UNITED STATES DISTRICT COURT 

DISTRICT OF MARYLAND 

SOUTHERN DIVISION 

In re SANCTUARY BELIZE LITIGATION 

(proposed) 

No: ____________1

FEDERAL TRADE COMMISSION 

Plaintiff, 

v. 

AMERIDEBT, INC. et al. 

Defendants. 

[UNDER SEAL] 

DO NOT DOCKET/ 

MOTION TO DELAY ECF PENDING

No: 03-cv-3317-PJM 

FEDERAL TRADE COMMISSION’S MEMORANDUM IN SUPPORT OF ITS MOTION 

TO HOLD ANDRIS PUKKE, PETER BAKER, AND JOHN USHER IN CONTEMPT 

FOR THEIR DECEPTIVE TELEMARKETING PRACTICES IN VIOLATION OF THE 

FINAL ORDER 

 

1

 Currently pending before the Court is a motion to consolidate this matter with the related 

FTC v. Ecological Fox LLC (“Ecological Fox”) matter, pursuant to Rule 42, under the joint case 

name In re Sanctuary Belize Litigation. 
i 

TABLE OF CONTENTS 

I. Introduction ......................................................................................................................... 1

II. The Legal Standard ............................................................................................................. 2

III. Pukke, Baker, and Usher Control the Sanctuary Parcel and the SBE. ................................ 3

A. Pukke and Baker Acquired the Sanctuary Parcel in 2003 and Then Hid It from the 

Receiver. ................................................................................................................. 3

B. Pukke, Baker, and Usher Created the Current Corporate Entities that Form the 

SBE, and Control the SBE to This Day. ................................................................. 6

IV. SBE Has Deceptively Telemarketed Sanctuary Belize Lots in Violation of the Final 

Order. .................................................................................................................................. 8

A. SBE Makes Seven Misrepresentations. .................................................................. 9

1. The Contemnors Falsely Claim that “No Debt” Means Sanctuary Belize 

Has Little to No Risk. ................................................................................. 9

2. SBE Diverts Funds to Pukke and His Family and Buys Various Personal 

Items for Pukke, Baker, and Other SBE Executives Rather Than Use 

Those Funds for Development. ................................................................. 11

3. The Development Was Not Finished Within Two to Five Years, and Will 

Not Be Finished Within the Next Five. .................................................... 12

4. The Amenities Were Not Finished Within Five Years, and They Will Not 

Be Completed Within the Next Five. ........................................................ 13

5. Contrary to SBE’s Claim, the Lots Do Not Rapidly Appreciate. ............. 15

6. There Is No Robust Resale Market. .......................................................... 15

7. Contrary to Their Repeated Assertions to Consumers, Sanctuary Belize Is 

Not Pukke Free. ........................................................................................ 16

B. SBE’s Misrepresentations Violate the Final Order. .............................................. 17

V. Baker and Usher Are Bound by the Final Order and Liable for SBE’s Violations. ......... 19

VI. Pukke, Baker, and Usher Should Be Ordered to Fully Compensate Consumers for Their 

Losses. ............................................................................................................................... 20

VII. Conclusion ........................................................................................................................ 22
ii 

TABLE OF AUTHORITIES 

Cases

AMREP Corp. v. FTC, 768 F.2d 1171 (10th Cir. 1985) ............................................................... 18 

Ashcraft v. Conoco, Inc., 218 F.3d 288 (4th Cir. 2000).................................................................. 3 

Brown v. Liberty Clubs, Inc., 543 N.E.2d 783 (Ohio 1989) ......................................................... 20 

Colonial Williamsburg Found. v. Kittinger Co., 38 F.3d 133 (4th Cir. 1994) ............................... 3 

Decker v. NW Environmental Defense Ctr., 133 S. Ct. 1326 (2013) ............................................ 19 

Fogelson v. Wallace, 405 P.3d 1012 (N.M. 2017) ....................................................................... 20 

FTC v. AmeriDebt, Inc., 373 F. Supp. 2d 558 (D. Md. 2005) ........................................................ 1 

FTC v. BlueHippo Funding, LLC, 762 F.3d 238 (2d Cir. 2014) ............................................ 21, 22 

FTC v. EDebitPay, LLC, 695 F.3d 938 (9th Cir. 2012) ................................................................ 22 

FTC v. Gill, 183 F. Supp. 2d 1171 (C.D. Cal. 2001) .................................................................... 21 

FTC v. Leshin, 618 F.3d 1221 (11th Cir. 2010) ............................................................................ 21 

FTC v. Neiswonger, 494 F. Supp. 2d 1067 (D. Mo. 2007), aff’d, 500 F.3d 769 (8th Cir. 2009) . 21 

In re Gen. Motors Corp., 61 F.3d 256 (4th Cir. 1995) ........................................................... 21, 22 

K.C. ex rel. Africa H. v. Shipman, 716 F.3d 107 (4th Cir. 2013) ................................................. 20 

Lorillard v. Pons, 434 U.S. 575 (1978) ........................................................................................ 18 

McComb v. Jacksonville Paper Co., 336 U.S. 187 (1949) ........................................................... 21 

McGregor v. Chierico, 206 F.3d 1378 (11th Cir. 2000) ............................................................... 22 

McKinney v. State, 693 N.E.2d 65 (Ind. 1998) ............................................................................. 20 

Polonetsky v. Better Homes Depot, Inc., 760 N.E.2d 1274 (N.Y. 2001) ...................................... 19 

Redner’s Markets, Inc. v. Joppatown G.P. Ltd. P’ship, 608 Fed. Appx. 130 (4th Cir. 2015) ...... 18 

Regal Knitwear Co. v. N.L.R.B., 324 U.S. 9, 14 (1945) ............................................................... 20 

Schwartz v. Rent-A-Wreck of America, 261 F. Supp. 3d 607 (D. Md. 2017) ..................... 2, 17, 18 

Southwest Sunsites, Inc. v. FTC, 785 F.2d 1431 (9th Cir. 1986) .................................................. 18 
iii 

State ex rel. Brady v. Wellington Homes, Inc., No. Civ. A. 99C-09-168, 2003 WL 22048231 

(Del. Super. Ct. Aug. 20, 2003) ................................................................................................ 20 

United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 (1947) .............................. 21 

United v. Ali, 874 F.3d 825 (4th Cir. 2017) .................................................................................... 3 

Wilson v. United States, 211 U.S. 361 (1911) ................................................................................ 3 

Statutes, Rules, and Regulations

16 C.F.R. § 310.3 .......................................................................................................................... 18 

16 C.F.R. Part 310..................................................................................................................... 2, 18 

60 Fed. Reg. 43842 ....................................................................................................................... 19 

68 Fed. Reg. 4580 ......................................................................................................................... 19 

Fed. R. Civ. P. 65 .......................................................................................................................... 20 

S.R. No. 103-80 ............................................................................................................................ 18 
1 

I. INTRODUCTION 

 Andris Pukke, Peter Baker, and John Usher have orchestrated a massive deceptive 

scheme in violation of this Court’s explicit order barring them from deceptive telemarketing. 

Each of them are bound by the Stipulated Final Judgment and Permanent Injunction as to 

Defendants Debtworks, Inc. and Andris Pukke (the “Final Order”), see DE473, and liable for 

violations of that order.2 They have used telemarketers to convince consumers to part with more 

than $100 million based on promises that Pukke and his cohorts would shortly complete an 

extravagant and luxurious real estate development on land in remote, southern Belize. Over the 

course of 12 years, they have not completed the development that they have variously called 

“Sanctuary Bay,” “Sanctuary Belize,” and “The Reserve” (the land is referred to as the 

“Sanctuary Parcel”). Furthermore, they never will complete the development as promised to 

consumers. Although Pukke is the mastermind, Baker continues to be his henchman and stooge, 

serving as the front man for the companies Pukke controls. Usher, for his part, provides support 

in Belize, and is a control person for other parts of the interrelated companies. For simplicity, 

the maze of interrelated companies will be referred to as the Sanctuary Belize Enterprise, or 

“SBE.” 

