Case 1:18-cv-03309-PJM Document 539-1 Filed 08/02/19 Page 1 of 58

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MARYLAND 

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IN re SANCTUARY BELIZE 

LITIGATION * Civil No. PJM 18-3309 

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MEMORANDUM OPINION IN SUPPORT OF PRELIMINARY INJUNCTION 

On October 31, 2018, the Federal Trade Commission ("FTC") filed a Complaint in this 

Court, alleging that certain named Defendants were perpetrating a large-scale land sales scam on 

its consumer base of largely U.S. customers, seeking, as part of its requested relief, a Preliminary 

Injunction. Defendants are a web of corporate entities and individuals that, the FTC says, comprise, 

direct, and control what the FTC collectively terms the Sanctuary Belize Enterprise ("SBE''), 

located in Belize. The entities comprising SBE include Global Property Alliance, Inc. ("'GPA"), 

Eco-Futures Development, Eco-Futures Belize, Ltd. ("Eco-Futures (BZ)"), Sittee River Wildli fo 

Reserve ("SRWR"), Buy International, lnc. ("Buy International"), Buy Belize, LLC ("Buy 

Belize"), Foundation Development Management, Inc. ("FDM"), Power Haus Marketing ("Power 

Haus"), Ecological Fox, LLC ("Ecological Fox"), Belize Real Estate Affiliates, LLC ("BREA"), 

Southern Belize Realty, LLC ("SBR"), Exotic Investor, LLC ("EI"), Foundation Partners ("FP"). 

BG Marketing, LLC ("BG Marketing"), Prodigy Management Group, LLC ("Prodigy"), Newport 

Land Group, LLC, and the Sanctuary Belize Property Owners· Association (''SBPOA,'' aka ·'The 

Reserve Property Owners' Association"). The FTC also sued Atlantic International Bank, Ltd. 
Case 1:18-cv-03309-PJM Document 539-1 Filed 08/02/19 Page 2 of 58

("AIBL"), located in Belize, for allegedly assisting in the deceptive telemarketing, sales, and 

development practices of SBE. 1 

The individual Defendants are Andris Pukke and Peter Baker, as well as Luke Chadwick, 

John Usher, Brandi Greenfield, Rod Kazazi, Frank Costanzo, and Michael Santos. The Complaint 

also names Angela Chittenden, Deborah Connelly, John Vipulis,2 the Estate of John Puk.ke, and 

Beach Bunny Holdings, LLC ("Beach Bunny Holdings") as Relief Defendants. On February 13, 

20 19, Greenfield, Kazazi, Costanzo, Santos, Chittenden, Connelly, FP, BG Marketing, Ecological 

Fox, and Beach Bunny Holdings stipulated to the entry of the Preliminary lnjunction.3 ECF No. 

195. Pukke and Baker have filed written oppositions to the Motion for Preliminary Inj unction. 

No other individual Defendants have stipulated to the entry of a Preliminary Injunction, but none 

have filed oppositions to the Motion. Chadwick, however, has moved to dismiss the claims against 

him for lack of personal and subject matter jurisdiction. ECF No. 475.

4 

1 On July I 0, 2019, the FTC notified the Court tbat AIBL had agreed to settle the FTC's claims against it. The FTC 

also moved to stay al l proceedings against AIBL for sixty (60) days so that the full Federal Trade Commission could 

review the settlement agreement. ECF No. 5 17. That same day, the Court granted the FTC's Motion to Stay as to 

AIBL. ECF o. 520. Should the full Commission approve the settlement agreement of the FTC's claims, the Court 

will await further instructions from the FTC and AIBL as to AIBL's status in the case. 2 The FTC settled its claims against Vipulis on March 25, 20 19, after Vipulis turned over approximately $4.1 million 

to the Receiver. ECF No. 352. 3 On July 23, 20 I 9, the FTC moved to stay all proceedings against Costanzo, Connelly, and Ecological Fox for sixty 

(60) days so that the full Federal Trade Commission could review a proposed settlement agreement with those 

Defendants. ECF No. 527. On July 26, 2019, the Court granted the FTC's Motion. ECF No. 532. Should the full 

Commission approve the settlement agreement of the FTC's claims, the Court will await further instructions from the 

FTC and Costanzo, Connelly, and Ecological Fox as to their status in the case. 4 Chadwick waited some seven months after being served with process, and until after the Preliminary Injunction 

hearing in March 2019, to file his Motion. The Court decides the personal jurisdiction argument raised in Chadwick's 

Motion on the papers without a hearing, Local Rule I 05.6, as set forth in Section II of this Memorandum Opinion, 

beginn ing on page 12, infra. The Motion, as will be seen, is DENIED. 

Chadwick also argues that the FTC's claims against him should be dismissed for lack of subject matter jurisdiction 

and for failure to state a claim upon which relief may be granted. ECF No. 475 at I. Since there is no sanction to be 

imposed on Chadwick as part of the Preliminary Injunction, the Court will address his arguments in a separate 

Memorandum Opinion to be issued later. 

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From March 11 to March 22, 2019, the Court held an evidentiary hearing on the FTC's 

Motion. Based on the evidence, oral argument presented at the end of that hearing, and the 

Proposed Findings of Fact and Conclusions of Law submitted by various parties post-hearing, the 

Court GRANTS the FTC's Motion for Preliminary lnjunction as to all Defendants who have not 

at this time settled their claims with the FTC. 

I. Factual and Procedural Background 

A. Alleged Concealment of the Belizean Parcel.from the Receiver in FTC v. AmeriDebt 

The case involves a large mass of land in Southern Belize, roughly the size of Manhattan, 

where individual lots in a planned residential and commercial community have been marketed to 

thousands of consumers and sold to residents of the United States. 

Some critical history precedes the current litigation. 

1n 2003, the FTC sued Pukke under Section 5 of the Federal Trade Commission Act ("FTC 

Act"), 15 U.S.C. § 45(a), in connection with what it alleged were fraudulent activities related to 

two credit counseling companies he owned and/or operated. Civ. No. PJM-03-3317, FTC v. 

Ameridebt, Inc. et al ("AmeriDebt;" since consolidated with the present case). The Court entered 

a preliminary injunction against Pukke and other defendants in that case, FTC v. Ameridebt, Inc., 

373 F. Supp. 2d 558 (D. Md. 2005), following which Pukke agreed to a Stipulated Final Judgment 

and Permanent Injunction. AmeriDebt, ECF Nos. 408, 41 I, 473. Pursuant to the Final Order of 

Judgment in AmeriDebt, the Court appointed a Receiver, Robb Evans & Associates, LLC,

5 to 

5 Robb Evans & Associates has also been functioning as the Receiver in the present litigation and, as the Court directed 

at the end of the hearing on Plan Management held on July 9, 2019, see supra, n. 34, will continue to do so until the 

merits phase of this case. For the sake of simplicity, the Court will refer to Robb Evanr. throughout as the ·'Receiver." 

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marshal and liquidate up to $35,000,000 of Pukke's assets in order to provide the FTC with funds 

to compensate Pukke's victims. AmeriDebt, ECF No. 473 at 13. 

At the time of the AmeriDebt action, Pukke and Baker, along with several other associates 

and family members, owned interests in two Belizean entities: Dolphin Development, LLC 

("Dolphin") and Sittee River Wildlife Reserve ("SRWR"). PX 358; PX 359; PX 361. Through 

Puck Key Investments L-8, LLC ("Puck Key 8"), an entity he wholly owned, Pukke held a 60% 

interest in Dolphin (Baker, his mother, and his stepfather held the remaining 40%). PX 358. While 

serving as an SRWR director, Pukke loaned it $1.5 million to buy 11,755 acres in southern Belize 

and loaned Dolphin $1.5 million to buy 350 adjacent acres. PX 356 ,r 11. In May 2005, SRWR 

also bought a five-acre island, now known as "Sanctuary Caye." PX 378; PX 192 ,r 3, Att. 24 at 

11 ( copy of the minutes of the 2016 Annual General Meeting of SR WR, signed by "Peter Baker, 

Chairman"). These land acquisitions collectively formed the parcel ofland (the "Belizean Parcel") 

on which Pukke, Baker, and the other Defendants in the present case have collaborated to develop 

and market the community at issue today-Sanctuary Belize (also known as Sanctuary Bay Estates 

or the Reserve). In 2005, throughout the United States, Dolphin commenced telemarketing lots on 

the Belizean Parcel as part of the Sanctuary Belize residential and commercial development plan, 

and in August 2005 Dolphin sold its first lot in the development. PX 363 (lot sale contract for 

Dolphin, dated August 1, 2005). 

