I still can’t believe the credit counseling failure known as AmeriDebt is still an issue we have to deal with all these many years later.
In 2003 the Federal Trade Commission went after AmeriDebt for what was labeled as a fraud within the nonprofit credit counseling industry.
The FTC is still chasing the company to enforce the recovery of money. This time the effort has bled into the FTC actions against Ecological Fox.
To summarize the latest FTC action against some of the AmeriDebt players as a result of the Sanctuary Belize development you can read the complaint from the FTC against Ecological Fox.
The FTC said, “the scam was established by Andris Pukke, a recidivist scammer currently living in California, and he perpetuated it even while serving a prison sentence for obstruction of justice.” That situation that landed him in jail was as a result of the AmeriDebt case. In recent court filings, the FTC said, “The evidence against Pukke is too substantial to recount fully here, but his history scamming consumers is extensive.”
“In 2010, Pukke pleaded guilty to obstructing justice after he admitted obstructing the AmeriDebt receivership the order put in place and refusing to turn over the required assets. As a result, the court sentenced him to 18 months in prison. Between 2008 and 2014, the FTC returned nearly $7 million to consumers deceived through the AmeriDebt scheme. Pukke and Baker never relinquished control of the land parcel, however, and allegedly continued marketing it as part of the Sanctuary Belize scheme in the same way they had since 2005, even while Pukke was in jail,” said the FTC.
The development in Belize was placed under the control of a court-appointed Receiver. The latest information from the Receiver can be found here.
In a court filing on May 10th, the FTC laid out the complex issues in trying to stop the alleged scam, make victims whole, and deal with the mess created by the scheme, to begin with. The FTC also dumped more than 1,700 pages of additional information as well.
The FTC laid out the problems facing all
“The Sanctuary Belize Receivership presents unusually complex remedial questions courts rarely encounter. By far, the most urgent issue—and the Receivership’s primary purpose—is to maintain the status quo during this matter’s pendency. See, e.g., DE431 (Apr. 25, 2019) (explaining that preliminary injunctions exist to “preserv[e], as much as possible, the relative positions of the parties” until trial). In addition to the approximately $100,000 the Commission already made available, see DE355 (Mar. 26, 2019), the FTC’s Plan contributes the balance of its AmeriDebt contempt recovery—$4 million—to cover any unfunded expenses necessary to ensure the development’s safety and otherwise preserve assets. The FTC’s Plan also enhances the Receiver’s communication with consumers and reflects specific, immediate concerns lot purchasers expressed to the FTC through written communications and an in-person meeting. Notably, the Court-appointed Receiver supports the FTC Plan, which reflects the Receiver’s input and serves the interim Receivership’s purposes: preserving assets and preventing waste.
However, despite the urgent need to preserve assets and prevent waste, the purpose of the interim receivership is not to sell more lots, build missing canals and bridges, enforce contracts SBE procured through fraud, or divert assets to Pukke, Baker, or their associates. As discussed below, both Pukke and Baker ask the Court to trust them to fix the problems they caused. Allowing them to continue along the path that led to the current situation is untenable and obviously contrary to the Receivership’s purpose. Their plans also improperly resume development (rather than maintaining the status quo), enforce fraudulently obtained contracts, and micromanage development affairs that the Court-appointed Receiver should address.
Additionally, a group of nine homeowner couples propose a plan (“the Nine Homeowners Plan”), although the Court denied their motion to intervene, DE311 (Mar. 13, 2019). It is unclear who they represent. Significantly, multiple lot purchasers report that the proposed intervenors wrongly identified them as endorsing the proposed intervenors’ positions when, in reality, they do not. See PXB-D (declarations from lot purchasers the proposed intervenors incorrectly identified as supporting their position).1 It is also unclear what the proponents told other lot purchasers to obtain purported endorsements; suffice it to say, the Nine Homeowners Plan appears attractive if one assumes—incorrectly—that the only alternative is allowing the development to waste as the litigation continues. In any event, the Receivership cannot unfairly favor one set of consumers over another. However, the Nine Homeowners Plan does exactly that—it picks winners and losers among the lot purchasers before we even know who all the lot purchasers are,2 let alone how much is available to address competing claims.”
It is mind-boggling to read about the number of complex issues the Receiver is trying to deal with in order to give the most number of allegedly harmed consumers some sort of justice looking solution. I fear all parties will be left disappointed, angry, and harmed.
If you are interested in further information you can read this FTC filed statement on current affairs and proposal.
But both Andris Pukke and Peter Baker, from AmeriDebt days, have submitted proposals why they are the best people to take over the continued development of the Sanctuary Belize development. I don’t know, it sure feels a lot like that old expression of the fox guarding the hen house.
The FTC said, “Peter Baker proposed a plan, DE346 (Mar. 22, 2019), which makes both his role in this matter and the substantive evidence against him important here. Baker touts his long history with the development, but his dishonesty and contumacious behavior cloud that history. As the Court is aware, Pukke and Baker are childhood friends, and Baker owned Dolphin Development LLC, the original Sanctuary Belize developer. Following the AmeriDebt Receivership, Baker continued his ownership through “an arrangement, an agreement . . . via handshake” with Pukke, John Usher, and Stephen Choi.
Contempt proceedings ensued regarding Baker’s efforts to help Pukke hide assets, the Court found Baker (and Pukke) in contempt for their refusal to turn over receivership assets, including the development. Among other things, the Court also found “lies” related to assets “that were made not once, but multiple times by Mr. Baker under oath, under penalties of perjury[.]” Concerning their efforts to hide Pukke’s wealth, the Court noted that “[t]here’s a casualness about Mr. Baker’s statements and, indeed, about Mr. Pukke’s as if the truth doesn’t really matter.” The Court concluded that both Pukke and Baker acted with “real mendacity,” and that their credibility was “zero.” Despite the contempt finding, neither Pukke nor Baker would comply with turnover orders.
The Court subsequently reiterated that they had lied “dozens” of times, including “when [they] took the stand under oath.” The Court granted motions to incarcerate Pukke and Baker. It later denied Pukke and Baker’s motions to stay pending appeal, emphasizing that their stories about Pukke’s assets were “absurd” and “ludicrous.” As the Court put it, “[t]he mendacity of these two men throughout the history of this receivership is something to behold.”
The only bit of good news here is I learned two new words today. Contumacious – stubbornly disobedient. Mendacity – lie.