 The FTC initially sued Pukke in 2003 for operating a deceptive debt settlement scheme. 

The FTC alleged that Pukke’s company deceptively sold the debt settlement services to 

consumers as a free service by a nonprofit, but, nonetheless, took unauthorized, compulsory 

“contributions” from its clients. DE1 ¶¶ 10, 15, 17-19 (complaint allegations); FTC v. 

AmeriDebt, Inc., 373 F. Supp. 2d 558, 567 (D. Md. 2005) (granting preliminary injunction and 

finding likelihood of success based on Pukke’s assertion of his 5th Amendment rights and “the 

exhaustive evidence marshaled by the FTC”). Rather than face trial, Pukke settled, stipulating to 

 

2

 In this motion the FTC cites to the evidence attached to its temporary restraining order 

filing in the Ecological Fox matter. The citations follow the same format, referencing the exhibit 

as plaintiff’s exhibit [letter], followed by paragraph [number] and attachment [number]. For 

example: PX[X] ¶ [X]:[X]. 
2 

an order with a $172 million judgment and the creation of a receivership to marshal his assets, 

wherever they may be. DE473 (the “Final Order”). 

 The Final Order also bars Pukke “and those persons in active concert or participation 

with” him from telemarketing any good or service while “making or causing or assisting others 

to make, expressly or by implication, any false or misleading representation, including but not 

limited to . . . any aspect of the performance, efficacy, nature, or central characteristics of the 

goods or services.” DE473, Section II.A. The Final Order further bars the same group of people 

from “violating the Telemarketing Sales Rule, 16 C.F.R. Part 310.” DE473, Section II.D. In 

violation of these provisions, Pukke, Baker, and Usher have telemarketed lots in Sanctuary 

Belize while making at least six misrepresentations: (1) because Sanctuary Belize has “no debt” 

it is risk free; (2) every dollar they collect from lot sales goes back into the development; (3) they 

will finish the development quickly—within two to five years; (4) the finished development will 

boast remarkable amenities ranging from a hotel to an American-caliber hospital; (5) the 

impressive amenities mean the lots will rapidly appreciate; and (6) there is a robust resale market 

for consumers to resell their lots. They also assert, whenever asked, that Pukke is either not 

involved or, if pressed, has minimal involvement and no ownership stake in the SBE. Based on 

extensive evidence from former insiders, experts, and victimized consumers, Pukke, Baker, and 

Usher control the enterprise and each of these claims is false. 

 

II. THE LEGAL STANDARD 

 Clear and convincing evidence establishes each of the elements for civil contempt: “(1) 

The existence of a valid decree of which the alleged contemnor had actual or constructive 

knowledge; (2) that the decree was in the movant’s ‘favor’; (3) that the alleged contemnor by its 

conduct violated the terms of the decree, and had knowledge (at least constructive knowledge) of 

such violations; and (4) that the movant suffered harm as a result.” Schwartz v. Rent-A-Wreck of 

America, 261 F. Supp. 3d 607, 612 (D. Md. 2017) (J. Messitte) (citing Ashcraft v. Conoco, Inc., 

218 F.3d 288, 301 (4th Cir. 2000)); United v. Ali, 874 F.3d 825, 831 (4th Cir. 2017). Elements 1 

and 2 can be dealt with summarily. Pukke, Baker, and Usher had knowledge of the Final Order. 
3 

Pukke signed and stipulated to the Final Order. Baker has once already been held in contempt of 

the Final Order. DE571. Usher, for his part, signed documents submitted to this Court 

recounting his knowledge of the Final Order as part of a sham settlement in 2008 that permitted 

Pukke and Baker to both consolidate and hide their control over Sanctuary Belize. DE682-4 at 

2.3 The Final Order was issued in the FTC’s favor, enjoining Pukke and his cohorts from 

harming consumers and simultaneously creating a mechanism (i.e., contempt proceedings) for 

the FTC to stop such behavior and compensate victims. 

 Only the third and fourth contempt elements require elaboration. Here, Pukke, Baker, 

and Usher’s long history with the Sanctuary Parcel and creation of the entities comprising the 

SBE establishes their control over the SBE and that they are therefore bound by the Final Order 

and liable for the SBE’s conduct in violation of the Final Order. Wilson v. United States, 211 

U.S. 361, 376 (1911); Colonial Williamsburg Found. v. Kittinger Co., 38 F.3d 133, 136-37 (4th 

Cir. 1994). Under their control, the SBE has made the identified misrepresentations, causing 

more than a thousand consumers to purchase lots in Sanctuary Belize. Baker and Usher are 

liable despite not being parties because of their knowledge of the Final Order and their acts in 

concert or participation with Pukke and the companies he controls. Furthermore, consumers 

have been harmed, having lost over $100 million. These consumers deserve compensation. 

 

III. PUKKE, BAKER, AND USHER CONTROL THE SANCTUARY PARCEL AND 

THE SBE. 

 

A. Pukke and Baker Acquired the Sanctuary Parcel in 2003 and Then Hid It 

from the Receiver.

 The scheme traces back to 2003, when Pukke and Baker (with Baker’s stepparents) 

formed Dolphin Development LLC (“Dolphin”) and Sittee River Wildlife Reserve (“SRWR”).4 

 

3

 This transaction is discussed below and is also the subject of a separate contempt motion 

against Pukke, Baker, and Usher filed concurrently with this motion. 4

 PXQQ ¶ 67:71 (Dolphin articles of incorporation, identifying the owners, including 

Pukke, Baker, and Baker’s stepparents); PXQQ ¶ 68:72 (SRWR articles of incorporation); 

PXQQ ¶ 70:74 at 95:5-6 (showing that the others associated with the companies include the 

Medhursts, Baker’s mother and stepfather); PXQQ ¶ 93:98 at 16-17. 
4 

Pukke was the majority owner of Dolphin and Chairman of both Dolphin and SRWR.5 In this 

role, he loaned Dolphin and SRWR at least $3 million to purchase the massive, more than 12,000 

acre Sanctuary Parcel.6 Although Usher was not originally associated with either Dolphin or 

SRWR, his role evolved until he became a manager and Director in 2005.7 

 Notwithstanding the Court’s April 20, 2005, preliminary injunction transferring all of 

Pukke’s assets to the Receiver, DE122, Pukke and Baker continued their direction of Dolphin 

and SRWR,8 resulting in the initial marketing of the development then known as Sanctuary Bay, 

with the first lot sales beginning by at least July 2005.9 Pukke directed the Sanctuary Bay 

marketing and development, with Baker’s support. For example: Pukke helped develop the 

“Sanctuary Bay Estates” website, provided specific language to be used on the website, 

 

5

 PXQQ ¶ 67:71 (Puck Key Investment L-8, LLC (“Puck Key 8”) owns 60% interest in 

Dolphin); PXQQ ¶ 312:336 (Pukke’s 2005 bankruptcy schedule asserting Puck Key 8 100% 

owned by P & P II Family Trusts); PXQQ ¶ 93:98 at 16:10-11 (The Court on 3/14/07: “There’s 

no question that Andris Pukke was the 60% owner of Dolphin Development.”); PXQQ ¶ 78:83 

(9/21/03 Dolphin board minutes listing Pukke as “Chairman”); id. (6/21/03 SRWR board 

minutes listing Pukke as “Director” and noting his election as “chairman”). 6

 PXQQ ¶ 78:83 at 21 (lands purchased with loans from Pukke and Dolphin); id. at 25 