After the Final Order of Judgment in the AmeriDebt case was entered, Pukke apparently 

retained control of the Reserve, but actively concealed his interest in the property from the 

Receiver. Pukke was alleged to have misrepresented to the Receiver both his ownership stake in 

and the fiscal solvency of Dolphin. Pukke also transferred Dolphin's development rights and a 

portion of the Belizean Parcel to two entities controlled by Baker in an apparent effort to make 

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SRWR appear to be without assets. PX 361; PX 371; PX 372; PX 373; PX 374; PX 375; PX 376; 

PX 377; PX 379; PX 380. When the Receiver became aware of this legerdemain, it moved to have 

both Pukke and Baker held in contempt of court for, among other things, refusing to turn over the 

land and for taking steps to remove it from the Receiver's control. 

On March 30, 2007, following an evidentiary hearing held in February and March of 2007, 

the Court found Pukke and Baker in civil contempt for their refusal to turn over receivership assets 

and ordered them to immediately tum over control of the Belizean Parcel to the Receiver. 

AmeriDebt, ECF No. 571. To faci litate the Receiver's ability to control the Belizean Parcel, the 

Court issued a second order unwinding the alleged sales of Pukke's interests in Dolphin (i.e., his 

interests in Sanctuary Belize) and ordering these assets re-vested in Dolphin (which the Receiver 

controlled). AmeriDebt, ECF No. 572. 

Pukke and Baker, however, failed to comply with the Court's Orders, i.e., to purge their 

contempt. Accordingly, on April 30, 2007, the Receiver moved to have both men incarcerated in 

order to coerce their compliance with the Court's Orders directing the turnover of their interests in 

the Belizean Parcel and related documents. 6 AmeriDebt, ECF Nos. 596, 597. On May 4, 2007, the 

Court again found Pukke and Baker in Contempt, remanded them to custody of the U.S. Marshal 

and had them incarcerated. AmeriDebt, ECF No. 604. Baker and Pukke were eventually released 

from custody after serving approximately two weeks and one month in custody, respectively. 

Their release was conditioned on cooperating in the turn-over of Pukke's assets to the Receiver, 

including the Belizean Parcel AmeriDebt, ECF Nos. 61 4, 622, which, in part at least, they did do. 

6 At approximately the same time, members ofSRWR's Board of Directors connected to Pukke and Baker, including 

John Usher, met and terminated any rights Dolphin, Baker, or any of Baker's entities might have had in the Belizean 

Parcel. PX 380. 

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Approximately one year later, on March 27. 2008, realizing that it would be exceedingly 

difficult and costly to enforce its rights to control the Belizean Parcel, the Receiver undertook to 

cash out its claims to ownership over it. AmeriDebt, ECF No. 682. In consequence, an agreement 

was reached whereby the Receiver would sell the land to SR WR for $2 million. Id. No party 

objected to the sale, and on April 15, 2008 the Court approved it without comment. AmeriDebt, 

ECF os. 684, 686. 

Notwithstanding the foregoing, the FTC alleges in the present litigation that it was Baker 

who raised the funds to purchase the Belizean Parcel from the Receiver, and that Pukke, through 

Baker, retained effective control of the development and marketing operations for Sanctuary 

Belize, which, after the Receiver's involvement terminated, allegedly continued to operate under 

the name Defendant Eco-Futures Belize, Ltd. PX 1921 3, Att. 24 at 12 (2016 SRWR General 

Annual Meeting minutes, detailing the 2008 purchase of the Belizean Parcel for $2 million from 

the AmeriDebt Receiver); PX 395 (emails between Baker and Greenfield discussing sales tours of 

the Reserve scheduled for February 2009, also forwarded to Pukke in 2011 ); Baker Dep. Tr., 

2/19/ 19, 123: 17- 124: l (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"). 

1n short, the FTC contends that at all relevant times Pukke effectively controlled the 

Belizean Parcel-the land on which Sanctuary Belize has been developed-as well as the 

associated marketing and sales operations, all the while concealing the fact of his affiliation with 

the enterprise from the AmeriDebt Receiver. The nexus between FTC v. AmeriDebt and the 

Belizean Parcel purportedly gave rise to a multitude of violations the FTC says characterize the 

present litigation. 

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B. Marketing and Development o_f Sanctuary Belize 

Through his control over the SBE entities, says the FTC, Pukke participated in and directed 

the fraudulent behavior of other individual Defendants in their capacities as principals of various 

SBE enterprises. The core of the FTC's allegations is that Defendants perpetrated an unlawfully 

deceptive telemarketing scheme through which they attempted to convince, and in many instances 

did convince, American consumers to buy lots at Sanctuary Belize. Those purchases were 

aJlegedly accomplished by making promjses to consumers that Puk.ke, the SBE entities, and other 

Defendants knew to be false and contrary to the experiences of other lot purchasers. Beyond that, 

revenue from lot sales at Sanctuary Belize is alleged to have been redirected by several Defendants 

to their own personal use and for projects unrelated to the development of Sanctuary Belize. 

The FTC identifies six "core clrums" Defendants purportedly made to customers, knowing 

they were false and misleading: (1) that SBE's "no debt" business model made Sanctuary Belize 

a less risky investment than one in wruch the developer would have to make payments to mortgage 

lenders and creditors; (2) that in part because of the "no debt" model, every dollar the developer 

collected from lot sales would be reinvested in the development; (3) that trus funding stream meant 

the developer would finish the development qujckly, i.e., witrun two to fi ve years; (4) that the 

finished development would boast luxury amenities including, among other trungs, a hotel, an . 

American-caliber hospital, and a nearby airport; (5) that those amenities meant that the lots would 

appreciate in value from 200% to 300% witrun two to three years; and (6) that consumers would 

realize this rapid appreciation without difficulty because there would be a robust market for resale 

of the lots. 

Since 2005, SBE has sold over 1,000 lots at the Belizean Parcel, including some that have 

been sold more than once. PX 816 at 20- 23. SBE's marketing team has employed extreme 

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advertising techniques across the United States, including promotions on such television channels 

as Fox News and B.Joomberg. PX 205 ~ 13; Pl Hrg Tr.. 3/11/19 Afternoon, 82:8- 16. SBE has also 

maintained websites to which consumers could and did navigate, which urged potential customers 

to submit contact information to SBE in order to learn more. PI Hrg Tr. 3/11/19 Morning, 48-49; 

Pl I-Irg Tr. 3/19/19 Afternoon, 59:9- 12: PX 399. 

The marketing process operated more or less as follows: 

California-based telemarketers would call consumers who responded to SBE's initial 

various marketing efforts. PI Hrg Tr., 3/1 1 / 19 Afternoon, 82: 17-24; PI Hrg Tr., 3/19/19 Afternoon 

59: 17- 21. Pukke, in particular, but other SBE principals as well, coached sales employees to 

"create a sense of urgency" and a "fear of loss" on the part of prospective purchasers, techniques 

that the telemarketers then used in their calls with consumers. PX 207 ~ 5 and Att. 3 at 1; PI Hrg 

Tr., 3/19/19 Afternoon, 60:22-61: 1 0; PX 196 ~ 10. After capturing the interest of prospective 

consumers, typically by touting as enticements the promises reflected in the Core Claims, SBE 

telemarketers encouraged consumers to participate in a webinar during which a higher-level sales 

agent would speak with them over the telephone, often transmitting slick development photos and 

graphics to the consumers' computers. PX 307; PX 308; PX 309; PX 31 0; PX 200 ~~ 8:5-6, 17: 13; 

PX 186 ~ 8; PX 205 ~ 14; PX 336; PX 337; PX 186 ~ 9:3 (attaching webinar). The presenters 

during the webinars varied, but at different points both Costanzo and Chadwick were definitely 

participants. PX 814 ~ 8 PX 186 ~ 9:3; PX 184, Att. 43 at 186 (notes on webinar taken by lot 

purchaser). 

The purpose of the webinars was to persuade customers to travel to Belize and tour the 

Reserve in person. The consumer would pay his or her own airfare to and from Belize, but for 

$999, the consumer would receive an all-inclusive tour, including lodging at a resort nearby the 

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Reserve, free food, meals, drinks, and internal transportation. PX 184 ,i 11 ; PX 186 ,i 21 · PX 191 

1 13; PX 193 ,i 13; PX 194 ,r,r 5, 6, 61; PX 195 ,i,r 11 , 46; PX 196 ,i 17; PX 198 ,i 8; PX 200 ,i,i 

12- 13, 47; PI Hrg Tr., 3/11/19 Afternoon, 86:3- 18; PI Hrg Tr., 3/11/19 Morning, 54-55; PX 182 

,r 9; PX 202 ,r 7; PX 183 ,i 9; Pl Hrg Tr., 3/11/19 Morning, 55; PI Hrg Tr., 3/11 /19 Afternoon, 

86: 12- 87: 1; PI Hrg Tr., 3/19/ 19 Afternoon, 62:5- 10. Before going to Belize to tour the Reserve, 

conswners were encouraged to sign "non-binding lot reservation agreements." PX 41 0; PX 205 ii 

14; PX 605; PX 821 ; Pl HrgTr., 3/11 /19 Afternoon, 87:12- 23. Pursuant to those agreements, again 

before departing, some conswners paid between $2,000 and $10,000 to SBE to obtain the right of 

first refusal on particular lots. PX 41 0; PX 181 ,r 8:3 (attaching lot reservation agreement); PX 205 

,i 18, Att. 17 (same); PX 186 ,r 21; PX 198 ,i 8; 5- 6; PI Hrg Tr., 3/11/19 Afternoon, 87:12-88:7; 

PI Hrg Tr., 3/19/19 Afternoon, 61: 11- 16 (in at least one case a conswner made a $20,000 down 

payment on a lot and signed a memorandum of sale before visiting the property or meeting with a 

telemarketer face to face). Their deposits were either credited toward the purchase price of the 

reserved lot or the purchase of another lot, but would be refunded if the conswner decided not to 

complete the sale. PX 200 ,i 13; PX 198 ,r 25; PX 202 ,r 7; PX 188 ,i 8; PX 205 ,r 18, Att. 17. 

