FTC Fed Up With Andris Pukke, Peter Baker, and John Usher in Sanctuary Belize Case

The Federal Trade Commission (FTC) has just filed a motion to hold Andris Pukke, Peter Baker, and John Usher in contempt in the case involving Sanctuary Belize.

The court document submitted seems like it could have been shortened down to one sentence, “The named dudes can’t be trusted, lie, and defraud people.” The response would probably be even shorter, “No we didn’t” should cover it. But “I’m rubber, you’re glue” is still an award winner.

Here are some of the interesting passages:

“All three conspired to contumaciously remove the Sanctuary Parcel from this Court’s jurisdiction in violation of the Turnover Order, AmeriDebt DE 571, as part of an effort to, in Pukke’s own words, “get[] everything they stole from us back.” As a result, they should be ordered to return all rights to the Parcel to the Receiver on pain of incarceration. This will resolve ownership of the Sanctuary Parcel regardless of the outcome of the Ecological Fox complaint. Additionally, each conspired to defraud consumers, selling lots from the Sanctuary Parcel through misrepresentations, thus defying this Court’s Final Order in AmeriDebt. AmeriDebt DE 473.”

The FTC says, “They should be ordered to pay to the FTC all of the monies consumers paid for lots in Sanctuary Belize as a compensatory contempt sanction (more than $100 million).”

A total waste of time seems to be how the FTC views the strategy employed by Pukke in this case, “This is particularly true as to Pukke, who has refused to testify as to his own involvement and presumably would like to burden the Court, parties, and third-parties with discovery to “prove” what he is unwilling to say. Indeed, Pukke’s request is likely futile. Not only is the evidence of his liability overwhelming, he has already pled the 5th as to all matters at issue, thus entitling the FTC to adverse inferences on all matters relating to these contempt motions.”

This All Comes Back to AmeriDebt

Consumers pissed off at the FTC may not appreciate that a significant part of the reason for the FTC actions is because of the actions and involvement of AmeriDebt participants Pukke and Baker.

The FTC says, “The FTC has submitted significant evidence showing that Pukke and Baker used Usher to manipulate interactions with the AmeriDebt Receiver to maintain control over the Sanctuary Parcel, notwithstanding this Court’s 2007 Turnover Order. As detailed in the FTC’s moving papers and in the FOF,4 following the 2007 Turnover Order, Usher purported to act alone in challenging the Receiver’s authority, while undisputed documents and testimony show that Baker was working to structure and fund the payoff to the Receiver. FOF ¶¶ 176-80. Separately, undisputed documents show that immediately following the settlement with the Receiver, Pukke was once again marketing lots in Sanctuary Belize. PX 297 ¶ 98; PX 395; Baker Depo, 2/19/19, at 123:17 to 124:1 (Baker testifying that Pukke’s ownership and involvement was reinstated “[a]s soon as we were ready to go to, call it, start marketing and sales”); PX 894 (settlement with Receiver was approved on April 15, 2008); PX 895 (emails showing Pukke was performing marketing functions no later than June 25, 2008). Testimony from third-parties confirms that Pukke presented himself as a principal in the periods following the settlement, and even included one witness recounting Pukke bragging “that he not only owned the marketing operation, but that he raised the money to purchase Sanctuary Belize (the 14,000 acres in Belize he was selling).” PX 209 ¶ 9 (emphasis added). Furthermore, significant evidence shows that Pukke and Baker have continued to control SRWR, not least of which is an email exchange introduced into evidence by Pukke. These emails show Usher admitting to Pukke and Baker that they can control who sits on the SRWR board and, thus, control the Sanctuary Parcel and the Sanctuary Belize development. DX-AP-366 at 2. When questioned about this conduct, Pukke pled the 5th, thus entitling the FTC to adverse inferences. PI Hrg. Tr. 84:6-25, 3/22/19 pm.

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For his part, Baker testified, at length, during the preliminary injunction hearing that Pukke was his partner, including holding a 29% stake in the Sanctuary Belize development. See e.g., PI Hrg. Tr. 21:23 to 22:14, 3/13/19 pm (testifying to ownership); id. at 30:18 to 31:1 (identifying percentage of ownership). Baker further confirmed that Pukke paid nothing for this ownership stake. PI Hrg. Tr. 27:13-21, 3/13/19 PM. At best, Baker unconvincingly asserted that the decision to give Pukke an ownership stake happened shortly after the settlement with the Receiver and was not the result of an agreement amongst Pukke, Baker, and Usher to maintain the original ownership structure notwithstanding the Turnover Order. But, documents show: (1) Pukke was emailing regarding the development then known as “Sanctuary Bay” in 2007;5 (2) Pukke and Baker exchanging emails regarding marketing of foreign real estate developments in early 2008, just prior to the settlement with the Receiver;6 and (3) Pukke actively engaged in marketing for Sanctuary Bay within weeks of the 2008 settlement.7 In light of this evidence, the other undisputed evidence discussed above and otherwise before the Court, and Baker’s own credibility issues, there is no basis to credit Baker’s testimony that Pukke’s ownership was not continuous.

