16 July 2024 , 18:23
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Jason Grosfeld is the son of James Grosfeld, who ran Pulte Homes and is one of the largest shareholders of ESG firm Blackrock. Irongate, the development company by Jason Grosfeld, Mitchell Laufer, and David Waller, has been sued numerous times for real estate fraud, including a failed Hawaii development with Donald Trump.
Two more recent lawsuits detail the lengths Jason Grosfeld and Irongate will go to perpetuate their alleged scam of taking clients’ deposits and using sketchy methods to extract money from them.
The lawsuit detailed below involves intentional fraud, promissory fraud, fraudulent concealment, constructive fraud, extortion, attempted extortion, tortious interference with contract, breach of contract, breach of covenant of good faith and fair dealing, and civil conspiracy.
The numerous lawsuits filed against Martell Capital Group, Irongate, their principals, and affiliates, including Jason Grosfeld, David Waller, Michael Radovan, and Mitch Laufer, showcase a long-standing and wide pattern and practice of fraud, theft, extortion, deceptive business practices, and unlawful conduct to dupe and extort millions of dollars from unknowing and innocent buyers who came in excited to buy beautiful custom homes, condos, and property. Irongate tries to shield itself from liability using special-purpose Mexican entities and shady tactics to try and leverage its buyers.
2006 Baja Mexico Donald Trump Misuse of Funds
While Donald Trump has been indicted, another of his old partners has been flying under the radar. In 2006, 150 Buyers had been duped out of more than 35 million dollars in deposits for units that were never built; Irongate’s lender characterized this as a “massive misuse of funds.” When Irongate started the development of Costa Palmas in Cabo San Lucas, Mexico, in 2016, they targeted high-net-worth buyers from America. Their construction company appears like a Ponzi scheme to take or divert money from American home buyers for profit.
As part of the Irongate Cabo San Lucas Development scheme, Jason Grosfeld and his affiliates have repeatedly lied to American buyers about their homes’ nature, costs, financing, timing, and construction. Irongate has taken millions of dollars in deposits for the housing projects and, in some instances, has represented to buyers that they would allow them to cap costs through fixed price contracts, knowing that once the buyers were far along enough with the project, they have refused to cap costs and then engage in a severe price gouging endeavor.
Numerous bait-and-switch tactics have been used. In some instances, Irongate has used millions of dollars from buyers for purposes other than constructing those homes and/or charging them millions of dollars for labor and materials that were not used or at grossly marked-up figures. Irongate has engaged in repeated acts of threats, intimidation, extortion, and attempted extortion, forcing buyers to pay millions of dollars more than they agreed to pay by holding their homes hostage, and in some instances, this has erupted to new lawsuits against the affiliates of Irongate and Jason Grosfeld in both Los Angeles, California and Mexico.
Costa Palmas Mexico Lawsuits
With strong-arm tactics and adhesion contracts with Mexican entities containing arbitration clauses in Mexico, unconceivable waivers, and releases, Irongate forced American buyers to sign. Suppose one challenges Irongate for their purported fraud. In that case, they remove their valuable property rights and refuse to complete construction of or convey occupancy to their homes, along with heavy-handed threats, intimidation, and acts of extortion.
Baja California, Mexico Fraud With Donald Trump
By now, you may have noticed a pattern of behavior here. Around 2008, 190 plaintiffs sued Irongate’s predecessors and affiliates of the Trump Organization for fraud arising from a multi-million-dollar luxury residential development in Baja, Mexico, for the Trump Ocean Resort.
In this lawsuit, the plaintiffs allege that Jason Grosfeld and the Irongate entities knowingly and fraudulently misrepresented Donald Trump’s role in the project. The status of permitting, construction schedules, and financing for the project and the buyers’ deposits to Irongate would be held in escrow and used solely to construct their units. However, the funds were spent only on getting permits, and they never got a construction loan. After the lawsuit was filed, Irongate was forced to pay back more than $30 million in deposits for presold units, most of which they never received back. Around October 2012, Irongate settled the lawsuit for 7.5 million dollars.
Investigative Journalism into Jason Grosfeld Fraud By Univision News
Interviews with Mexican authorities found that Irongate and Jason Grosfeld misled buyers for almost two years while greatly exaggerating the number of unit sales and falsely telling buyers that permanent financing had been secured for the development project, even though that was a flat-out lie. Irongate repeatedly told buyers that construction was in progress, but after two years, there was only a large pot with a few slabs of concrete, according to the well-respected Univision News source.
Their investigative journalists found that contrary to Irongate’s representations, their single-purpose subsidiary, PB Impulsores, obtained a permit only for constructing one tower in July 2008, over a year and a half after the units for the 1st tower were sold to investors. Irongate never obtained authorization to construct a second tower, even though more than half of its units in that second tower were based on representations that construction was permitted and underway. Univision also found that one of Irongate’s lenders, MKA Capital Advisors, discovered, as they said, “a massive misuse of deposits used to cover overruns.”
In a one-page accounting provided to buyers in 2008, Ironagte’s Mexican affiliate said it had spent $45.3 million on the project, had not obtained permanent financing, and was out of money. The accounting said that $8.7 million went to advertising and marketing, $8.3 million to acquire the land, $6.9 million on architecture and engineering, $6.4 million on loan fees and $2.6 million on “site and building costs which ended up being nothing more than a giant hole in the ground and a couple of slabs of concrete according to the Los Angeles Times report about the failed development fraud and project.
Conclusion
The culture of Irongate seems to be controlled by Jason Grosfeld. Most of the initial funds that got Irongate out of the ground appeared from James Grosfeld and Blackrock. Warning: If you are not thinking about how to protect your money, Jason Grosfeld is probably thinking about how to take it from you, and he has been sued for labor law violations in Los Angeles, California.
Fraud
Total Score 1/5:
Jason Grosfeld has been sued numerous times and called a fraudster over developments in Mexico, Hawaii and Labor Law Violations in Los Angeles, California.
Pros
Has Ties to Donald Trump
Will Sell You the idea of a dream home
Cons
Has Been Sued For Fraud Numerous Times
Been Sued for extortion
Will ask for more money without finishing the house