At Los Cabo’s East Cape, some luxurious structures have been constructed, including Costa Palmas, a luxury resort owned and managed by Los Angeles real estate firm Iron Gate. Within Costa Palmas, existing homes vary in value between $2.5 million and over $250,000 for waterfront homes.
Jason Grosfeld
Interviews with Jason Grosfeld, the founder and chief executive officer at Iron Gate, in 2021 confirmed that the pandemic caused a significant impact on $1 billion worth of real estate transactions in Costa Palmas. A lot of Costa Palmas locals, however, are quick to accuse Iron Gate of being a modern-day Bernie Madoff, using the millions of euros it gets for luxurious homes as part of an elaborate Ponzi scheme to extort or steal money from buyers of homes for Iron Gate’s profits.
Costa Palmas Brings A Claim:
Sources say that criminal and civil actions have been filed on behalf of Iron Gate and its Mexican subsidiaries in Mexico for racketeering, fraud and extortion, conspiracy, and other wrongful conduct or are being filed on behalf of Iron Gate and some of its representatives. Two Costa Palmas home buyers have been able to file suit with Iron Gate and some of its representatives in the United States, and sources claim that further legal proceedings are being drafted. Many law enforcement agencies from Mexico and the US and other authorities are conducting investigations.
In the public filings this year, which they filed to Iron Gate in the federal courts of California, two homebuyers in Costa Palmas, GS 1975 LLC, and TRG CP, LLC, claim that the company’s CEO and founder, Jason Grosfeld and its directors of development and marketing, David Waller and Michael Radovan as well as general counsel Mitch Laufer, among others of luring homebuyers by luring them into paying Iron gate and its affiliates hundreds of millions of dollars to construct.
The lawsuit claims that Iron Gate misled clients by declaring that homes would be built in 18 months, but it later used the homeowners or their funds for different purposes or to construct other dwellings. In both cases, the buyers assert that they have been charged by Iron Gate millions of dollars for homes that are being built but cannot be moved into for several years.
Jason Grosfeld’s Online Reputation – Statements Regarding The Court Cases That Hurt:
Additionally, it is stated in the lawsuits that Iron Gate and its agents threatened to declare default on contracts or halt all construction work when the monies due weren’t paid, thus extorting thousands of dollars out of plaintiffs. In both cases, purchasers claim that when they tried to defend themselves against the wrongdoing of Iron Gate, Iron Gate immediately retaliated against them by forcing other Iron Gate affiliates to terminate their memberships and subscriptions to their valuable Costa Palmas Beach & Yacht Club.
In response to Iron Gate’s request, the matter has been transferred for arbitration in Mexico according to state court documents of GS 1975 LLC. Iron Gate has reportedly been the center of arbitration hearings in Mexico, according to Steve Anderson, a representative for GS 1975 LLC. GS 1975 LLC is suing Iron Gate for more than $20 million in damages.
Jason Grosfeld’s Father:
We tried to contact TRG CP, LLC. However, they declined to respond. In the words of The Real Deal, Jason Grosfeld’s father, James Grosfeld, was an investor well-known in the company that managed assets, Black Rock, where he invested $94 million in stocks. James Grosfeld was the Pulte Group’s CEO and chairman from 1974 until the time he resigned from the board of directors due to a dispute within the company over its corporate governance. James Grosfeld held both positions for 16 years.
Based on the number of properties Iron Gate has sold in Costa Palmas and the more than $1 billion in sales that the company has racked up, this homeowner complaint could not be just the first step.
Final Judgments In The Case
This lawsuit claims that Iron Gate made numerous untrue claims regarding the cost and timeframe for completing the building process to secure the payments that totaled millions of dollars. The complaint claims that after the company has spent more than five million dollars of the plaintiff’s funds, the house is only a simple concrete shell.
The allegations are similar to those that were made in the lawsuit by GS 1975 LLC. Iron Gate is allegedly holding the house of the plaintiff hostage and won’t do anything until the plaintiff can pay millions more in costs in the suit. We tried contacting TRG CP, LLC personnel for clarification but have not received a reply.
Our sources suggest that there could be many additional Costa Palmas home buyers with similar experiences or claims, and they indicate that Iron Gate and its representatives could be facing further legal action. In addition, we’ve heard the same thing: the Mexican or American Federal officials are examining the matter.