Finally, some consumers, albeit a relative few, agreed to purchase lots outright either before going 

on the tour or without ever going on the tour. PX 254 ,i 14 (authenticating PX 258, attachment 4 

to the Batal Declaration, a sales script from 2012); PX 258 at 11 (SBE marketing script, stating 

"You have 4 choices: ... Purchase a home site sight unseen (23% of our owners have done this)."); 

PX 819- 828 (emails, lot purchase agreements, and SBE spreadsheets showing that some 

consumers purchased prior to a tour). 

Tours in Belize typically gathered five to ten couples, who as a group toured the Reserve, 

visited lots, and attended sales presentations. During the sales presentations and tours, SBE 

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employees would reiterate promises incorporating one or more of the six Core Claims. PX 312; 

PX 198, 12, Atts. 9- 1 0; PX 191 , 16- 26; PX 182 ,r 15-24. PI Hrg Tr.. 3/19/19 Afternoon, 69:4-

70: 1. Presenters in Belize would vary, but at various times definitely included Usher, Chadwick, 

and Costanzo. PX 194 ,r,r 7, 11, 14; PX 195 ,,r 7- 10; PX 196 ,r 22; Pl Hrg Tr., 3/19/19 Afternoon, 

67:5- 18; PI Hrg Tr., 3/11/19 Morning, 57- 58 (testifying that Chadwick gave property tour and 

reiterated that the development was debt free). Sometimes sales presentations in Belize would 

include presentations by local service-providers such as Coldwell Banker Southern Belize (the 

local office of Defendant Southern Belize Realty), who assured consumers, by advertising their 

own services, that the Belizean community was ready, willing, and able to satisfy consumer needs. 

PX 752 ,r,r 9- 10; PI Hrg Tr., 3/11 /19 Afternoon, 89:14-22; PI Hrg Tr., 3/11/19 Afternoon, 102:25-

103:6; PI Hrg Tr., 3/19/19 Afternoon, 69:20-70:23. Consumers were not always able to visit the 

specific lots on which they had placed a deposit, often because of terrain issues such as overgrown 

jungle on uncleared lots or the flooding of unpaved roads. PX 202 ,r 34; PX 199 1 5; PX 195 1 7. 

From the beginning of the sales process, SBE represented to consumers that if they 

purchased a lot, they would "own" that lot. PX 205 ,r 16 (Declaration of SBE sales employee: "We 

said that once a customer purchased a lot, they would own it. We also called everyone who 

purchased 'owners."'); PX 203 ,r 13 (Declaration of SBE sales employee: SBE told prospective 

consumers ·'they would own their lot"). As such, after returning to the United States from the tours 

where they purchased lots, the new "owners" began to receive invoices for monthly payments on 

the lots (payable to SBE) as well as from a homeowner's association (HOA) for dues in the amount 

of $100 per month per lot. PX 183 1 39, Att. 21 ; PX 181 ~ 40, Att. 1 O; PX 186 ,r 34, Att. 26; PX 

184 ,r 48, Att. 42; PX 202 , 39, Att. 32; Pl Hrg Tr., 3/ 11/19 Morning, 77-78 (lot purchaser 

testifying about invoices for homeowners' association fees). Purchasers were advised that these 

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payments were subject to a 12.5% Be!ize<J.n General Sales Tax ("GST"). PX 409; PX 456; PX 457; 

PX 458; PX 459; PX 460; PI Hrg Tr., 3/11/19 Afternoon, 103:18- 104:8, PX 881; PX 882; PI Hrg 

Tr., 3/1 1/19 Morning, 68-69 (lot pun;haser testifying that he made monthly payments of 

approximately $3,000 to Eco-Futures in California). SBE explained to purchasers that the GST 

was charged on all sales of goods and services, which meant that, dating from the purchase of their 

lot to the final construction of their home, the tax would be applicable. PX 196 ,r 38 and Atts. 41 , 

42; PX 456; PX 458; PX 459; PX 460; see also PX 457 (representing in marketing materials that 

OST is "charged on [the sale of] goods and services"); PX 459 (stating, in a "Sanctuary Bulletin" 

marketing email, that GST " is a consumer tax (12.5%), applied to most goods and services). 

Customers made these payments to SBE in California and to the HOA's address in Texas, 

respectively. 

The development of Sanctuary Belize, however, began to lag behind the timeline SBE had 

projected, and as it did, a number of purchasers attempted to mitigate their losses by seeking to 

sell back their lots to SBE or by suing it. Some owners simply stopped making payments on their 

lots, as a result of which SBE threatened them with "foreclosure," meaning it would simply take 

the lots back unless the consumer resumed making monthly payments. That apparently is precisely 

what some owners intended to happen. PX 462; PX 463; PX 464; PX 186 ,r 72, Att. 89, ,r 74, Att. 

92, ,r 75; PX 789 ,r,i 10-11. Occasionally SBE was willing to buy back a lot from a consumer, but 

almost always it did so at a loss to the purchaser, never at a profit, and never via a lump sum 

payment, only through payments made over time. PX 814 ,: 47; PX 816 at 14; see also PX 466 

and PX 519 (various buyback and tennination agreements). Typically, SBE would undertake to 

re-market the bought-back lots to new consumers. PX 471; PX 636; PX 637; PX 638; cf PX 816 

,r 14. 

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In 2016, a group of 200 dissatisfied consumers known as the Independent Owners of 

Sanctuary Belize ("IOSB") sued SBE in Belize.7 PX 202 ~ 46- 54, Atts. 17, 31. Since then, 

dissatisfied owners have filed at least seven actions in California state courts, in general alleging 

that various SBE entities defrauded them into purchasing lots, luring them on the basis of one or 

more of the Core Claims. Since SBE s Lot Sale Agreements contain forum selection clauses that 

require litigation, if any, to take place in Belize, some California courts have dismissed the 

consumer actions without prejudice at the pleading stage based on those clauses. 8 Other cases in 

California courts apparently settled before the SBE entities could file motions to dismiss based on 

the choice of forum clauses.9 As of this writing, motions to dismiss in California courts based on 

the choice of forum clauses are pending in two remaining actions.

10 

II. Personal Jurisdiction over Luke Chadwick 

Except for the Motion to Dismiss filed by Luke Chadwick, the motions to dismiss of all 

other parties have been denied. 11 Only Chadwick's Motion to Dismiss, partially on the basis of 

lack of personal jurisdiction, remains. ECF No. 475. Chadwick and the FTC have jointly requested 

7 The SBE entities named as defendants in that litigation countersued several IOSB members for defamation. A 

Belizean court tried the defamation suit before the IOSB suit, and a Belizean judge ruled in favor of SBE. At the 

defamation trial, the IOSB's counsel apparently ended up giving testimony that in fact favored SBE; he subsequently 

left the IOSB and joined SBE. Follow-on counsel retained by IOSB, a prominent Belizean lawyer, was found fatally 

shot in his home, allegedly a suicide. In May 2017, the IOSB's initial counsel negotiated a settlement agreement with 

the SBE entities that had prevailed in the defamation suit against the IOSB, which he forwarded to the IOSB members. 

