Galt's Gulch Chile: An Overview of Ken Johnson's Libertarian Affinity Fraud

Future convicted felon
Kenneth Dale Johnson

Galt’s Gulch Chile is the name of a proposed residential community to be built near Curacaví Chile, approximately one hour west of Santiago and one hour east of the Pacific Ocean. The original principals were John Cobin, Germán Eyzaguirre, Jeff Berwick (The Dollar Vigilante) and KENNETH DALE JOHNSON. Through a series of broken promises, broken contracts and dishonest maneuvers, Johnson was able to cut his partners and investors out of the real estate development project and claim 100% ownership and control.

He proceeded to develop, not a community as advertised, but an affinity scam aimed at Western libertarians. Johnson employed deceptive selling practices, violations of US and Chilean law, money laundering, and multiple jurisdictions to defraud his investors of US $10.45 million ($10.05 million with GGC and $400,000 with tangential scams).

Johnson’s total invested capital: $ZERO.

In April 2014, Johnson himself lost his fraudulent ownership and control of the real estate holding company for Galt’s Gulch Chile to his erstwhile partner, Chilean swindler Mario Del Real. Also due to his questionable dealings, the flow of investor funds into the project collapsed making it impossible for him to pay the final installment for the parcel that was to be GGC’s main building site.

As of November 2016, the investors do not have title to the residential lots, orchards or shares of Agricola GGC (the farm operating company) for which they paid and that Johnson agreed to deliver. Loan payments to GGC investors have not been paid. In addition, titles to two GGC companies and the two parcels that were to become Galt’s Gulch Chile are clouded. The project is insolvent.

This fake subdivision map was allegedly drawn without the completion of engineering studies. Johnson used it to dupe Libertarian investors into believing there was a development under way.

With Johnson’s investor-instigated sabbatical beginning in late October 2014, the investors occupied and maintained the GGC farm at the Lepe property. On April 21, 2015, Johnson took back the farm by hiring armed thugs to terrorize and oust the investors’ employees. He is currently squatting on the property, letting it go to ruin while he spends his time slandering and libeling GGC investors and former employees on the internet.

Johnson, Del Real, and the previous owner of the Lepe/Las Casas property, Guillermo Ramirez, are blocking the investors from gaining control of the assets to continue the project.

In addition to his overarching strategy of the libertarian affinity fraud (see our post, http://ggcrecovery.com/isnt-ggc-just-a-case-of-libertarian-in-fighting/), Johnson used the following tactics to perpetrate his scam.

1. Isolated the investors from each other. Because we were unable to meet and communicate to compare notes on our uneasiness with GGC, Johnson was able to delay any concerted effort to remove him.

2. Fomented distrust and dissent among his partners, employees and investors so that they would fight each other and not him.

3. Compartmentalized information. No one but Johnson had the full picture of what he was doing. He did not even have an accountant for almost a year into this multi-million dollar project, with the accounting firm quitting six months later due to non-payment of their fees.

4. Never answered questions. Ask him how much water is in the aquifer under the Lepe/Las Casas property. He’ll tell you about the surface water rights, the subterranean water rights, how much they’re worth, how many wells there are, the quality of the water, he’ll show you videos of the fast flowing canal after a hard rain, pictures of the retention ponds, and on and on and on. But he’ll never answer the simple question: How much water is in the aquifer under Lepe?

5. Acted passive aggressive. We have been demanding the full accounting for the GGC project for well over two years and we still don’t have it. Of course, he told us many times and in many ways that he would get us that information. He assured us that he has nothing to hide, that he wants to be cooperative, that he’s willing to be open with all information. We are still waiting for the accounting.

6. Played upon the gullibility of the weak-minded among the investors to stall, gain time and con them into supporting him, including, amazingly enough, with money. Yes, you read that right. One investor claims to have paid Johnson a significant sum AFTER BEING TOLD THAT JOHNSON IS A CROOK. Takes all kinds…

7. Lied loud, long and often. Johnson takes a small truth and envelopes it with the most idiotic, outlandish, convoluted pack of lies he can invent. Since no one knows all the facts, people are swayed by his persistence. Here’s an excellent example. Sales for GGC collapsed in February 2014 mainly due to Johnson defrauding his partner, Jeff Berwick, who was providing the marketing. If there’s no marketing, there’s no sales, obviously. Johnson takes the fact of crashing sales and blames it on The GGC Recovery Team saying we scared away other investors to purposely destroy the project so that we can scoop it up for pennies on the dollar. Funny thing, though, The Recovery Team didn’t exist until October 2014. If we didn’t exist as a group, had never met, didn’t even know about each other, exactly how did we hatch and implement this nefarious plot? That’s a question we’ve asked Johnson. See #4 above for his answer.

8. Blamed everyone else for his incompetence and dishonesty. Nothing is Johnson’s fault–except that he is just too trusting, that poor Li’l Kenny Fraudster.

Johnson came back to the farm in April 2015 to establish his only defense against criminal charges of general fraud. He needs to weave a credible story that his goal all along was to “build a community at GGC.” He has to pretend that all the damage he and Del Real caused was the investors’ fault, the employees’ fault, someone’s fault, anyone else’s fault. He is play acting at moving forward with the subdivision approval for the residential areas.

This strategy won’t work. Not only has he accomplished nothing since his return to the farm, we have too long a paper trail, too much evidence and too many eye witnesses for Johnson to wriggle out of jail time.

Now, future convicted felon Johnson’s main tactic is delay, delay, delay. He thinks that he can wait out the investors, that we’ll grow weary and move on. His two Chilean partners in crime, Del Real and Ramirez, think so, too.

Not a chance. We’re dedicated to turning Fraud’s Gulch Chile into Galt’s Gulch Chile. That’s what our website is all about.

For more information, please see our webpage. Thank you for reading.
Cathy Cuthbert * GGC Recovery Team * http://GGCRecovery.com