(10/7/05 SRWR minutes: lands were purchased with “unsecured loans made by Mr. Andris 

Pukke”); PXQQ ¶ 68:72 at 9 (Pukke testifying that he lent a total of “three point something 

million dollars that they were to pay me back as they sold the piece of that land”); PXQQ ¶ 78:83 

at 4 (Dolphin board minutes noting that Pukke had loaned Dolphin $3M); PXO ¶ 4:24 (SRWR 

history, stating that Pukke and Baker purchased Sanctuary Belize in 2002); PXQQ ¶ 65:69, 

attachment ¶ 11 (Deputy Receiver Brick Kane explaining the deeds of purchase); PXQQ ¶ 93:98 

at 17:2-11 (the Court describing how Pukke acquired the land). 7

 PXQQ ¶ 312:336 at 6 (in 2003, manager of Triton Mariculture Ltd. (“Triton”), a shrimp 

farming company owned by Dolphin); PXQQ ¶ 78:83 at 3 (9/21/03 Dolphin board minutes 

discussing purchase of Triton); PXQQ ¶ 70:74 at 10 (2005 Pukke Deposition identifying Triton, 

stating he owned Triton and that “Johnnie” Usher was its manager); PXQQ ¶ 78:83 at 8 (5/13/05 

Dolphin board minutes, manager); id. at 24 (10/7/05 SRWR board minutes, director); PXO ¶ 

4:24 at 11. 

8

 PXQQ ¶ 78:83 at 8 (May 2005 Dolphin meeting minutes showing Pukke as Chairman, 

Baker as Director); id. at 13 (July 2005 Dolphin meeting minutes showing Pukke and Baker as 

Directors); id. at 24 (October 2005 SRWR board minutes showing Pukke attending the board 

meeting and Baker a Director). 

9

 PXQQ ¶ 71:75 (2005 email attaching Sanctuary Bay telemarketing script, claiming the 

development would have a hotel, marina, health spa, equestrian center, and investment return 

rates around 500%); PXQQ ¶ 302:325 (September 2005 emails by and among Pukke, Baker, and 

Baker’s stepfather regarding Sanctuary Bay marketing); PXQQ ¶ 313:337 (August 2005 

Sanctuary Bay website listing Dolphin as the developer); PXQQ ¶ 72:76 (August 2005 lot sale 

designating the “vendor” as “Dolphin Development Co., Ltd.; dba Sanctuary Bay”); PXQQ ¶ 

325:348 (July 2005 Baker email attaching list of lots indicating many had already been sold). 
5 

transferred an additional $100,000 from a Latvian account to fund the development, and directed 

land development, usually copying Baker on all related correspondence.10 To hide the asset, 

notwithstanding the preliminary injunction, Pukke and Baker engaged in a sham transaction 

transferring Dolphin’s rights to companies purportedly controlled by Baker. 

 When informed of this first sham transaction, the Court held Pukke and Baker held in 

contempt for failing to turn over the property and ordered them to turn it over to the Receiver. 

DE571 (Mar. 30, 2007). 11 Undeterred, Pukke and Baker still refused to turn over the asset,12

forcing the Court to incarcerate them. DE604 (May 4, 2007).13 Following incarceration, the 

FTC and the Receiver believed that Belizeans, including Usher, had in fact claimed control over 

the enterprise. Pukke and Baker were, therefore, released, and the Receiver negotiated a 

settlement with Usher, who was at this point SRWR’s Chairman.14 DE682 (motion to approve); 

DE682-4 (settlement agreement). No party objected to the proposed sale, and the Court 

approved it without comment. DE686. But, this settlement was a fraud. As disclosed in 2016 

during the SRWR board meeting, with Baker once again SRWR’s Chairman,15 Pukke and Baker 

 

10 See PXQQ ¶ 74:79 (April 2005 email correspondence in which Pukke, writing from both 

his email address and Baker’s email address, describes creation of Sanctuary Bay website, 

marketing, including lead generation, and the transfer of $100,000 from a Latvian bank account); 

PXQQ ¶ 75:80 (May 2005 email seeking Pukke’s comments on lot development); PXQQ ¶ 

77:82 (July 2005 emails among Pukke and Baker with Pukke approving and directing payments 

for development). 

11 During its oral ruling, the Court described Pukke’s and Baker’s testimony, stating: “There’s a casualness about Mr. Baker’s statements and, indeed, about Mr. Pukke’s as if the 

truth doesn’t really matter.” PXQQ ¶ 93:98 at 25:20-24 (emphasis added). 12 PXQQ ¶ 320:344, attachment ¶¶ 3-4, 7 (detailing Baker’s lack of cooperation); PXQQ ¶ 

88:93, attachment ¶ 5 and Exhibits 3 & 4 (Exhibit 4 specifies that SRWR is terminating all “past 

and future” involvement with Dolphin, Starfish, and Peter Baker) (emphasis added). 13 In these proceedings, the Court commented: “The mendacity of these two men 

throughout the history of this receivership is something to behold.” PXQQ ¶ 95:100 at 27:7-8. 14 The settlement was for a discounted valuation, because the Receiver was unsure how 

effectively he could enforce his rights in Belizean courts against Usher. DE682 at 4. 15 This, despite the 2007 SRWR letter claiming it was terminating any future relationship 

with Baker. Also, a “Mark Romeo” was a Director in 2016. As this Court may recall, Pukke has 

at times used the name Mark (or Marc) Romeo, and testified to this Court in 2015 as part of his 

supervised release hearing that the real Romeo ceased all connections with the Sanctuary Parcel 

and its various related corporate entities in 2011. PXQQ ¶ 148:141 at 285:5-14. The FTC’s 

Memorandum supporting its contemporaneously-filed ex parte Motion for a Temporary 

Restraining Order in the related Ecological Fox matter provides additional evidence that Pukke 

used the “Marc Romeo” alias. 
6 

arranged the settlement to transfer Pukke’s shares to Baker, notwithstanding that both were 

obligated to turn over whatever rights they had to the Receiver. PXO ¶ 3:24 at 12. This illicit 

sale was corroborated during the FTC’s undercover investigation, with Frank Costanzo, an 

officer of the current corporate entities associated with the Sanctuary Parcel, telling an FTC 

employee that Baker bought the Sanctuary Parcel for himself and the “original investors.” 

PXQQ ¶ 48:41 at 15:23-16:10 (emphasis added). Within months of the settlement, they had 

resumed selling lots and giving tours based on the same representations Pukke and Baker were 

making in 2005, with Usher as the onsite salesman. PXQ ¶¶ 2-6; PXR ¶¶ 2-5. 

B. Pukke, Baker, and Usher Created the Current Corporate Entities that Form 

the SBE, and Control the SBE to This Day. 