See PX 202, Att. 31. While this settlement agreement appears to have ended the Belizean litigation, the number of 

IOSB members who ultimately agreed to the settlement is unknown. 8 See Nelson v. Eco-Futures Development, Inc., No.30-2017-937964 (filed Cal. Sup. Ct. Orange Cty. Aug. 16, 2017); 

Fales v. Eco-Fwures Development, Inc. , No. 30-2017-958588 (filed Cal. Sup. Ct. Orange Cty. Nov. 30, 2017). 9 See Miller v. Eco-Futures Development, Inc., No. 30-2018-9781 287 (filed Cal. Sup. Ct. Orange Cty. Feb. 5, 2018); 

Mann v. Eco-Futures Development, ltd., No. 30-2017-926591 (filed Cal. Sup. Ct. Orange Cty. June 16, 2017); 

Plomaritis v. Global Property Alliance, Inc., No. 30-2015-816793 (filed Cal. Sup. Ct. Orange Cty. Oct. 26, 20 15). 10 See Whited v. Global Property Alliance, Inc. , No. 30-2017-937964 (filed Cal. Sup. Ct. Orange Cty. Aug. 16, 20 17); 

Pomroy v. Eco-Fwures Development, Inc., No. 30-20 18-973773 (filed Cal. Sup. Ct. Orange Cty. Feb. 15, 2018). 11 See. e.g., ECF Nos. 434 (Memorandum Opinion denying Santos's Motion to Dismiss for failure to state a claim); 

257. 261 (Motions Hearing and Order denying, among other motions, Pukke's Motion to Dismiss for failure to state 

a claim, ECF No. 161 ). 

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a hearing on his Motion, but the Court decides the personal jurisdiction issue now on the papers 

without a hearing.

12 

Personal jurisdiction over a defendant may be general or specific. General personal 

jurisdiction can be exercised when a defendant has "continuous and systematic general business 

contacts" with a forum state. See Helicopteros Nacionales de Colombia, SA. v. Hall, 466 U.S. 

408, 416 (l 984). In that event, the defendant's contacts must be "so constant and pervasive as to 

render it essentially at home in the forum state." Daimler AG v. Bauman, 571 U.S. 117, 122 (2014) 

(citations omitted). The place of incorporation and the location of a corporation's principal place 

of business are paradigmatic examples of contacts sufficient to support general personal 

jurisdiction in a given forum. Id. at 137 (citations omitted). 

Specific jurisdiction may be exercised over a defendant where "the suit arises out of or 

relates to the defendant's contacts with the forum." Id. at 127 (citations omitted). The present case 

is clearly one of specific personal jurisdiction inasmuch as it arises out of a specific transaction 

that the various Defendants, Chadwick included, had with the relevant forum, namely, the United 

States at large. 

Ordinarily, m determining whether a federal court may exercise specific personal 

jurisdiction over a defendant, the court considers "(l) the extent to which the defendant has 

purposefully availed [himself or] itself of the privilege of conducting activities in the state; (2) 

whether the [plaintiff's] claims arise out of those activities directed at the state; and (3) whether 

12 See infra n. 4. 

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the exercise of personal jurisdiction would be constitutionally 'reasonable."' Carefirst of 

Maryland, inc. v. Carefirst Pregnancy Centers. Inc., 334 F.3d 390, 397 (4th Cir. 2003). 

However, if a statute authorizes nationwide service of process, so long as the assertion of 

jurisdiction over a defendant is compatible with due process, service of process sufficient to 

establish personal jurisdiction over the defendant. See ESAB Grp., Inc. v. Centricut, Inc. , 126 F.3d 

617, 626 ( 4th Cir. 1997). Accordingly, a statute providing for nationwide service expands a district 

court's jurisdiction to the entire country, altering the traditional minimwn contacts test that focuses 

on a defendant's contacts with a particular state and becomes "a national contacts test." See United 

States v. Batato, 833 F.3d 413, 423 n.3 (4th Cir. 2016) (citation and internal quotation marks 

omitted). Because the FTC has statutory authority to effect service of process nationwide, see 15 

U.S.C. § 53(a), the minimum contacts inquiry focuses on a defendant's contacts with the United 

States as a whole, rather than a specific state, such as Maryland. 

Chadwick argues that he has not had nor does he presently have sufficient minimum 

contacts with Maryland, which he claims is the forum state in this case. ECF No. 475-1 at 9- 10. 

However, Chadwick's contacts with the United States as a whole- not with a particular statedetermine whether the Court may exercise personal jurisdiction over him. As explained earlier, a 

statute providing for nationwide service, such as the FTC Act, converts the minimum contacts test 

from one focused on a particular forum state to one focused on a defendant's contacts with the 

entire country. See Batato, 833 F.3d at 423 n.3; ESAB Grp. , 126 F.3d at 626. The Court finds that 

Chadwick had ample minimum contacts with the United States throughout the existence of the 

Sanctuary Belize Enterprise. He was physically present and active in real estate sales and 

brokerage in California and Nevada beginning in 2002 and 2005, respectively. ECF No. 475-1 at 

4. From 2009 to 2014, he also worked for SBE as the sales manager and as a "Principal," and, w1til 

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2015, he maintained an office at the same address in Jrvine, California as numerous other SBE 

Defendants. id. at 6- 7. Chadwick's personal residence is also located in California. id. at 1. 13 

Chadwick contends that requiring him to appear in Maryland would be overly burdensome, 

even while acknowledging his residence in California. The Court is not persuaded. 

In determining whether it is constitutionally reasonable for a district court to exercise 

personal jurisdiction over a defendant, courts weigh factors such as 

(1) the burden on the defendant of litigating in the forum; (2) the interest of the forum state 

in adjudicating the dispute; (3) the plaintiffs interest ir1 obtaining convenient and effective 

relief; ( 4) the shared interest of the states in obtaining efficient resolution of disputes; and 

(5) the interests of the states in furthering substantive social policies. 

Consulting Eng 'rs Corp. v. Geometric Ltd. , 561 F.3d 273, 278 (4th Cir. 2009). 

While litigating in a district other than in the one in which he resides would undoubtedly 

burden Chadwick to some extent, the Court finds that, insofar as this may be inconvenient, it is 

not sufficiently burdensome to defeat personal jurisdiction. Cf In re Chase & Sanborn Corp., 835 

F.2d 1341 , 1346 (11th Cir. 1988) (stating that "[m]odern means of communication and 

transportation have lessened the burden of defending a lawsuit in a distant forum"). Further, the 

Court has already denied an attempt by Pukke to transfer this case to California on similar grounds 

that litigating there would be more convenient and less burdensome on the SBE Defendants. ECF 

0. 261. 

The other reasonableness factors strongly favor the Court's exercise of personal 

j urisdiction over Chadwick without violating his right to due process. The District of Maryland 

has a strong interest in adjudicating the case, given that it traces back to the concealment of the 

13 See also the reasons set forth in Section 111.H.i, infi'a. 

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Belizean Parcel from the Receiver in the A meriDebt litigation that was tried here. Although 

Chadwick was not personally involved· in the AmeriDebt proceeding, he knew that Pukke and 

Baker had been defendants in that case and were subject to a receivership involving assets in 

Belize, see ECF No. 475-1 at 5. As such, he could reasonably have foreseen that working with 

them on Sanctuary Belize sales in California might lead to further proceedings in the District of 

Maryland. 

Additionally, the FTC- which represents the public- has a strong interest in obtaining 

convenient and effective relief in the District of Maryland, since it initiated the case in this Court 

following the alleged concealment by Pukke of property from the AmeriDebt Receiver. Since 

courts in both Maryland and California have similar interests in resolving disputes efficiently and 

furthering social policies, neither of those factors definitively weigh against the reasonableness of 

exercising personal jurisdiction over Chadwick in the District of Maryland. 

In sum, because Chadwick has had sufficient minimum contacts with the United States, 

and the FTC has nationwide power of service of process, it would not violate his due process rights 

for the Court do exercise personal jurisdiction over him. 

[11. Analysis 

A. Legal Standards for Prelimina,y Injunction 

Before granting a preliminary injunction under Section l 3(b) of the FTC Act, 15 U.S.C. 

§ 53(b), a court must (1) consider the likelihood that the FTC will succeed on the merits of the 

case, and (2) weigh the appropriate equities. AmeriDebt, 373 F. Supp. 2d at 563 (citing FTC v. 

Food Town Stores, Inc., 539 F.2d 1339, 1343 (4th Cir. 1976)). The FTC does not need to 

demonstrate the likelihood of irreparable harm in order to obtain a preliminary injunction. Because 

its Motion is brought pursuant to a statute that authorizes injunctive relief, irreparable harm is 

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presumed. See FTC v. Consumer Defense, LLC, 926 F.3d 1208, 1212- 13 (9th Cir. 20 19) (citing 

FTC v. World Wide Factors, Ltd. , 882 F.2d 344, 34μ7 (9th Cir. 1989)). 

At the preliminary injunction stage, the FTC demonstrates the likelihood of success on the 

merits if it "'shows preliminarily, by affidavits or other proof, that it has a fair and tenable chance 

of ultimate success on the merits."' AmeriDebt, 373 F. Supp. 2d at 563 (quoting F. TC v. Beatrice 

Foods Co. , 587 F.2d 1225, 1229 (D.C. Cir. 1978)). 