See also  At FTC’s Request, Court Finalizes Orders and Monetary Judgments against Ringleaders of the Sanctuary Belize Real Estate Investment Scheme

Pukke and Baker also erroneously state that the Receiver received a fair payment for the Sanctuary Parcel, and so the settlement should not be unwound. But, as the Receiver explained to the Court when seeking approval for the settlement, this was not a fair market sale. Instead, it was a settlement with a party that would contest the Receiver’s rights to ownership in court in Belize, with that contesting party represented by the law partner of the Prime Minister of Belize. AmeriDebt DE 682 at 4 (“However, it became clear to the Receiver that the Receiver would face significant resistance to the Receiver controlling the Sanctuary Bay Estates Project from SRWR even after Baker’s involvement in the project ceased.”). As the Receiver notes in the motion, they were compromising and, as a result, recovering less than Pukke had invested in the asset. Notably, enforcement in Belize would only have been necessary if Pukke and Baker were not involved in the transaction. Both Pukke and Baker were subject to this Court’s authority and could have been coercively incarcerated if known to have been manipulating the discussions to deprive the Receivership of value. AmeriDebt DE 614 (providing for the “immediate reincarceration of Baker” if he did not comply with the Turnover Order); AmeriDebt DE 625-1 (“Pukke is subject to re-incarceration if he fails to fully and strictly comply with his duties under the Contempt Order to fully purge his contempt by fulfilling Pukke’s turnover duty. . . .”).

Although not necessary for this Court’s ruling, documents uncovered since the FTC filed this case show that this was part of a plan of action by Pukke and Baker to thwart the AmeriDebt Receivership and otherwise reacquire all of the valuable assets. For example, in 2012 the AmeriDebt Receivership was winding down but still unloading assets such as Long Cay, an island off the coast of Belize. A cache of emails shows that although the Receiver believed it was dealing with an independent John Usher and a man named Gordon Barienbrock,8 Usher and Barienbrock were acting at Pukke and Baker’s behest in negotiating and obtaining the funds for the purchase of Long Cay. Kaufman Declaration Atts. 1-2, 9-15. After this Court approved the sale of the island to Usher and Barienbrock (AmeriDebt DE 821), Pukke gloated:”

It’s taken some time buddy but we’re getting everything they stole from us back!!

Overwhelming Evidence Says FTC

“The overwhelming evidence also establishes that both Pukke and Baker violated the Final Order by deceptively telemarketing Sanctuary Belize lots. Their oppositions do not present any issues precluding the Court from ruling immediately. First, both make specious legal arguments regarding the application of a TSR exemption even though that exemption is not included in the Final Order, and then baselessly assert that the sale of lots is not the sale of goods or services. Second, both assert the FTC has not established their ownership and control over the SBE, or that they did not participate in the conduct. But, Pukke offers no evidence in support of his assertions, while Baker’s own testimony confirmed both his and Pukke’s ownership, control, and participation. Third, they generally challenge that the deceptive claims at issue were not made, or claim they were not false. But, neither has challenged the FTC’s voluminous evidence showing the claims were both made and false, aside from Baker’s own self-serving testimony and some uncorroborated and conclusory declarations. This is not sufficient to rebut the FTC’s voluminous evidence. Furthermore, the Court has before it recordings of SBE staff making the precise claims at issue to FTC professionals posing as consumers. Fourth and finally, although both claim they did not have “knowledge,” the overwhelming evidence shows that they had the relevant knowledge.”

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Pukke Said to be Running Sanctuary Belize Development From Jail

“As to Pukke, the FTC has put forth voluminous evidence showing that he controlled every aspect of the SBE. The FTC included unchallenged declarations from former employees10 and third-parties who did business with the SBE11 confirming Pukke’s central role. Unchallenged documentary evidence further corroborates this testimony, showing Pukke in control of all operations, even during the time period when he was incarcerated by this Court for obstruction of justice. FOF ¶¶ 507-523. Defendant Costanzo also testified that he was a highlevel advisor to Pukke and that “[b]ased on my observations, everyone, whether in the United States or in Belize, ultimately reported to Andris Pukke.” PX 814 ¶ 18; see also FOF ¶¶ 528-549 (detailing additional evidence of Pukke’s control and participation). Furthermore, Pukke himself marked and offered into evidence an email from him to a SBE employee, with Pukke attaching a sales script along with the note: “Here it is with a few more tweaks.” DX-AP-324. The script explicitly made most of the misrepresentations at issue.12 Importantly, when questioned on his control and participation, Pukke pled the 5th, thus informing the Court that his truthful answers would tend to incriminate him.”

Pukke and Baker Are Claimed to Have Hidden Pukke’s Involvement

“Neither Pukke nor Baker even respond to extensive proof that they lied to consumers about Pukke’s involvement. Nonetheless, the evidence is extensive, and undisputed. FOF ¶¶ 461-527. As detailed in the FOF, Pukke hid his involvement, including using aliases such as Marc Romeo and Andy Storm. Furthermore, Baker knew Pukke was hiding his involvement. In fact, Baker helped Pukke hide by holding Pukke’s shares in the development in his name. See, e.g., PI Hrg. Tr. 27:13-18, 3/13/19 pm (Baker explaining he held Pukke’s shares). Although that evidence is sufficient, since the preliminary injunction hearing the FTC has uncovered emails in which Baker affirmatively misled the public as to Pukke’s involvement. In 2017, the Wall Street Journal published a negative article regarding Sanctuary Belize, including recounting allegations that Pukke had been hiding his ownership over the development. See PX 811. In response, Pukke, Baker, and other SBE principals coordinated a response to the article’s author. The emails show that Pukke had final approval and that Baker was to send the response to the article’s author. Even though Baker has testified before this Court that Pukke was in fact an owner of the development, and the documentary evidence confirms Pukke’s control, Baker agreed to send an email stating: “Mr. Pukke was a paid employee of the third party company that handles our sales and marketing, period! He is neither an owner, shareholder or director of any of the development companies, nor the marketing and sales companies involved with Sanctuary Belize.” Kaufman Declaration Atts. 4-5. There can be no dispute that SBE was hiding Pukke’s involvement, or that Pukke and Baker were party to this aspect of the fraud.”

If you are interested in reading the full document, click here.

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