 After Baker obtained Pukke’s legal interest in the Sanctuary Parcel, they created a new 

entity, Eco Futures Belize Ltd. (“Eco Futures (BZ)”) that took over Dolphin’s role as developer, 

PXO ¶ 3:24 at 12, Global Property Alliance Inc. (“GPA”), and various other largely 

indistinguishable entities to further the lot sale scam. PXO ¶ 2:23 at 8 and ¶ 3:24 at 13; see also

PXQQ ¶ 148:141 at 197:6-12 (testimony from GPA employee that GPA “is doing business as 

Eco Futures”); id. at 202:10-22 (further testimony that other marketing entities, such as “Buy 

Belize,” operate from GPA’s offices at GPA’s direction). These various entities share offices, 

managers, employees, and funds.16 

 Ample evidence confirms Pukke’s primary control over the SBE. Although Pukke has 

avoided being a “paper owner,” multiple former SBE employees confirm that Pukke is and has 

been the ultimate control person for the entire enterprise. PXEE ¶ 5 (“Pukke was the person who 

ran everything.”); PXZ ¶¶ 3 & 6 (“Pukke ran everything,” including “Buy Belize, Eco Futures, 

and Global Property Alliance”); PXBB ¶ 3 (“While I was working there, I saw no distinction 

between Sanctuary Belize, Buy Belize, Global Property Alliance, Sittee River Wildlife Reserve 

 

16 PXQQ ¶¶ 215-17 (share location and management); PXNN ¶ 13 (commingle funds); see 

also PXBB ¶ 3 (“While I was working there, I saw no distinction between Sanctuary Belize, Buy 

Belize, Global Property Alliance, Sittee River Wildlife Reserve and Eco Futures 

Development.”); PXZ ¶ 6 (“I wasn’t sure what company I worked for.”). 
7 

and Eco Futures Development. Everyone who worked for those entities took orders from and 

reported to Pukke.”). Third-party business partners identify Pukke the same way.17 Internal 

SBE documents confirm Pukke’s authority over communications with lot owners about 

corporate structure,18 legal affairs,19 lot ownership structure,20 refunds to consumers,21

dissolution of SBE-related entities,22 payments for equipment shipped to Belize,23 lot sale 

contracts,24 commissions for telemarketers,25 and negotiations with consumers who want to sell 

their lots.26 Tellingly, Pukke ran the SBE during his stint in prison for obstruction of justice in 

this case. See PXQQ ¶ 152 (an email showing Pukke’s continued control during his period of 

incarceration); PXQQ ¶ 105:115 (SBE paying for Pukke’s Wall Street Journal subscription while 

he was incarcerated); PXQQ ¶197:207 (SBE employees arranging for email correspondence with 

Pukke while he was incarcerated). 

 Baker continues to serve as Pukke’s front man. As shown above, Baker was an SRWR 

founder and was the SRWR Chairman as of 2016. Additionally, Baker is the purported owner or 

officer of several SBE members. PXQQ ¶¶ 187, 217, 219, 231, 233, 236; PXO ¶ 3:24 at 13 

(GPA). He even had access to SBE bank accounts, using them for personal purchases. PXQQ ¶ 

303. Also as discussed above, another SBE member told the FTC in an undercover call that 

Baker “owns [the] development.” 

 

17 PXFF ¶¶ 8-9 (real estate developer met with Pukke, stating: “Pukke characterized himself 

as the ‘CEO’ and ‘owner’ of Sanctuary Belize. Pukke made a point to emphasize that he not 

only owned the marketing operation, but that he raised the money to purchase Sanctuary Belize. . 

. . Pukke was clear that he was the owner of the property.”); PXGG ¶¶ 31-33 (executive of 

international marina management company stating that it was apparent Pukke was a control 

person and that Pukke confided in him that he in fact had an equity interest in Sanctuary Belize). 18 PXQQ ¶ 150:142 (employees relying on Pukke’s advice). 19 Pukke directing $20,000 wire to Belizean attorney. PXQQ ¶ 151:143. 20 Pukke directing employees regarding “fractional ownership” of lots. PXQQ ¶ 152:145. 21 Pukke directing a $10,000 check to a dissatisfied lot owner. PXQQ ¶ 153:147. 22 Pukke dissolving the development’s former HOA. PXQQ ¶ 154:149. 23 Email showing Pukke’s authority to wire a payment. PXQQ ¶ 155. 24 Regarding a lot sale contract, Pukke getting a copy for his “review.” PXQQ ¶ 156:155. 25 PXQQ ¶ 157:156 (email train in which Pukke is decision maker on commissions). 26 Pukke directing subordinate regarding “all emails or requests” about owners who want to 

sell, including requests sent to apparent SBE executives. PXQQ ¶ 158:159. 
8 

 Similarly, Usher is still present, serving key roles for members of the SBE. Usher is a 

director of the Sanctuary Belize Property Owner’s Association (“SBPOA”), PXQQ ¶ 201: 213. 

He is a bank signatory on Eco Futures (BZ)’s U.S. bank account. PXQQ ¶ 204. Furthermore, 

numerous marketing communications directed to U.S. residents identify Usher as the 

“chairman,” “owner,” or “principal” of the development. PXQQ ¶ 205. 

IV. SBE HAS DECEPTIVELY TELEMARKETED SANCTUARY BELIZE LOTS IN 

VIOLATION OF THE FINAL ORDER. 

 With Pukke, Baker, and Usher in charge, SBE has made more than 1,000 sales so far, 

PXPP ¶¶ 75-76, taking more than $100 million from consumers, PXB ¶ 36:18, by selling lots in 

Sanctuary Belize through “false or misleading representation[s]” in violation of the Final Order. 

DE473, Section II. The sales process has followed the same pattern for years. Consumers hear 

or see commercials advertising real estate investment opportunities in Belize, which results in 

consumers calling the phone number in those advertisements or driving those consumers to the 

contemnors’ websites.27 At the websites, consumers are induced to leave their personal 

information, including a phone number. PXQQ ¶ 103. A sales person then calls the consumer 

and makes the core misrepresentations to induce the consumer to schedule a trip to Sanctuary 

Belize.28 Usually this call, or a subsequent one, includes a “webinar,” which is a phone call with 

accompanying slides that the consumer can view. PXQQ ¶ 108; PXW ¶¶ 8, 17; PXI ¶ 8; PXBB 

¶ 14.29 The webinars persuade consumers to tour the development in Belize. SBE offers an all-

 

27 PXQQ ¶ 102; PXI ¶ 1 (consumer saw ad and called number); PXE ¶ 3 (same); PXK ¶¶ 2-

3 (consumer saw ad and went to website); PXW ¶¶ 1-4 (found website and entered information); 

PXD ¶ 2 (same); PXN ¶¶ 2-4 (same); PXR ¶ 3 (same); PXS ¶¶ 3-5. 

28 PXQQ ¶ 324; PXGG ¶ 19 (“Kazazi told me that they had a call center in California where 

Sanctuary Belize used high-pressure sales tactics to convince consumers to visit the 

development.”); PXBB ¶ 16 (“Salespeople would tell customers whatever they wanted to hear to 

get them to visit Sanctuary Belize.”); PXZ ¶ 7(“People at the [SBE] office frequently talked 

about how Sanctuary Belize was a scam.”). 

29 The webinars at times include prominent members of the SBE, including one in which 

Luke Chadwick, a defendant in the related FTC v. Ecological Fox, states: “We are not a fine 

print organization. We don’t say a bunch of things and then, after we disappoint you, say, 

‘Hey, read the fine print.’ We don’t do that. You know, we say this is going to be what you 

expect it to be and if it’s not, hey we’ll give you your money back.” PXI ¶ 9:3 (webinar 

recording) at 1:34:25-1:34:41 (emphasis added). 
9 

inclusive package (usually $999 per couple) that covers lodging at a resort near Sanctuary 

Belize, transportation within Belize, and meals. See, e.g., PXQQ ¶ 24 (undercover purchase). 

The webinars also persuade consumers to sign a “non-binding lot reservation agreement.” 

PXQQ ¶ 111; PXBB ¶ 14. Consumers pay $2,000 to $10,000 to obtain a right of first refusal on 

a particular lot. PXQQ ¶ 111; PXD ¶ 8:3 (attaching lot reservation agreement); PXBB ¶ 18:17 

(same); PXI ¶ 21; PXU ¶ 8. At Sanctuary Belize, consumers hear the core misrepresentations 

again (PXQQ ¶ 117) and are pressured to buy the lots while on an island 40 minutes away from 

the mainland (PXQQ ¶ 127) either in cash or with in-house financing only (PXE ¶ 28; PXF ¶ 28; 

PXQQ ¶ 133; PXQQ ¶ 134), thus avoiding third-party involvement.30 

A. SBE Makes Seven Misrepresentations. 

 The false claims SBE makes during this process include: (1) the Sanctuary Belize 

development is risk free; (2) every dollar consumers pay goes into the development; (3) the 

development will be complete within a short period of time; (4) the promised amenities (which 

include a hotel, restaurants, shops, hospital, and airport) will be completed within a short period 

of time; (5) the lots will rapidly appreciate; and (6) there is a robust resale market for the lots. 