In balancing the public and private equities associated with deciding to impose a 

preliminary injunction, the public interest is given greater weight. See id. at 564 (citing FTC 

v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1030 (7th Cir. 1988)). Indeed, the Fourth 

Circuit has suggested that any potential private injuries that may be caused by granting a motion 

for preliminary injunction "are not proper considerations for granting or withholding injunctive 

relief under Section 13(b)." See id. (citing Food Town Stores, 539 F.2d at 1346). 

B. Legal Standards for Liability on FTC 's Claims against Defendants 

i. Liability for Violations of FTC Act 

Section 5 of the FTC Act bars "unfair or deceptive acts or practices in or affecting 

commerce." 15 U.S.C. § 45(a). An individual may be found liable under Section 5 if it or he 

(1) participated directly in the deceptive practices or had authority to 

control those practices. and (2) had or should have had knowledge of the 

deceptive practices. The second prong of the analysis may be established 

by showing that the individual had actual knowledge of the deceptive 

conduct, was recklessly indifferent to its deceptiveness, or had an 

awareness of a high probability of deceptiveness and intentionally avoided 

learning the truth. 

FTC v. Ross, 743 F.3d 886,892 (4th Cir. 2014). 

As to the second prong, "the degree of participation in business affairs is probative of 

knowledge." F. T. C v. Innovative Mktg. , Inc., 654 F. Supp. 2d 378, 387 (D. Md. 2009) (quoting 

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F. T. C. v. Amy Travel Serv., Inc., 875 F.2d 564, 574 (7th Cir. 1989)) (internal quotation marks 

omitted). 

11. Liability for Violations of Telemarketing Sales Rule 

In addition to claiming that all the SBE Defendants violated the FTC Act, the agency also 

alleges that they violated the Telemarketing Sales Rule ("TSR"), which prohibits deceptive 

telemarketing acts or practices. 16 C.F.R. § 310.3. Among other prohibitions, the TSR forbids 

sellers and telemarketers from misrepresenting, directly or by implication, " [a]ny material aspect 

of the performance, efficacy, nature, or central characteristics of goods or services that are the 

subject of a sales offer," or " [a]ny material aspect of an investment opporturlity including, but not 

limited to, risk, liquidity, earnings potential, or profitability." Id. at§§ 310.3(a)(2)(iii), (vi). 

The TSR also provides that any person, defined as "any individual, group, or 

unincorporated association, limited or general partnership, corporation, or other business entity," 

16 C.F.R. § 310.2(y), who "provide[s] substantial assistance or support to any seller or 

telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer 

is engaged in any act or practice that violates §§ 310.3(a), ( c) or (d), or § 310.4" of the TSR has 

committed a "deceptive telemarketing act or practice" and violated the Rule itself or himself. 16 

C.F.R. § 310.3(b ). The standard for individual liability under the TSR is the same as the standard 

for individual liability under the FTC Act. See 15 U.S.C. § 57a(d)(3); see also. , FTC v. WV 

Universal Mgmt. , LLC, 877 F .3d 1234, 1240 (11th Cir. 2017) (holding that "by violating the TSR, 

[the defendant] violated the FTC Act and is subject to its penalties."). 

111. Liability as a Common Enterprise 

The FTC has alleged that all Defendants, save for AIBL, operated as a common enterprise 

under the umbrella of "Sanctuary Belize Enterprise" ("SBE"). " [W]here corporate entities operate 

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together as a common enterprise, each may be held liable for the deceptive acts and practices of 

the others." FTC v. Grant Connect. LLC, 763 F.3d 1094, 1105 (9th Cir. 2014); see also Rowe v. 

Brooks, 329 F.2d 35, 39-40 ( 4th Cir. 1964) (noting that joint ventures operate like a partnership, 

wherein partners have joint and several liability for losses incurred in furtherance of common 

enterprise). To determine whether a group of defendants operated as a common enterprise, courts 

" look to a variety of factors, including: common control, the sharing of office space and officers, 

whether business is transacted through a maze of interrelated companies, the commingling of 

corporate funds and failure to maintain separation of companies, unified advertising, and evidence 

which reveals that no real distinction existed between the Co.rporate Defendants." CFTC v. Noble 

Wealth Data Info. Servs. Inc. , 90 F. Supp. 2d 676, 691 (D. Md. 2000) (quoting FTC v. Wolf, No. 

94-5119, 1996 WL 812940, *7 (S.D. Fla. Jan. 31, 1996) (citations omitted). FTC Act liability for 

members of a common enterprise is joint and several. See, e.g., FTC v. Pointbreak Media, LLC, 

No. 18-61017-CIV, 2019 WL 1650101 , *6 (S.D. Fla. Apr. 4, 2019). 

1v. Liability for Monetary Relief under the FTC Act 

Once the FTC establishes an enterprise's liability for misrepresentations to consumers 

pursuant to Section 5 of the FTC Act, the enterprise is liable for restitution if the FTC shows 

consumer reliance. " [C]onsumer reliance on express misrepresentations" is "presumptively 

reasonable." F. T C. v. Five-Star Auto Club, 97 F. Supp. 2d 502,528 (S.D.N.Y. 2000). Reliance is 

presumed if"(l) the business entity made material misrepresentations likely to deceive consumers, 

(2) those misrepresentations were widely disseminated, and (3) consumers purchased the entity's 

products." FTC v. Loma Int'/ Bus. Grp. Inc., No. l l-cv-1483, 2013 WL 2455986, at *7 (D. Md. 

June 5, 2013). As to all the misrepresentations the Court now discusses, there is firm evidence that 

they were widely disseminated and material, and that many consumers purchased the lots. 

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C. Likelihood of Success on the Merits e,f the FTC's Alleged Six Core Deceptive Marketing 

Practice Claims 

The FTC submits that it has presented ample evidence that it is likely to succeed on the 

merits of its FTC Act and its TSR claims against the SBE Defendants, which is to say that it has a 

fair and tenable chance of succeeding. The Defendants who have challenged the entry of the 

preliminary injunction, namely Pukke and Baker, disagree. For the reasons that follow, the Court 

finds that the FTC has met its burden of showing it has a fair and tenable chance of success on the 

merits as to the FTC Act claims. 

14 

The Court considers first the facts that tend to show that SBE misled consumers with 

respect to each of the six Core Claims the FTC raises, as well as the overarching falsehood that 

Pukke was not continuously involved as a controlling operative in the venture. 

1. "No Debt" = No Risk 

The evidence shows that SBE sales representatives told consumers that Sanctuary Belize 

had or would have no debt and was therefore a particularly safe investment. PX 814 ,r 27. They 

told consumers, repeatedly during telemarketing calls and face-to-face. PX 254 ,r,r 12-1 4, 16; PX 

196 ,r 11 ; PX 204 ,J 3 Att. 3 at 6; PX 207 ,r 4 Att. 2; PX 203 ,r 15; that their so-called "no debt" 

model was a safer and more reliable way to complete the development than using lender financing. 

PX 814 ,J 27; PX 254 ,J 1 0; PX 198 ,i,r 6, 36; PX 186 ,r 6; PX 187 ,i 2; PX 181 iii! 6, 13; PX 202 ,r,i 

5, 12; PX 193 ,r 23; PX 191 123; PX 188 iii! 7, 18; PX 184 115, 15; PX 194 113, 20; PX 195 ,i,i 

3, 19; PX 182 ,i 20; PX 183 ,r 20; PX 196 1 11 ; PX 255. SBE telemarketers explained to consumers 

that the no-debt model made the development a safe investment because there was no risk of, for 

14 As indicated in Section II I.D, iefra, the Court defers making any finding as to the alleged TSR violations at this 

time. 

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instance, bankruptcy or foreclosure by a lender, such that there was ''absolutely no way" for 

consumers to lose their money. PX 297 ~ 45; PX 335 at 28:9- 29:8. 

The evidence strongly suggests those representations were and are false. The FTC's expert 

Richard Peiser, the Michael D. Spear Professor of Real Estate Development at the Harvard 

University Graduate School of Design, 

15 testified that, quite to the contrary, the absence of 

conventional lender financing creates a substantial risk in the development of a planned 

community, Pl Hrg Tr. 55, 3/12/19 am. This is so for two main reasons. First, it is normally "hard 

or impossible" to have sufficient front-end cash and sustained cash flow thereafter sufficient to 

fund infrastructure, construction, and operation of large-scale amenities until such time as the 

amenities have attained a positive cash flow without outside financing. PX 1 ~~ 20, 41-42. In 

consequence, consumers face risks from unpredictable lot sales, erratic cash flow, the pace of home 

construction, possible delay of projects that require large up-front cash expenditures, and a possible 

downward spiral in which delays in development further depress cash flow. PX 1 at 1; Pl Hrg Tr., 

3/12/1 9 Morning, 55:21- 24. The suggestion, of course, is that this is precisely what happened with 

Sanctuary Belize. 

