Galt's Gulch Chile Buyers And Investors Take Back The Project In Daring Night Raid

[The following post is by TDV Chief Editor, Jeff Berwick]

On August 27th of this year I wrote, “The Good, The Bad and The Ugly on Galt’s Gulch Chile” where I outlined major management competence and fraud issues at Galt’s Gulch Chile.  It took the liberty and anti-liberty media by storm.

While I had announced that these issues did not mean Galt’s Gulch Chile itself was a fraud, nor that it was a dead project, many people took it that way and for more than a month both I and all the buyers and investors at GGC were pounded with vitriol.  Some of the pro-liberty media and commenters called us frauds, suckers or, at worst, having given libertarianism a black eye.  And the anti-liberty media had a hayday proclaiming that “this is what happens when libertarianisms try to create a libertarian project”.  Salon.com was the most egregious, salivating at the thought that a massive project based on libertarian ideals would have major problems.

Lost in the mix was the truth.  As I stated in August, at the end of my article, “This will come to a resolution one way or another.  This is not the last you will hear about Galt’s Gulch Chile.”

That happened last week when after a few months of due dilligence, research and planning, what was for all intents and purposes a libertarian SWAT team descended upon Galt’s Gulch Chile to take it back from Ken Johnson who was the one and only focal point of failure and fraud.

After months of avoidance of the issues and no resolution from Ken Johnson a group of military trained marines came to GGC to take back the project by any means necessary.  What follows is almost out of a Tom Clancy espionage thriller.

THE GGC RESCUE TEAM

The following is a full report from the 5-man reconnaissance and rescue team… I will let it speak for itself!

GGC Rescue Report–Capture Flag

The GGC Rescue Team for Galt’s Gulch Farm arrived on the morning of October 23, 2014. EJ Lashlee, Senior Trustee for GGC Rescue Trust, as Team Leader, and Tom Baker, leading the criminal investigation held a two hour meeting at SCL airport terminal discussing the recovery. Chilean based employees and investors met with the team.

There were multiple meetings all day with police, officials, attorneys, and security, while the team also attempted to locate Mr. Johnson.

After a visit with police commanders at 9pm, as well as a previous meeting with earlier shift commanders, we proceeded to Galt’s Gulch Farm to attempt a meeting with Mr. Johnson.

Upon arrival, and waiting at the GGC gate finding no one, we tracked down a sleeping senior man who had a key and opened the gate. We proceeded toward the club house/office to find no vehicles and an apparently abandoned GGC. Soon, we found an individual crashing there, (not a paid employee or management). We secured the area and went looking for Mr. Johnson, searching all the rooms. 

All we found was an unfinished clubhouse without doors on half the building, trash, rodent droppings, dog odor, and no food, heat, or evidence of any activity, other than an industrial sink full of dirty dishes and the countless dogs on the expensive furniture and beds. In the “master bedroom” where Mr. Johnson slept, the stench was overwhelming, and the trash made it difficult to navigate. The luxurious bathroom Jacuzzi, shower, and sink were covered in filth, and the toilet backed up with feces. There was no hot water, no heaters and no working shower. Flushing the toilet revealed that the floor seal was not sound, leading to flooding without clearing the blockage.

Shortly thereafter the GGC Jeep blasted into the parking lot. We expected Mr. Johnson, but the driver was a bitcoin investor named Dan who has been “working” and residing at GGC while attempting to recover his investment or get his money back. Mr. Johnson sent him to reconnoiter, while he, evidently too scared to enter, likely hid outside the gate in the bushes and in total darkness, awaiting a report from his scout.

We asked Scout for his phone and the keys to the jeep, both of which are GGC property. He turned over the phone, but attempted to leave in the Jeep. We refused to allow him to go, and had multiple discussions with him as to his investment and the whereabouts of Mr. Johnson.  He was very secretive and kept trying to trick us into allowing him to leave in the Jeep, but finally gave us the key a few hours later. He stayed the night in his rat’s nest of a bedroom, and eventually walked outside and informed Mr. Johnson of our request for a meeting.

Since there were no clean places to sit or sleep, EJ moved the GGC Jeep and parked it at the front entrance blocking the gate, while other security patrolled the grounds.

RECOVERY OF REAL ESTATE – OCTOBER 24

Around daylight, Ian Thornton (Johnson’s personal translator and crony) arrived and attempted to gain entry. The police were called.

Upon police arrival, a pleasant discussion was held by all parties. As the police commanders had been contacted the day before, they came prepared to review documents. It was determined that the Rescue Team would maintain control of the property, and that Mr. Thornton had been fired and was not permitted entry. The GGC Jeep was offered to Mr. Thornton by the Rescue Team, as they believed it worthless, and the bank was attempting to repossess it for nonpayment. The GGC Rescue Team gave everyone sandwiches, including Mr. Thornton. EJ went outside the gate to discuss Mr. Thornton‘s continued assistance to Mr. Johnson, warning of criminal actions and offering him the suggestion that he disassociate from criminals or risk being included as a co-conspirator. Pleasant goodbyes were made to both Mr. Thornton and Scout who unceremoniously left the property. The Rescue Team then began to speak to the remaining employees, mostly the Chilean farm workers, to explain the situation and alleviate any discomfort. Their relief was clear.