They also make the frequent claim that Pukke, the mastermind and control person for the whole 

SBE scheme, has little or no involvement. Each claim is false and violates the Final Order. 

1. The Contemnors Falsely Claim that “No Debt” Means Sanctuary Belize 

Has Little to No Risk. 

SBE claims to use a “no debt” business model, making Sanctuary Belize a less risky 

investment than one in which a developer must make payments to creditors. See PXPP ¶¶ 10-18 

(identifying over thirty instances in which SBE made this claim to consumers, citing consumer 

declarations, telemarketer declarations, SBE scripts, webinars, emails, and other marketing 

communications). Prominent examples include an SBE telemarketer telling the FTC during its 

undercover investigation that because Sanctuary Belize is “debt free,” “[t]here’s no possible way 

 

30 While at Sanctuary Belize, many consumers indicate they met and interacted with Usher, 

PXQQ ¶ 118, who takes part in the sales process. See, e.g., PXR ¶¶ 7-9. 
10 

for it to go bankrupt,” PXQQ ¶ 24:13 at 25:23-26:1, and “there’s absolutely no way for you to 

lose your money.” PXQQ ¶ 45:38 at 28:9-29:8; see also PXBB ¶ 16 (SBE telemarketer: 

“Because Sanctuary Belize didn’t owe anyone any money, it was a low-risk investment.”); PXZ 

¶ 15 (SBE telemarketer: “We explained that the ‘debt-free’ development model meant much 

lower risk because owners did not have to worry about Sanctuary Belize defaulting on loans.”). 

As expected, consumers often identify the “no debt” model as a reason they bought a Sanctuary 

Belize lot, thus relying on the claim. PXPP ¶ 11 (collecting evidence); PXI ¶ 5 (“The fact that 

the no debt model made Sanctuary Belize less risky was important to our ultimate decision to 

purchase a lot there.”); PXS ¶ 5 (“The ‘no debt’ model was impressive and important to me.”); 

PXU ¶ 6 (“Knowing that the development was not risky and was on a firm financial footing was 

very important to us.”). 

In fact, the opposite is true—the absence of conventional financing means substantially 

greater risk. According to Richard Peiser, a Professor at Harvard University and leading 

authority on large-scale real estate development, attempting a large-scale real estate development 

without a reasonable level of debt is “high-risk,” PXA ¶ 12, because it is normally “hard or 

impossible” to have sufficient front-end and sustained cash flow to fund infrastructure, 

construction, and operation of large-scale amenities (such as those contemplated in the Sanctuary 

Belize development) until the amenities have attained a positive cash flow, without outside 

financing. PXA ¶ 20; see also PXA at 1 (“The ‘no debt’ model risks that funds will not be 

available for project development to unfold along a time path that will sustain project marketing 

and ultimately project survival.”).31 Furthermore, the “no debt” model poses a greater risk for 

consumers because the lender in traditionally financed real estate developments provides 

underwriting, due diligence, and monitoring functions to reduce consumers’ risk, PXA ¶ 28, 

ensuring the borrower has significant net worth, is reliable (such as not being run by a two-time 

 

31 Indeed, an executive at the global marina management company the contemnors wanted 

to manage their marina told them “on several occasions that having access to capital markets 

would allow Sanctuary Belize to complete the upland development quicker.” PXGG ¶ 18. 
11 

felon), and has real estate development experience. PXA ¶ 31. The lender’s due diligence 

would also “include extensive assessment of the feasibility of the project,” PXA ¶ 31, which is 

important here given what Professor Peiser describes as the “mismatch” in amenities being 

touted with the market feasibility for them in remote, southern Belize. PXA ¶¶ 44-48. 

2. SBE Diverts Funds to Pukke and His Family and Buys Various 

Personal Items for Pukke, Baker, and Other SBE Executives Rather 

Than Use Those Funds for Development. 

SBE also makes a closely-related claim: Because of the “no debt” model, every dollar 

the developer collects from lot sales goes back into the development. See PXPP ¶¶ 20-24 

(compiling evidence from twenty sources showing that SBE made this claim, citing consumer 

declarations, telemarketer declarations, SBE scripts, webinars, emails, and other SBE marketing 

communications). Consumers relied on this important claim. PXPP ¶ 21 (collecting evidence); 

PXG ¶ 15 (“The fact that this was a safe investment and that all of the money from sales would 

go to construction (rather than to pay off debt) was important to my decision to purchase.”). 

However, the claim is false. 

The banking records are replete with personal expenses unrelated to the development, 

including numerous transfers for Pukke’s personal benefit. For instance, despite the Court’s 

order prohibiting Pukke from repaying his childhood friend John Vipulis for the “loan” he made 

to end Pukke’s coercive incarceration, DE622, SBE has transferred more than $3 million to 

Vipulis. PXNN ¶ 8.R.32 Similarly, SBE has transferred more than $1 million to his wife/fiancée, 

a business his wife/fiancée ostensibly owns, and his deceased father’s estate, through which 

money is further transferred to other relatives. PXNN ¶¶ 8.c-8.f, 8.v-8.w. Additionally, SBE 

paid significant amounts to remodel Pukke’s personal residence, which is on sale for $18.5 

million. PXNN ¶ 8(ee); PXPP ¶ 74; PXEE ¶ 8. 

 SBE also pays numerous other expenses that have nothing to do with completing the 

Sanctuary Belize development. These include high-priced tickets to sporting events and music 

 

32 These payments are the subject of a separate motion to hold Pukke and Vipulis in 

contempt of this Court’s order prohibiting these transfers before paying the FTC. 
12 

concerts, PXNN ¶ 9, expensive beauty products for Baker and/or his wife, PXNN ¶ 10, PXC ¶ 

25, an strap apparently for Baker, PXPP ¶ 100, PXNN ¶ 10, and thousands for 

cosmetic dentistry. PXNN ¶ 8(i); PXPP ¶ 102. Moreover, Pukke, Baker, and others have 

Sanctuary Belize debit cards they use for groceries, gas, restaurants, personal travel, and cash 

withdrawals. PXEE ¶ 8 (former SBE bookkeeper, stating “although millions of dollars flowed 

through Sanctuary Belize accounts . . . relatively little went to construction expenses in Belize”). 

3. The Development Was Not Finished Within Two to Five Years, and 

Will Not Be Finished Within the Next Five. 

Since at least 2005, the contemnors have advertised largely the same set of amenities and 

claimed they will be complete within two to five years. See PXPP ¶¶ 26-29 (identifying twenty 

instances in which SBE made this claim, citing consumer declarations, telemarketer declarations, 

SBE scripts, webinars, emails, and other SBE marketing communications); PXQQ ¶ 314:338 at 

32 (June 2006 timeline claiming all amenities would be complete by November 2008); PXQQ ¶ 

29:18 at 43:9-11 (in 2017 call with FTC employee posing as consumer, stating: “[I]n the next 

year or two, it’s going to be all done.”). The timeline claim is important to consumers and they 

rely on it when making their decisions to purchase. See PXPP ¶ 27. But the claim is false. 