Second, traditional lenders who finance real estate developments actually provide greater 

security for consumers because they typically undertake underwriting, due diligence, and 

continuing monitoring functions that reduce the risks for the consumer. PX 1 ~ 28; Pl Hrg Tr., 

3/1 2/1 9 Morning, 58:13- 60:25. Legitimate developers rarely, if ever, employ a "no debt" real 

estate development model simply because it has such a high risk of failure (in Professor Peiser's 

15 Given Professor Peiser's credentials and extensive experience studying and developing planned communities, the 

Court found him to be a particularly persuasive witness. 

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research and estimation, upwards of 90%). PX 1 1 42; PI Hrg Tr., 3/12/ 19 Morning, 57:7-15. In 

the present case, Professor Peiser concluded, the "absence of fmancing suggests it was unavailable 

rather than undesired." PX 1 1 29. 

Even allowing that some SBE principals, untested in the world of real estate development, 

may not have understood that the no-debt model was and is in fact risky, they were arguably 

recklessly indifferent to their deceptions or had an awareness of the high probability of their 

deceptions and intentionally avoided learning the truth. For the glaring fact was and is that, 

historically, SBE has actually had to incur debt. It borrowed $4,635,500 from Newport Beach 

yacht dealer Gordon Barienbrock, PX 816 at 7 (Receiver documenting loan), $2.5 million from 

Orange County real estate investors Cleo and Violet Mathis through their entity, CVM 

Corporation, PX 816 at 7 (Receiver documenting loan), and probably more than $1 million from 

a known Pukke associate, Patrick Callahan, PX 816 at 7 (Receiver discussing likely "loan" ). The 

existence of these debts fortifies the FTC's fair and tenable chance of proving the falsity of SBE's 

"no debt" claim, even in the face of SBE's questionable claim that "no-debt" only meant that the 

Reserve was not subject to risks from creditors calling in their debts, which in and of itself is a 

misleading statement. Since there were creditors, they would most certainly have been at some 

time or another quite able to call in their loan. 

The Court finds these apparent false claims were material to many consumers who chose 

to invest in Sanctuary Belize. See, e.g. , PI Hrg Tr., 3/11/19 Morning, 49- 50 (Sanctuary Belize lot 

purchaser Michael Doran testifying that SBE's "no debt" financing model and purported lower 

risk were "significant" in convincing him and his wife to purchase a lot because "we obviously 

want to do something where it incurred the least amount of risk possible for us"); see also PI Hrg 

Tr., 3/1 l/l 9 Afternoon, 83: 19- 84:20 (testimony of Sanctuary Belize lot purchaser Michael 

22 
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Warren); PI Hrg Tr., 3/19/ 19 Afternoon, 71:8- 14 (testimony of Sanctuary Belize lot purchaser 

Nancy Cunningham). The FTC has a fair and tenable chance of prevailing on this claim. 

11. Every Dollar of Revenue Reinvested in Development 

SBE telemarketers and principals also told conswners that because of their "no debt" 

model, every dollar the developer collected from sales lots would go back into the development. 

See PX 254 ~1 20- 24 (compiling evidence from seventeen sources showing that SBE made this 

claim in consumer declarations, telemarketer declarations, SBE scripts, webinars, emails, and 

other SBE marketing communications). PX 198 1 6, 36; PX 186 1 6, 26: PX 187 1 2; PX 181 1 6, 

14; PX 202 1 5, 13; PX 193 ~ 23; PX 191 1 23; PX 188 ~ 18; PX 184 1 15; PX 194 1 20; PX 195 

1 19; PX 182 1 20; PX 183 1 20; PX 205 1 4, 16; PX 203 1 15; PX 295 at 1; PX 310 at 27:22- 28:3. 

SBE's telemarketers represented that this purported aspect of the development also made 

investment in the Reserve less risky. PX 205 1 16. 

The evidence firmly suggests that those claims were and are also false. The Receiver has 

confirmed in reports to the Court that SBE used only 14% of consumers' money to cover 

construction costs while, along the way, always behind-the-curtains, Pukke appears to have 

diverted about 12.8% of that money, some $18 million, for his own benefit. See ECF Nos. 219, 

513 (Receiver's Reports). Beyond normal costs spent on developer salaries and marketing, both 

Professor Peiser and Pukke's own expert, Eric Sussman, 

16 testified that the percentage of revenue 

that should go into development should be more than 30%. Professor Peiser testified that 70-80% 

of hard costs should be spent on development. PI Hrg Tr., 3/12/19 Afternoon, 77:14-79:19. Mr. 

Sussman testified that spending 30% of costs outside of SG&A (i.e., costs being put into the 

16 The Court found this part of Mr. Sussman 's testimony to be especially persuasive. 

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development of the property) would slrike him as a low percentage for the SBE project. Pl Hrg 

Tr., 3/22/ 19 Morning, 77:7- 79:22. But again, the percentage of revenue that went into 

development at SBE was 14%, far below the levels recommended by either of the experts. 

Baker has admitted that SBE diverted funds to pay for his personal living expenses 

unrelated to the development. PI Hrg Tr., 3/15/19 Morning, 7:18-10:15. Costanzo has confirmed 

that, while working for SBE, he had reason to believe that Pukke was diverting funds to his own 

use and that significant sums of money received from lot sales were not being passed on to the 

development, even while consumers continued to be told that every dollar the developer collected 

from lot sales was going back into development. PX 81411 32-33. SBE also apparently transferred 

$4 million to John Vipulis, a Relief Defendant. PX 250 1 8(r); PX 816 at 6. 17 

The record also shows that, in a series of transactions between 2011 and 2015, Relief 

Defendant Chittenden (Pukke's putative wife and mother of two of his children), and one of the 

companies she controlled, "Beach Bunny Holdings," sent and received hundreds of thousands of 

dollars to and from bank accounts in the name of Defendant GPA. PX 2501 8(c)-(d). Banking 

records also show that between 2012 and 2015, Chittenden received $402,500.00 in her personal 

account from GP A. PX 816 at 11 , Ex. 9. Chittenden also held nearly $2 million in investments, in 

various companies, that were funded by entities currently under the control of the Receiver. Id. at 

11. Chittenden has indicated she had little or no knowledge of these transactions and has stated 

that, apparently in most instances, her signature was forged. It is a fair inference that Pukke, or 

someone acting on his behalf, was very likely the hand behind most if not all of the Chittenden 

transactions. 

17 Yipulis, as indicated, has settled his case with the FTC and has paid the funds to the Receiver. See infra n. 2. 

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In two series of transactions, the first completed between July 2012 and March 2014 and 

the second between May 2014 and March 2018, nearly $700,000 in accounts in the name of 

Defendants GPA, FDM, and Eco Futures Development were transferred to accounts controlled by 

the Estate of John Pukke, Andris Pukke's father. PX 250 ,r 8(e)-(f). The Estate of John Puk.ke then 

transferred the money from SBE consumers to various Pukke family members and associates. PX 

250 ,r 8(v)-(w); PX 48 at 9, 15, 39, 67, PX 250 ,r 8(m), 8(z). Were this not enough, the evidence 

also shows that SBE funded renovations to Andris Puk.ke's personal residence in California, 

including payments made to a local contractor whose invoices contained a memo line referencing 

Pukke's California address. PX 250 ,r 8(dd); PX 254 ,r 74; PX 816 at 6; PX 208 ,r 8. Other SBE 

funds went to various expenses that obviously had nothing at all to do with completing the 

Sanctuary Belize development, including $6,000 for Stanley Cup professional hockey tickets, 

$1,400 for tickets to an Eagles concert, and $1 ,200 for tickets to the "Triple Ho Show" music 

festival, as well as payments to cosmetic dentists whose offices were located near Newport Beach, 

California. PX 250 ,r 9: PX 251; PX 250 ,r 8(i); PX 254 ,r 102; PX 290; PX 29 1. The list goes on. 

The evidence also shows that Pukke, Baker, Greenfield, and Kazazi all had Sanctuary Belize debit 

cards they used for groceries, gas, restaurants, personal travel, and cash withdrawals. PX 208 ,r 8. 

The claims that every dollar from sales would go back into development, incontrovertibly 

false, were material to at least some consumers. See, e.g. , PI Hrg Tr., 3/1 1 /19 Morning, 59:9- 19; 

Pf Hrg Tr., 3/ 11 /19 Afternoon, 99: 12-18; PI Hrg Tr., 3/1 9/19 Afternoon, 70:24-71 :5. 

The FTC has a fair and tenable chance of prevailing on this claim. 

111. 2-5 Year Completion Timeline 

During consumer tours in Belize as early as 2008, SBE employees, including Chadwick 

and Usher, promised consumers that the Sanctuary Belize development would be completed within 

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a specific time frame: within two years, sometimes within five years. PX 182 ,i 18 ( on a tour in 

2013, Chadwick promised "within two years"); PX 195 ,i,i 7- 10 ( on a tour in 2008, Usher promised 

"within two years"); PX 197 ,i 6 (SBE representatives promised completion within five years). 