SECURITY – There was no effective security prior to our arrival. The old man was mostly sleeping and did not appear to be securing much of anything. So, an external security company was hired, and we immediately moved forward on designing a guard shack at the front gate. The next day, materials arrived. Eight cameras, electric gates, fences, alarms, communications, and screens will be managed from the guard shack. Photos to follow.

FARM OPERATIONS – REVIEW

Mr. Thornton had been managing lemon sales and all the cash was split between Mr. Johnson and Mr. Thornton. The excellent farm staff kept meticulous records which will be of great use to the Rescue Team while building a criminal case against Mr. Johnson and Mr. Thornton for embezzlement. The Rescue Team also brought in a new Farm and Property Operations manager to support the understaffed team. All utilities were behind on payment, and the company phones were shut down the night of ousting. All have been returned to functionality.

HACIENDA, CLUBHOUSE, GUEST OPERATIONS -

The Rescue Team kicked out all the dogs because they were eating the peacocks, and started clearing places to sit and sleep. By evening, a few rooms had been emptied, hosed down, and new furnishings pulled out of the store rooms and installed. We found one white peacock inside the clubhouse this morning, so the dogs hadn’t eaten them all. 

Meetings were attended offsite in various legal offices by each team member. Necessary food, repair materials, and security items were picked up or ordered and a new qualified GGC General Manager was hired.

There was an unused junk filled room that was cleared and made into a GGC Operations Office.  Desks, expensive supplies, and computers were installed and the central compound location is perfect to manage all of GGC. Already, the staff is assisting in operations and preparing daily reports. These reports have already confirmed that most lemon income has been skimmed off by Mr. Johnson and Mr. Thornton.

The Hacienda/Clubhouse contains five bedrooms that are being converted into suites. Mr. Johnson’s room has been renovated as the best and renamed the Justice Suite, while the other new suites are in renovation as the Freedom Suite, the Honor Suite, the Friendship Suite, and Liberty Suite. All are now functional, though missing some embellishments. The two interior bathrooms that were half-started more than a year ago are still incomplete, but the Rescue Team hopes to start work on those soon.

The decks are new, but must be treated or will soon deteriorate.

GAME ROOM

The former sales office has been cleaned and repurposed as a game room. The carpeting had to be ripped out in order to remove the fetid dog odor. The on-staff gardener is working away, trimming flowers, bushes and repairing walkways to make the whole compound more functional and beautiful.

The amount achieved on site in a small amount of time with such few hands is extensive, and makes one wonder how it managed to fall into such disrepair. While the aesthetics are enjoyable, the attitudes of the employees and the work environment have turned 180 degrees. Ken Johnson’s reign of terror has ended. 

NEXT STEPS FOR GALTS GULCH CHILE

The incredibly smart, connected and vigilant group of GGC buyers and investors that I have been supporting have now taken back physical possession of their property.  Of course, the use of lawyers and police are unfortunate but there is simply no other way to take back possession of what is rightfully owned without using them as any physical takeover would result in the GGC buyers and investors becoming the criminals and not the victims in this affair.

Now the next long, hard step is filtering through all of the contracts, documents and liabilities that Ken Johnson has entered into and by the sound of things the state of affairs in terms of paperwork is similar to the state of affairs of how he kept his quarters at GGC… in other words, it looks a lot like the TV show Hoarders.

The GGC buyers and investors have put in enormous effort to date and will continue to do so to salvage this project so, once again, this is not the end.  All manners of fraudulent looking documents and contracts have been found and it will be a while until the team can untangle it all.

If they can, however, this will be the turnaround story of the decade… and one that is worthy of a book or screenplay!  Of course, if it all turns out to be a big success Salon.com nor any other mainstream media will ever mention it again.

As for Ken Johnson, the government and police in Chile are looking for him and the press is covering the recent GGC rescue team takeover and commenting on the disappearance of Ken Johnson who is so infamous now he has his own nickname, “El Gringo de Lepe”.

The last word of his location is that he has gone into hiding in the woods around GGC.  Knowing what I know about the GGC Rescue Team and their abilities he better hope the police find him before they do.

It’s too bad Ken Johnson wasn’t a libertarian nor even read Ayn Rand’s Atlas Shrugged upon which the idea of Galt’s Gulch was embodied.  If he had he may have come across one of Rand’s quotes, “You can ignore reality but you can’t ignore the consequences of ignoring reality”.

Galt’s Gulch has been reclaimed by its rightful owners and Ken Johnson’s reign of terror has ended.  This is not the last you’ll hear of Galt’s Gulch Chile.