Indeed, it is unquestionably false for a large number of consumers who heard this claim 

more than five years ago. By mid-2013 (more than five years ago), SBE had made hundreds of 

sales. PXPP ¶ 75. However, the development is nowhere near finished, with few homes, 

PXMM ¶¶ 8-11, PXPP ¶ 78, and most promised amenities unstarted or incomplete.33 

Furthermore, SBE will not complete the development over the next five years. Professor 

Peiser opines that the total cost to complete the massive planned community as promised 

(including the promised hospital, hotel, and commercial core) is $613 million. PXA ¶ 327. 

Professor Peiser even created an estimate for a “below promised” development, which still 

would require an additional $248 million. Id. Although SBE claims it “absolutely” has the 

 

33 The incomplete nature of the work is detailed in the section below related to the promised 

amenities. 
13 

resources to finish the development, PXQQ ¶ 24:13 at 26:18-27:3, it plainly does not. Erik Lioy, 

the head of forensic accounting at Grant Thornton LLP, has reviewed SBE’s bank records and 

internal accounting information (including Quickbooks files), and opines that SBE will have no 

more than $116 million to contribute to development over the next five years—far short of the 

amounts Professor Peiser indicates are necessary to complete even the “below promised” version 

of the development. PXB ¶ 41.34   

4. The Amenities Were Not Finished Within Five Years, and They Will 

Not Be Completed Within the Next Five. 

SBE claims that the completed development will boast remarkable amenities comparable 

to a small American city. These amenities are crucial because they make living in remote, 

southern Belize more palatable to sophisticated American consumers looking for retirement or 

second homes, and the amenities will purportedly cause the lots’ value to skyrocket. PXK ¶ 21; 

PXZ ¶ 12; PXQQ ¶ 23:10 at 59:12-60:7. One telemarketer explained the breadth of these 

promised amenities: 

We explained [to prospective purchasers] that the property would include worldclass dining with restaurants, bars, bistros, cafes, bakeries, a fresh fish market, a 

farmer’s market, a citrus farm, and bars. It would also include an American-size 

grocery store. . . . a post office, medical clinic, art galleries, an on-site rental 

office to rent their unoccupied properties, an international school for children, an 

outdoor activity center, a spa and fitness center . . . a church . . . a boat dealership, 

a water taxi service . . . a fuel station at the world-class marina35. . . . [and] an 

international airport and hospital36 that would be completed within two years near 

Sanctuary Belize. 

 

34 Grant Thornton used assumptions that strongly favor the SBE, including assuming that 

$25 million SBE has transferred overseas since 2011 is undissipated and available to complete 

the development, PXB at 1, and that SBE can replicate its two best sales years (2013 and 2014) 

for each of the next five years. Id. 

35 The marina is one of the most prominent claims. The contemnors claim Sanctuary Belize 

will have a 250 slip state-of-the-art marina, purported to be rated as one of, if not the, best 

marinas in the Western Caribbean. PXQQ ¶ 23:10 at 13:5-6 ; PXPP ¶ 88; PXS ¶ 14. Given the 

contemnors’ conduct, it is unsurprising that the marina currently has only 81 slips and is nowhere 

near world class. PXGG ¶ 40 (81 slips, with many not operational); PXHH ¶ 39 (“It was not a 

‘world class’ marina. Rather, it was an expeditionary, outpost destination.”). 36 SBE describes the hospital as 30,000 square feet (or more), PXPP ¶¶ 31-34, 84, and 

“state of the art,” PXQQ ¶ 20:6 at 58:13-59:5, with vast capabilities including everything from 

“oncology” to “organ transplantation,” PXPP ¶ 31. Reflecting the development’s size, SBE also 

claims the downtown “Marina Village” area will have a smaller emergency medical facility. 

PXPP ¶¶ 31-34 (collecting evidence of claims of both the hospital and medical clinic). 
14 

PXBB ¶ 17; see also PXZ ¶ 10 (“We told prospective buyers that the Marina Village would have 

high-end shopping and dining, a hotel, a spa and fitness center, an American-sized grocery store, 

and a world-class marina with at least 200 slips that Island Global Yachting (“IGY”) would 

operate.”); PXPP ¶¶ 30-54 (collecting evidence showing consumers heard these claims). As 

expected, the promised amenities are important to consumers and they rely on these claims when 

making a decision to purchase.37 

But, these claims are false. After thirteen years, most of the promised amenities do not 

exist. PXPP ¶ 79 (collecting information from consumers who visited regarding the status of 

advertised amenities). The hospital, hotel,38 airports, entertainment, and “Marina Village” (the 

commercial core) are unfinished and, in most cases, unstarted. SBE has completed only a pool, a 

bodega, a two-pump gas station, an open-air bar, restaurant, and a marina less than a third of the 

size of what it promised. PXPP ¶ 82. As noted above, the cost of the promised amenities far 

exceeds SBE’s potential income over the next five years. Nor is there any chance the amenities 

will somehow appear on their own. Professor Peiser explains that the development’s small 

population, rural location, competition within the development (for instance, two competing 

coffee shops), and competition from other resort communities makes most of the promised 

amenities economically unviable. PXA ¶44-64. As Professor Peiser opines, “[t]here is 

essentially a zero probability that this development ever would provide a large enough and/or 

wealthy enough base of customers to support several of the most essential amenities that have 

been promoted as part of marketing lots at Sanctuary Belize.” PXA ¶ 68 (emphasis added). 

 

37 See, e.g., PXI ¶ 9 (explaining that the fact that Sanctuary Belize would finish the 

promised amenities “by 2014 or sooner” was important to his decision to purchase); PXE ¶ 14 

(“[H]aving specific, short-term timelines for the amenities at Sanctuary Belize was important to 

our decision to purchase there.”); PXN ¶ 1 (“[W]e purchased based on claims . . . that the 

promised amenities would be completed in short order”); id. ¶ 48 (noting that “our property 

would have no value” without the promised amenities). 

38 An SBE executive told a marina company (IGY) executive that he “wasn’t sure how 

Sanctuary Belize could build or fund the proposed hotel [.]” PXGG ¶ 18. 
15 

5. Contrary to SBE’s Claim, the Lots Do Not Rapidly Appreciate. 

SBE further claims that the impressive amenities detailed above mean the lots will 

appreciate from 200% to 300% (and sometimes 400% or 500%) within two to three years. See 

PXPP ¶¶ 56-60 (identifying fourteen instances in which SBE made this claim). For instance, an 

SBE telemarketer told FTC employees posing as purchasers that, due to the airport, marina, and 

other amenities, they could expect “around a 300 to 500 percent increase in three years.” PXQQ 

¶ 23:10 at 59:12-18. Another SBE telemarketer told FTC undercover employees their lot would 

“double[] or triple[] and they’re [projecting] 250 to 300 percent in the next few years.” PXQQ ¶ 

20:6 at 54:21-55:1. As recently as June 2018, SBE posted marketing material claiming 400% 

returns. PXC ¶¶ 67-68:152 at 1. This is an important claim to consumers that they rely on when 

making a decision to purchase. PXPP ¶ 57 (collecting evidence of reliance); PXE ¶ 22; PXP ¶ 

22; PXI ¶ 20. 

In reality, there is no appreciation. Indeed, unhappy consumers are usually forced to hold 

onto their lots indefinitely or sell them back to the contemnors at a loss, PXQQ ¶ 178 (noting that 

most do not even obtain full refunds), which would not occur if their lots had appreciated. See 

also PXMM ¶¶13-16, 27-32 (collecting evidence showing consumers seeing no appreciation 

after six years); PXQ ¶ 61 (consumer seeing no real appreciation after ten years). 