Indeed, many consumers who returned to Sanctuary Belize after buying plots and who expressed 

concern about the progress of the development "would frequently state that their sales person had 

told them the entire development would be complete within two to five years." PX 814 ,i 39. 

Beginning at least in 2006, SBE provided timelines for completion to consumers of about two to 

five years. PX 396; PX 397; PX 398. PX 205 ,i 17. PX 814 ,i 38. That claim was also important to 

several consumers and influenced their decisions to purchase. See, e.g. , PI Hrg Tr., 3/11/19 

Afternoon, 84:21- 85:6; PI Hrg Tr., 3/11/19 Afternoon, 99: 19- 100: 15; PX 196 ,i 40, Att. 21 at 10. 

Most definitely, Sanctuary Belize was not finished within two to five years, and it is 

undisputed that, as of the present, August 2019, more than thirteen years after the first sale 

occurred, the development is not complete. PX 297 ,i 72; PX 363; PX 254 ,i 79; PX 181 ,i 1 0; PX 

195 iii! 21 , 29; PX 188 iii! 22, 25, 43-45; PX 200 iii! 30-32; PX 196 iii! 48; PX 184 ii 33. To date, 

less than ten percent of lot sales have led to completed homes, and several promised amenities are 

either incomplete, have never been started, or have been totally abandoned. Compare PX 816 at 

21 (identifying 1,314 lots sold beginning in 2009) with PX 223 iii! 8- 11 ( considerably fewer than 

100 completed homes based on pre-filing analysis); ECF No. 347-2 (Mar. 22, 2019) at 1 (proposed 

intervenors' filing claiming there are "over 40 completed homes" and "40 in various stages of 

construction"); DX-AP-01 at 5 (claiming "over 50" homes). It is true that some amenities have 

been built, including a restaurant, a sundry store, a gas station, a pool, and two bars. PI Hrg Tr., 

3/1 5/19 Afternoon, 86:22- 87: 11 (listing amenities that had been constructed at Sanctuary Belize); 

Sussman Expert Report, DX AP 1 at 3-4. But, other promised amenities, e.g. the American-style 

26 
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hospital or clinic, golf course, and nearby airport appeared to have been abandoned altogether, 

essentially without any explanation to the consumers who were originally promised them. 

At the Preliminary Injunction hearing, the parties offered competing projections as to the 

extent of the resources that would be needed to complete the development. Professor Peiser, the 

FTC's expert, estimated that to complete the community as promised (including the hospital, hotel, 

and commercial center) would cost $613 million, and that even to complete the development with 

amenities of a caliber below what was promised would cost $248 million. PX 1 at 1; PI Hrg Tr., 

3/12/ 19 Morning, 64. Erik Lioy, a partner at the accounting firm Grant Thornton, LLP, the FTC's 

other expert witness at the March hearing, estimated that, at most in the next five years, SBE could 

only afford to spend $87.9 million on development. 18 SBE, on the other hand, claimed that it 

"absolutely" had and has the resources to finish the development. PX 297 ~ 24; PX 310 at 26: 18-

27:3. Indeed, Anthony Mock, a builder who often works on the Reserve, estimated that the 

development could be completed within the next five years at a cost of $32-40 million. PI Hrg Tr., 

3/15/ 19 Afternoon, 94:4-19; 22-24. By "completed," Mock said he meant finishing infrastructure 

such as roads, electricity, and canals, and completing buildings for stores in the commercial area, 

a marina restaurant and lounge, a gym, a spa, parking, and wastewater treatment facilities. Id. He 

did not, however, suggest that the whole promised package could be completed in that cost frame. 

18 Lioy indulged generous assumptions in reaching an initial estimate of$ I 16 million, including, for instance, that the 

revenue from SBE's average lot sales for its best sales years would continue over the next five years, and that about 

$25 million SBE transferred to Belizean accounts over the past seven years would remain available to spend. After 

considering the Receiver's report, Lioy revised his opinion, particularly in view of the new information about what 

actually happened to the $25 million in deposits, which demonstrated a far lower percentage of funds that SBE had in 

fact historically spent on development. Lioy's modified opinion was that SBE could spend between $ 18.5 and $87.9 

million, toward the low end if historic levels of spending went toward deve lopment, and the high end if a higher 

percentage of sales revenue were spent on development. PX 875. 

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At this stage, the Court is not required to make a finding as to how much money, more or 

less, it might take to "complete" the Sanctuary Belize development. Whatever amenities might be 

counted in order to complete the development and whatever their likely cost would not change the 

fact that SBE Defendants over a period of some 12 years, appear to have falsely promised that 

construction would be accomplished in two to five years. The FTC has shown a fair and tenable 

chance it will succeed on the merits of showing the falsehood of this claim. 

IV. Development of Luxurious Amenities 

SBE repeatedly told consumers that the completed development would boast extraordinary 

amenities comparable to those of a small American city, including infrastructure roughly 

equivalent to what consumers would expect in the United States. PX 254 ,r,r 30-54, 83; PX 196 ,rr 

11:7, 25; PX 200 , 34; PX 198 ,,r 17, 34; PX 307 at 22:6- 21, 27:5-13 , 27:25-28:17, 42:17- 19; 

PX 324 at 44: 13-46:23, 35:8-24; PX 181 ,r 19; PX 183, 23. Amenities such as these were central 

to SBE's claims that the lots' value would skyrocket. PX 188 ,r 21; PX 203 ,r 12; PX 297 ,r 23, Att. 

10 at 59: 12-60:7. Costanzo testified that SBE's sales and video presentations showed consumers 

that Sanctuary Belize's amenities would include numerous shops, restaurants, condominiums, 

entertainment venues, and a hotel, as well as an American-style supermarket and American-quality 

hospital. 19 PX 814 ,r 34. Since 2008, SBE has signaled no caveats or disclaimers suggesting some 

amenities might not be built. See, e.g., PX 198 at Att. 3 (Sanctuary Belize "Vision Book"); PX 254 

19 As to the American-quality hospital. See, e.g., PX 814 136; PX 181 24; Pl Hrg Tr., 3/11 / 19 Morning. 85:2-17; 

DX-AP-344. Pukke 's attorneys argued at the Preliminary lnjunction hearing that a reasonable consumer would 

understand that a hospital would have to be approved by the Belizean Government, perhaps with the support ofSBE, 

and that to the extent that Government approval might not have been forthcoming, SBE should not be faulted. 

Regardless, consumers at some point or points were still promised at least an onsite medical clinic, which has never 

been completed, if not altogether abandoned. PX 254 8 1. Professor Peiser testified that building an American-quality 

medical facility in remote Southern Belize would not be economically feasib le in any case. PX I 11 7 1, 282- 325. 

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,i,i 85- 89; PX 277 at 12, 15- 16; PX 198 ,i,i 7:4 at 39, 7:3 at 20, 55, 82, 84, 89, 95, 97; PX 205 ,i 

17:15; PX 186 Att. 3 at 00:53:55-00:54:00, 1:23:05-1:23:30; PX 188 1 21; PX 205117; PX 203 

1 10; PX 184 ,i 6; PX 186 ' 9; PX 204 ,i 3:3 at 5; PX 194 1 4; PX 195 1 4; PX 278. PX 297 1 45; 

PX 335 at 28:9- 29:8 (empltasis added). Specifically, the promised hospital and/or medical clinic 

have not been built. PX 25 ~ 1 81. Nor has any hotel, let alone smaller lodges or "eco-experience 

hotels" that SBE marketed heen built. PX 254187; PX 277 at 15- 16; PX 19817:3 at 20, 55, 82, 

84, 89, 95, 97; PX 205 1 1',':15. PX 254 1 81. 

SBE also promised consumers entertainment features, including an 18-hole golf course. 

Specifically, SBE told FTC professionals posing as consumers that the golf course was "under 

construction ... about 15 minutes away." PX 297 1 23; PX 307 at 34: 15- 2 l. No golf course has 

been built at Sanctuary Belize, PX 254 1 81, although early SBE marketing materials claimed that 

by 2008 the development would have a golf course. PX 396; PX 624. 

Other promised amenities, yet to materialize, have included an international airport and an 

on-site airstrip. PX 25411 43~5, 86; PX 184 11 7, 12; PX 181 1 22; PX 18811 6:2 at 1, 21- 22; 

PX 193127; PX 191 11 24, 26; PX 198 ,i 18; PX 186 '! 9; PX 277 at 12; PX 203 ,i 12; PX 205 ,i1 

17:14 at 4. PI Hrg Tr., 3/ 11/ 19 Morning, 53- 54 (lot purchaser testifying that SBE representatives 

claimed that a private airstrip was being built). There is, however, no airstrip for private aviation 

within the development. PX 254 1 81. Although construction at one point started on nearby 

Placencia International Airport, it was never completed. PX 203 1 7. Nevertheless, years after 

construction had stopped, SBE appears to have held out that the airport would be completed 

imminently. PX 188 122; PX 181 1 22. 

