriced Chilean side-deals. Cobin/Berwick say the finders fee and GGC sales percentage was based on Cobin finding the land, creating the deal, negotiating the price of the first property, El Penon, to be $270/acre, and consolidating and inscribing the water rights. However, what Berwick and Cobin promised each other is between them. Nothing I’ve seen ties Berwick’s promise to Cobin to the GGC investors who probably never set eyes on Cobin’s business plan. Aside from his optimistic estimates the significant part of the document, for me, is that it shows that Cobin was fooled by Johnson’s persona, as well. It also shows that he had no idea that Berwick and Johnson would shortly cut him completely out of the deal.

Recovery Team: Part IV: Johnson lived off us for 2 years, not 3–from sept 2012 to sep 2014.

Terence: Very glad to hear that! I’ll update the article.

Recovery Team: The biggest hole in your articles is that you don’t even touch on the real story. This is NOT a purely gringo on gringo scam. Johnson could not have done what he did were it not for willing accomplices in Chile. There is a string of crooked notaries and lawyers enabling his illegal activities. Further, the Chileans, being good scammers themselves, sniffed Johnson out and then scammed him. Our problems now are that the overt scam artist, Mario Del Real, took control of the company and will not give it back, and that the seller, Guillermo Ramirez, appears to have 1. gouged Johnson on the price of the property, 2. misrepresented the water situation, and 3. may have been in partnership with Johnson in running up huge late fees. Johnson was never able to pay any but the first payment on the land on time. One document I have says that $1.14M in late fees were paid.

Terence: Wow! I stayed out of all the swaps (Sales?) and side-deals referred to in the “Kerfuffle” document to focus on the overall story and the gringos, first. I certainly understand that, from the GGC investors point of view, these are the most important aspects of the current recovery.

Recovery Team: Further, the whole time that one would think that Johnson would be very busy with obtaining the proper permits, managing the development and farm, as well as overseeing marketing and sales, he was looking for other “great deals” in Chile. That’s how he was scammed with the Rio Colorado deal. He also pursued buying water in Patagonia (?), and various bitcoin projects–he stole $100k from one of our investors with a bitcoin deal. He even put bids on a neighboring property and tried to negotiate a sort of lease-option arrangement with other neighbors. To the bitter end, he was sending emails telling us about how he was going to build a large solar greenhouse. Yet during all that time, the permits to subdivide the property were getting nowhere, the farm was deteriorating, and employees and vendors were being stiffed.

No vat tax was ever paid by Johnson for the sale of the lemons harvested and sold on the property. Last week, we finally had a visit from SII. Why couldn’t they have shown up when Johnson was stiffing them?

Terence: Whew! What a tangled mess. How intriguing that Johnson, himself, might have been scammed while he was using GGC investor money to protect himself from GGC investors. Unfortunately, lying to the bitter end is another characteristic of psychopathic behavior. For those who haven’t yet watched the documentary, “I, Psychopath” it’s worth the time:

I noticed Mario Del Real is described as having previously worked for the Chilean IRS (SII). Perhaps there’s a connection between his expertise and the timing of SII’s visit? Either way, bad timing all around.

Recovery Team: I have a descriptive timeline I’ve been working on. It definitely needs more work, but I’m supplying documents with nearly every entry. I’m also working on a financial timeline with documentation. I’m waiting for more accounting information to finish these.

Terence: I can’t think of anything more important to recovery efforts than such a timeline and the documents that go along with it. I’ll update the timeline in Part one with anything you can pass along.

Recovery Team: Btw, Jerry Foltas posts on the GGC webpage are not correct. I’ve caught him several times in contradictions. His only response to me is that I’m not reliable. yeah, right. I provide documents for everything I say, and I am trying to be especially careful to make no accusations. I try simply to present the documents and let them speak for themselves.