6. There Is No Robust Resale Market. 

SBE also claims consumers will realize the rapid appreciation without difficulty because 

there is already a robust resale market.39 For example, when FTC employees posing as 

prospective buyers asked “let’s say something comes up and we need an emergency flow of cash 

. . . what’s the . . . market like for reselling” lots, the SBE telemarketer assured them that lots 

were “selling like hot cakes,” and “you’re not going to have a problem whatsoever” reselling the 

lot. PXQQ ¶ 24:13 at 17:17-18:2; PXQQ ¶ 20:6 at 14:14-16 (explaining that a current owner is 

 

39 See PXPP ¶¶ 62-67 (summarizing evidence that SBE made this claim, citing consumer 

declarations, telemarketer declarations, and many instances in which the claim appears in SBE 

scripts, webinars, emails, or other marketing communications). 
16 

“all set” because his lot is “going to be worth so much money, what he could do is turn around 

and just sell it”). The resale market claim is important to consumers and influences their 

decision to purchase. PXPP ¶ 63. 

 But, of course, there is no resale market. If there were, consumers would not pursue the 

unfavorable buy-back agreements just discussed. Consumers report being entirely unable to 

resell lots, PXI ¶¶ 63-71, or able to do so only after years of effort (and without any meaningful 

profit), PXQ ¶ 57-61. Furthermore, SBE actively interferes with resale efforts (likely because 

such efforts lower prices for lots in SBE’s inventory). SBE directs consumers to realtors that do 

not genuinely attempt to sell the lots, PXI ¶ 68, tears down “for sale” signs from lots, and 

prevents or limits prospective purchasers from entering the development. PXT ¶ 27; PXQ ¶ 58.

7. Contrary to Their Repeated Assertions to Consumers, Sanctuary 

Belize Is Not Pukke Free. 

 In addition to the six Core Claims, some consumers ask about Pukke during the sales 

process, and, when they do, SBE denies his involvement. Because the telemarketing process 

often extends for weeks of lengthy calls and webinars, consumers sometimes perform internet 

research and locate information about Pukke’s history with AmeriDebt and the development. 

PXI ¶ 20. One such consumer explained that this information “was an enormous red flag for 

me,” and had he “known Pukke had or would have anything to do with Sanctuary Belize, my 

wife and I never would have purchased a lot.” Id. When the consumer raised his concerns, SBE 

telemarketer Robert Schafnitz “was completely clear that Pukke was no longer involved with 

Sanctuary Belize in any way whatsoever.” Id. at ¶ 21. This representation “was critically 

important” to the consumer, who then made a $10,000 deposit on a lot he later purchased. See 

id. When an FTC employee posing as a potential buyer’s attorney asked about Pukke’s 

involvement, Frank Costanzo (a defendant in the closely-related Ecological Fox action) said that 

Pukke’s only involvement “is that he runs a marketing company” connected with the 

development, PXQQ ¶ 48:41 at 8:22-9:7, and emphasized that “Pukke has no relationship or 

ownership or control of this development or this property.” Id. at 8:8-12 (emphasis added). 
17 

Costanzo even denied having seen Pukke since December 2016, PXQQ ¶ 48:41 at 24:11-22, 

despite attending a business lunch with Pukke in Belize in May 2017. PXGG ¶¶ 31:29 and 35; 

PXL ¶¶ 3-9; PXQQ ¶ 142 (analyzing photos taken of this meeting involving Pukke, Costanzo, 

and others). As already detailed, Pukke is still very much involved, including claiming to be the 

“CEO” and having an equity stake in Sanctuary Belize.

B. SBE’s Misrepresentations Violate the Final Order. 

 The Final Order specifically prohibits Pukke and all those with knowledge of the order 

acting in concert or participation with him from “making or causing or assisting other to make, 

expressly or by implication, any false or misleading representation” “in connection with the 

telemarketing of any good or service,” or otherwise violating the TSR, which also prohibits 

misrepresentations. DE473 Section II.A and II.D, 16 CFR § 310.3. As detailed above, each of 

these claims are false, and Pukke, Baker, and Usher—in their roles as SBE control people—

participated in the claims and controlled them despite having knowledge of the Final Order. 

Furthermore, given the prominent role of telemarketers, the misrepresentations are “in 

connection with telemarketing,” and therefore violate the Court’s explicit restrictions on 

deceptive telemarketing. As to the Fourth Circuit’s “knowledge” requirement, this does not 

require intent or willfulness. Schwartz, 261 F. Supp. 3d at 612-13 (“Willfulness is not an 

element of civil contempt.”) (quoting Redner’s Markets, Inc. v. Joppatown G.P. Ltd. P’ship, 608 

Fed. Appx. 130, 131 (4th Cir. 2015)). While each plainly did act willfully and intend to harm 

their victims, their knowledge of the Final Order, established at the outset, coupled with their 

actions in violation of the Final Order detailed above, show that they had “knowledge” of their 

violations, as that term is construed by the Fourth Circuit. See Schwartz, 261 F. Supp. 3d at 614 

(violations with “actual or constructive” knowledge of the terms of the order sufficient); 

Colonial Williamsburg Found., 38 F. 3d at 136-37 (one with knowledge of an order cannot 

defeat contempt by stating they did not know the terms of the order or by abdicating 

responsibility to ensure compliance with an order). 
18 

 Although the Final Order is limited to “goods and services,” this includes the Sanctuary 

Belize lots. Given the frequent references to the Telemarketing Sales Rule (“TSR”), 16 C.F.R. 

Part 310, in the Final Order, and telemarketing generally, the phrase has the same meaning as it 

does in the TSR.40 The TSR is coextensive with the FTC’s jurisdiction, which includes real 

estate schemes. See S.R. No. 103-80 (June 22, 1993) at 8 (specifying that “the phrase ‘goods or 

services’ . . . to be broadly construed so as not to exclude activities currently addressed by the 

FTC”) (emphasis added); Southwest Sunsites, Inc. v. FTC, 785 F.2d 1431, 1437-39 (9th Cir. 

1986) (affirming an administrative order enjoining a seller of lots in West Texas); AMREP Corp. 

v. FTC, 768 F.2d 1171, 1175 (10th Cir. 1985) (affirming the FTC’s “jurisdiction to regulate 

interstate land sales”); cf. Lorillard v. Pons, 434 U.S. 575, 581 (1978) (noting that Congress is 

“presumed to have had knowledge” about case law when it enacts a statute). 

 The FTC confirmed the breadth of “goods or services” when it issued the TSR in 1995,41

explaining that it was “unaware of any reason why the [TSR] should create a special exemption 

for . . . companies where the FTC Act does not do so,” 60 Fed. Reg. 43842, 43843, and then later 

specifically rejected exemptions sought by various industries. Id. at 43859. In 2003, the FTC 

again reiterated the breadth of the TSR in refusing to provide an exception for transactions 

governed by the Real Estate Settlement Procedures Act (“RESPA”), 68 Fed. Reg. 4580, 4606 

fn.306, and then refused to provide an exemption for real estate agents while reiterating that “if a 

real estate agent routinely places outbound calls to solicit potential customers in other states, 

those calls . . . would be subject to the Rule,” id. at 4655. Notably, the contemnors also consider 

the lots “goods and services,” referring to them as such while collecting the 12.5% Belizean sales 

tax, which only applies to goods and services. See, e.g., PXQQ ¶ 170. 

 

40 Like the Final Order, the TSR bars activities related to the telemarketing of “goods and 

services.” 16 C.F.R. § 310.3. 

