Costa Palmas Jason Grosfeld & Irongate Again Accused Of Fraud And Conspiracy - The Texas Developer

Costa Palmas Jason Grosfeld & Irongate Again Accused Of Fraud And Conspiracy

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Los Angeles based Martell Capital Group, LLC d/b/a Irongate, along with its Founder, Jason Grosfeld, and key management employees, David Waller, Mitch Laufer, and Michael Radovan, have been accused of fraud, extortion, and conspiracy in connection with Irongate’s development and sale of luxury homes in Costa Palmas, Los Cabo, Mexico. According to public filings, as well as prior reporting and current investigations, Irongate has allegedly engaged in a long-standing and wide pattern and practice of fraud, deception, theft, extortion, conspiracy and other unlawful conduct to dupe and/or extort millions (possibly hundreds of millions) of dollars out of unsuspecting and innocent buyers who believed they were buying high-end custom homes and condominium units in luxury developments in Mexico, using special-purpose Mexican entities to shield themselves from liability.

Irongate has a long history of complaints about its business and construction practices, including a class action lawsuit in 2008 over misuse of $30 million in buyer deposits for non-existent units in the highly touted Trump Ocean Resort in Baha California, Mexico, and multiple lawsuits involving various development projects in Hawaii. Homebuyers in Costa Palmas claim that Irongate has developed a strategy to defraud, steal from, and extort millions from buyers with impunity, and that Irongate has implemented that strategy in Costa Palmas, hiding behind contracts that force Irongate’s victims to look solely to Irongate’s Mexican allies for relief.

Recent filings in courts in California claim that Irongate, primarily by and through Mr. Radovan, Mr. Waller, and Mr. Laufer, repeatedly lied to potential buyers in Costa Palmas about the costs, timing, and construction of their homes. Specifically, these plaintiffs allege that Irongate took tens of millions of dollars in deposits and upfront design, materials, and construction costs from buyers based upon false promises that Irongate would devote its resources to timely construct their homes based on hard bid budgets and “open book” construction. According to the lawsuits and sources within Costa Palmas, these promises were a worthless bill of goods: Irongate has falsely represented that it would allow buyers to cap costs through fixed price contracts with no intention of keeping that promise and with every intention of severe price gouging; Irongate has sold homes that did not exist, using classic baith and switch tactics; Irongate has taken millions of dollars from buyers meant to purchase, labor, goods and materials for their homes and used it on other homes or put it in Irongate’s pockets; and Irongate has used threats and intimidation to scare buyers into submission.

Based upon interviews with some of Irongate’s victims, who wish to remain anonymous due to fear that Irongate will punish them, lying appears to be a major component in Irongate’s playbook. As one homeowner in Costa Palmas stated: “calling Mr. Waller a compulsive liar would be complimentary as it doesn’t come close to measuring his lack of integrity.” That homeowner complained that “you cannot trust anything they [Irongate representatives] say,” explaining that many Costa Palmas buyers have it worse, but they are afraid to sue and succumb to Irongate’s threats of taking away their Memberships in the Costa Palmas Beach & Yacht Club if they rock the boat. Another owner in Costa Palmas similarly described dealing with Irongate, stating “nothing that was represented has ever happened” and describing Mr. Radovan and Mr. Waller as “playing manipulative games.” Other sources have described Irongate’s business practices as racketeering and claim that Irongate employees in Costa Palmas have left the company because of the controversy.

In addition to the lawsuits filed against Irongate and its affiliates in the United States, sources say that criminal investigations are underway in the United States and Mexico and may result in charges.