Terence: As an outside reader I can barely get through Folta’s “Newsletters”. I thought him a Johnson created sock-puppet prior to reading that the team had met with an actual person of the same name outside the GGC office. While reading Jerry’s “Newsletters” my theory was that he had taken advantage of the absence of a shareholders agreement (Which would have given a Right of First Refusal of IGGSA shares to all investors) and coaxed GGC shares out of Johnson in order to gain control of GGC. This would be “playing both sides against the middle”. A more tragic reality for Folta would be if, having lost his initial investment, Johnson scammed him again and Folta lost more money in return for GGC shares that were not Johnson’s to sell.

Where’s the Libertarian Media?

What’s with the absence of Libertarian commentary on Galt’s Gulch Chile? Even the Libertarians that spoke at the GGC Fall or Spring event held on GGC grounds in Chile seem to have little to nothing to say. The Recovery Team knows that the attendance of these libertarians was never an endorsement and that they had no access to information that would enable them to vett or endorse the project. It would be nice, however, to hear more from Ben Swann, John Tolley, Bob Murphy, Luke Rudowski, and others that actually set foot on the grounds.

Note: All articles on McGillespie.Com may be reposted in full, or in part, per Creative Commons license “By” and “Share-alike”.

Regarding Investors

I didn’t say much about the Founders or the investors in my first four articles because I didn’t know anything about them. As of today I do know this: The Founders had no idea what Johnson was doing. It’s beginning to appear that Johnson used Founder money to hire lawyers to protect himself against the Founders, themselves. They were confused with Berwick’s incompetence, and Johnson’s series of thefts and counter accusations, until mid-2014. They probably thought disagreements between Berwick and Johnson were that of typical partners, each with 50% ownership but neither with majority control. In fact, even today, it’s a tough forensic task to piece together the timeline and documents Johnson withheld from investors to the end.

Prior to his investment, Josh Kirley (One of the first investors) hired a Chilean law firm and offered them an additional bonus, above and beyond their hourly rate, if they could come up with any reason to not move forward with his investment into GGC. When they came up with nothing Kirley followed up with a background check of Johnson and still, no red flags appeared. Onlookers may protest that any number of items on some personal due diligence list were not covered but Kirley’s first two efforts at protecting his investment were quite bold. Contrary to popular understanding, lawyers are trained to find fault with, not enable, contracts and deals. And yet, they came up with nothing.

I’d also point out that the sophistication level of those who were fooled by Johnson’s psychopathic behavior is rising with every stone of this story unturned. Cobin’s business plan even documented Johnson’s many possible contributions to GGC as if they were additional selling points of GGC. It would be a mistake, therefore, for readers to believe that such behavior will be obvious should it be encountered, personally.

What’s Next?

The money and ownership trail of GGC has been greatly muddied and confused by Johnson’s complex maze of stock swaps (Sales?), director appointments, multiple bank accounts, additional overpriced purchases, missed payments, secondary entities, bitcoin theft, and suspicious penalty clauses, etc. These are the sorts of things Johnson was “working on” while claiming to investors that he was busy developing GGC. Even today, the investors are attempting to piece together the basic financial statements and reports that Johnson had been denying them for so long. The documents they’re discovering reveal a maze of deceit rather than land development.

Money invested into GGC was always about purchasing land. There are still many reasons to hope that, if investors can’t recover money, they might recover land. It wouldn’t be a total restoration but it would restore control of what was always at the heart of the deal.

It took four articles to tell the story of what happened, why and what others may do to avoid problems like this in the future. I didn’t follow the maze of Johnson’s deals (Likely made possible by Chilean collusion) as it wasn’t relevant to those purposes. However, it most certainly is relevant to efforts to recover money or control over the land. If I can make a contribution in that area, I will. The focus now is on substantiating Johnson’s activities and the gaggle of Chilean swindlers that may have followed in his wake.

I’ll conclude Part 5 with an open message to Jeff Berwick: I’ve run across the name of the investor Berwick referred to as left homeless having lost everything on his investment into GGC. This investor is, indeed, in dire straits. If Berwick is ready to keep the promise he made on the Freedom Feens Radio Show then now (1/28/15) would be an ideal time for him to help this investor. I’m sure someone on the Recovery Team would be happy to pass along his current location. Contact them at ggc.pressrelease@gmail.com.