41 The FTC’s interpretation and explanation of its own rule has nearly the same force as the 

rule’s text. See, e.g., Decker v. NW Environmental Defense Ctr., 133 S. Ct. 1326, 1337 (2013) 

(“It is well established that an agency’s interpretation need not be the only possible reading of a 

regulation—or even the best one—to prevail. When an agency interprets its own regulation, the 

Court, as a general rule, defers to it unless that interpretation is plainly erroneous or inconsistent 

with the regulation.”) (internal quotes omitted). 
19 

 Numerous courts have similarly determined that goods or services includes the sale of 

lots in a development like Sanctuary Belize. These cases reason that even if the land itself were 

not a “good” in the strict legal sense, the promises related to the construction of a building or 

provision of services in the related development render the entire transaction a sale of goods or 

services because the sale is about more than the mere transfer of land rights. Polonetsky v. Better 

Homes Depot, Inc., 760 N.E.2d 1274, 1278 (N.Y. 2001) (sale of house was goods and services 

because the promises of additional construction and financing made it part of an “orchestrated [] 

system of providing goods and services under which prospective buyers were defrauded or 

misled every step of the way.”); Fogelson v. Wallace, 405 P.3d 1012, 1031 (N.M. 2017) (holding 

that, although a lot is not a “good or service” under New Mexico’s consumer protection law, 

selling a lot plus a promise to build a home on the lot brings the transaction within the statute); 

Brown v. Liberty Clubs, Inc., 543 N.E.2d 783, 786-87 (Ohio 1989) (offering steak knives to 

consumers who visited development to consider purchasing lots rendered the lot sales subject to 

Ohio consumer protection law that covers “goods and services”).42 

V. BAKER AND USHER ARE BOUND BY THE FINAL ORDER AND LIABLE FOR 

SBE’S VIOLATIONS. 

 The Final Order binds nonparties Baker and Usher. Rule 65(d) specifies that all 

individuals with notice of the order “in active concert or participation” with a party or a party’s 

agent are bound by the relevant injunction. This is true because otherwise parties could “nullify 

a decree by carrying out prohibited acts through aiders and abettors.” Regal Knitwear Co. v. 

N.L.R.B., 324 U.S. 9, 14 (1945); K.C. ex rel. Africa H. v. Shipman, 716 F.3d 107, 115 (4th Cir. 

2013) (same). Indeed, the FTC is frequently required to pursue nonparties who take steps to 

 

42 See also McKinney v. State, 693 N.E.2d 65, 71 (Ind. 1998) (distinguishing between the 

“sale of an existing structure” from a promise to build something for consumer protection 

purposes; “the promise to build a structure forces consumers to rely on a variety of 

representations that the builder is far more capable of evaluating”); State ex rel. Brady v. 

Wellington Homes, Inc., No. Civ. A. 99C-09-168, 2003 WL 22048231, *4 (Del. Super. Ct. Aug. 

20, 2003) (holding that a transaction promising to build a house on a lot is potentially a “good or 

service” because it involves “attendant labor and expertise,” including “plans as approved by the 

county, building code compliance, and so forth”). 
20 

violate court orders entered in the Commission’s favor. See, e.g., FTC v. Leshin, 618 F.3d 1221, 

1236 (11th Cir. 2010) (holding nonparty businesses controlled by a party in contempt); FTC v. 

Neiswonger, 494 F. Supp. 2d 1067, 1078-79 (D. Mo. 2007), aff’d, 500 F.3d 769 (8th Cir. 2009) 

(nonparty business partner with knowledge of the order subject to contempt sanctions); FTC v. 

Gill, 183 F. Supp. 2d 1171, 1184 (C.D. Cal. 2001) (holding nonparty nonprofit in contempt). 

Notably, the Court has held Baker in contempt of the Final Order once before. DE571. Because 

Baker and Usher have been operating the scheme with Pukke, they are bound by the Final Order 

and subject to this Court’s jurisdiction and, as contemnors, are subject to sanctions for their 

conduct. See, e.g., Leshin, 618 F.3d at 1237 (issuing sanctions against nonparty contemnor). 

VI. PUKKE, BAKER, AND USHER SHOULD BE ORDERED TO FULLY 

COMPENSATE CONSUMERS FOR THEIR LOSSES. 

 This Court has broad authority to ensure the FTC and consumers are fully compensated 

for their losses. United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 (1947); In 

re Gen. Motors Corp., 61 F.3d 256, 259 (4th Cir. 1995) (citing McComb v. Jacksonville Paper 

Co., 336 U.S. 187, 193-94 (1949)). The FTC is entitled to “full remedial relief,” McComb, 336 

U.S. at 193, including full refunds for consumers. FTC v. BlueHippo Funding, LLC, 762 F.3d 

238, 244-45 (2d Cir. 2014) (explaining this is the standard under the FTC Act nationally, as 

applied by all Courts of Appeal to address the issue, and that it applies when determining 

contempt sanctions in an FTC action); McGregor v. Chierico, 206 F.3d 1378, 1389 (11th Cir. 

2000); FTC v. EDebitPay, LLC, 695 F.3d 938, 945 (9th Cir. 2012); FTC v. Ross, 897 F. Supp. 2d 

369, 387-88 (D. Md. 2012) (FTC Act monetary relief based on “gross receipts”), aff’d, 743 F.3d 

886 (4th Cir. 2014).43 Consumers will be entitled to full refunds notwithstanding any argument 

by the contemnors that the lots have some value because they tainted the entire transaction with 

their misrepresentations. BlueHippo Funding, LLC, 762 F.3d at 244 (misrepresentations “taint 

 

43 When the misrepresentations are widely disseminated, as they are here, the FTC is 

entitled to a presumption that all of the sales are tainted. Ross, 897 F. Supp. 2d 387-88; 

BlueHippo Funding, LLC, 762 F.3d at 244. 
21 

the consumer’s subsequent purchasing decisions”); McGregor, 206 F.3d at 1388-89 (explaining 

that in an FTC contempt action, as in standard FTC cases, a contemnor does not receive any 

credit for the purported “value” of a product sold based on misrepresentations). Additionally, the 

FTC need only prove compensatory sanctions by a preponderance of the evidence. In re General 

Motors Cop., 110 F.3d 1003, 1018 (4th Cir. 1997). Although the FTC has yet to determine the 

precise amount of consumer harm, it is almost certainly more than $100 million, given Grant 

Thornton’s current $144 million estimate of consumer payments since 2012. Furthermore, this 

number is likely to grow because it only includes deposits since 2012, PXB ¶ 36:18, and does not 

include the amounts the contemnors received through their Belizean bank accounts. As Grant 

Thornton explains, those accounts are significant, PXB ¶¶ 30-31. Therefore, the FTC asks the 

Court to hold the contemnors in contempt while allowing the FTC to collect additional evidence 

to prove the full extent of consumer harm.44

/ 

/ 

/ 

/ 

/ 

/ 

/ 

/ 

/ 

/ 

/ 

/ 

 

 

44 The FTC will be able to use discovery and, if the Court grants the temporary restraining 

order in Ecological Fox, the FTC will have access to the contemnors’ own accounting systems to 

determine the full financial magnitude of their deceptive scheme. 
VII. CONCLUSION 

Pukke, Baker, and Usher have operated a massive deceptive telemarketing scheme in 

contempt of this Court's Final Order. They should, therefore, be held in contempt and ordered to 

pay monetary relief equal to the amount that they took from consumers, which will be more than 

$1 00 million. 

Dated: ldL 51 /I~ 

Respectfully submitted, 

JONATHAN COHEN, D. Md. Bar No. 16776 

jcohen2@ftc.gov 

BENJAMIN J. THEISMAN,pro hac vice 

btheisman@ftc.gov 

AMANDA B. KOSTNER, pro hac vice 

akostner@ftc.gov 

KHOURYANNA D1PRIMA, pro hac vice 

kdiprima@ftc.gov 

600 Pennsylvania Ave. NW, CC 9528 

Washington, DC 20580 

Phone: (202) 326-2551 (Cohen), -2223 (Theisman), 

-2880 (Kostner), -2029 (DiPrima) 

Facsimile: (202) 326-3197 

ATTORNEYS FOR PLAINTIFF 

FEDERAL TRADE COMMISSION 

22