SBE has also promoted "Marina Village" as the development's commercial center, 

including boutique shops, restaurants, cafes, and an American-style grocery store. See, e.g. , PI Hrg 

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Tr., 3/11/19 Morning, 51 (lot purchaser testifying that SBE marketed a promised Marina Village); 

PX 277 at 15- 16; PX 183 at 62; PX 817 at 58. PX 188 11 23-24; PX 254 11 46-49; PX 182, Att. 

l ; PX 183 11 3, 4 Atts. 1, 2; PX 186 11 11, 12 and Atts. 5, 6; PX 194 117, 11- 14; PX 195 11 7-

12 and Atts. 3, 4; PX 196 1 14. SBE has also claimed that other community institutions would be 

featured in Marina Village, such as a church, a school, and a post office. PX 205 1 17; PX 198 1 

7, Att. 3 at 55. 

From the beginning Marina Village has consistently been highlighted as a prime selling 

point to consumers, never accompanied by caveats, disclaimers, or other indications that 

completion of the amenity was uncertain, never with a suggestion that a complete Village was 

merely an "aspiration." See, e.g. , PX 277. As of today, however, years down the road, there is no 

"Marina Village" nor is there a downtown commercial core with the promised commercial space 

housing cafes, bistros, upscale restaurants, boutiques and high-end shopping, a gym, and spa. PX 

254 11 81 , 89; PX 277. 

Another marketing promise dwelt upon extensively at the Preliminary Injunction hearing 

was that SBE would provide a 250-slip "world class" marina. See PX 254 11 50- 53; PX 196 1 14; 

PX 198 17; PX 184 1 6; PX 20311 O; PX 204 1 3 :3 at 17; PX 2051117: 14 at 6, 17: 15 at 1-2; PX 

257 at 9- 10; PX 307 at 13:2- 7, 59:22-60:7; PX 186 19; PX 191 11 1-10 and Att. 2; PX 20311 

7- 10; PX 653; PX 752110; PX 78818; Pl Hrg Tr., 3/ 11/19 Morning, 51 (lot purchaser testifying 

that SBE representatives had advertised that Sanctuary Belize would include a deep water marina); 

PX 183 at 60; PX 817 at 54. PX 297123; PX 307 at 13 :5-6. PX 254 ~ 88; PX 205 ~ 17; PX 203 

1 10; PX 184 ~ 6; PX 198 1 7, Att. 4 at 39, ~ 15; PX 18619; PX 204 ~ 3, Att. 3 at 5. A "world 

class" marina is one that qualifies for the prestigious Five Gold Anchor certification that The Yacht 

Harbor Association issues to the world's top marinas. PX 210 ~ 41 ; PX 211 1 26; PI Hrg Tr., 

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3/22/19 Afternoon, 56: 13- 18. Although there is some dispute about how many boats the current 

marina at SBE can presently accommodate, the Court at this stage need only note that it is well 

short of the 250 slips promised. A Vice-President from IGY, the luxury yacht and marina firm, 

testified that to "get the marina to 250 slips you would need to triple the size of the existing 

marina," which would cost a significant amount of money. PX 210 1 40; PI Hrg Tr., 3/22/19 

Afternoon, 61: 17-62: 1. Apart from that, the current structure lacks many features it would need to 

qualify as "world-class," including but not limited to a boat yard or other repair or maintenance 

facility, a boat dealership, physical security (other than a guard at the main entrance to the 

development), and high-end marina-related buildings. PX 21 1 125; PX 210140. 

Given SBE's aggressive marketing of all these deluxe amenities to potential lot purchasers 

over the years and given the considerably less than promised number of features constructed to 

date, it is clear that the FTC has shown a fair and tenable chance of proving at the merits stage that 

these material representations violated Section 5 of the FTC Act. 

v. Appreciation in Value 

During the tours in Belize, SBE employees would often stress the value of purchasing two 

lots so that consumers could use the rapid appreciation of the first to make money to pay for the 

construction of their dream home on the second. PX 188 121 (as to two condominiums); PX 297 

1 122. PX 186 1 4; PX 184 1 14. PX 814 1 41. For many customers, SBE's claims about lot 

appreciation were central to its marketing scheme. For instance, an SBE telemarketer told FTC 

professionals posing as prospective purchasers that, because of the airport, marina, and other 

amenities, they could expect "around a 300 to 500 percent increase, in three years." PX 297123; 

PX 307 at 59: 12- 18. A different SBE telemarketer told undercover FTC investigators "they're 

[projecting] 250 to 300 percent [appreciation] in the next few years." PX 297 1 20; PX 303 at 

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54:21- 55:1. As late as June 2018, SBE posted marketing material online claiming 400% returns. 

PX 3 ~~ 67-68; PX 155 at 1. 

In fact, lots at the Reserve have never begun to appreciate anywhere near as promised, and 

there was never any basis- none-for SBE to have claimed this. See, e.g., PX 204 ~ 4, Att. 4 at 

27 (SBE employee Charmaine Voss admitted in a text message to an SBE telemarketer that "the 

claim that the property value will increase by 400% after the airport is built" is "a bunch of horse 

shit"). 

The FTC has shown that it has a fair and tenable chance of prevailing on this claim. 

v1. Robust Resale Market 

The fact that a substantial number of lot owners have tried to force SBE to buy back their 

lots and/or have engaged in extensive litigation in the United States and abroad reflects, contrary 

to SBE's representations, that there have been few opportunities for dissatisfied owners to sell 

their lots at a profit. PX 297 ~ 178; PX 466 (most buybacks do not even provide full refunds); PX 

184 ~ 64, Att. 66; PI Hrg Tr., 3/19/19 Afternoon, 78- 81. In one instance, consumers who purchased 

a lot for $119,900 and paid various taxes and HOA fees in the intervening decade agreed to sell 

their lot for $124,000 on unfavorable terms, including apparently that they finance the sale 

themselves, because that was the only way to close the sale. PX 194 ~ 61 ; PI Hrg Tr., 3/19/1 9 

Afternoon, 78-81. SBE representatives have known that their claims about lot appreciation were 

false. 

ln fact, according to record evidence, SBE is alleged to have chilled resale efforts of 

owners. Some consumers have complained that SBE pushed them to engage Coldwell Banker SB 

as their sales agent, but said that the company did not evidence a sincere attempt to resell the lots. 

PX 186 ~ 68; PX 297 ~ 139; PX 419. Allegedly, some SBE employees or others acting on their 

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behalf even tore down "for sale" signs that owners bad put up on their properties and prevented or 

severely limited prospective purchasers from entering the property to view lots owners wanted to 

resell independently. PX 197 1 27; PX 194 1 58; PX 202 ~ 71 , Att. 29. 

Bottom line: the FTC has a fair and tenable chance of prevailing on this claim. 

v11. Liability for Misrepresentations of Core Marketing Claims 

Just one widespread material representation, which consumers who purchased lots may be 

presumed to have relied upon, would establish liability under Section 5 of the FTC Act. But, as 

just discussed, each Core Claim discussed so far would seem to involve one or more 

misrepresentations. At this stage of the proceedings, then, on the facts portrayed above, the Court 

is able to easily conclude that there is a fair and tenable chance the FTC will be able to prove that 

each core claim was and is false. The Court finds that each of the "core claims" was material. Not 

only in many instances were they expressly made,20 several consumers expressly testified that the 

claims were important to their ultimate decisions to purchase lots. See Section III.C, i-vi, supra. 

D. Telemarketing Sales Rule (I'SR) 

Pukke's attorneys argue that SBE's activities qualify for the exemption to the TSR that 

excepts sales activity when payment by the consumer is not made until after a face-to-face sales 

presentation and sales are not completed until after a face-to-face sales presentation. The evidence 

from the hearing, they assert, shows that almost all purchasers did not pay a dime for their lots 

until after they had traveled to Belize and inspected them. The non-binding lot reservation fee, the 

20 See In re Thompson Medical Co .. Inc., I 04 F.T.C. 648, 8 16 ( 1984) ("Express claims, or deliberate ly-made implied 

claims, used to induce the purchase of a particular product or service are presumed to be material."), affd, 79 F.2d 

189 (D.C. Cir. 1986). 

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attorneys submit, does not alter the exempt nature of the conduct, because it was still not converted 

into a partial down payment until after the sale was complete. 

Baker does not address the Telemarketing Sales Rule in his Response in Opposition to the 

FTC's Motion for Preliminary Injunction, see generally ECF No. 216, in his Proposed Findings of 

Fact, see generally ECF No. 446, or in his Response to the FTC's Proposed Findings of Fact and 

Conclusions of Law, see generally ECF No. 470. 

The FTC, for its part, asserts, albeit without citation to authority, that TSR exemptions 

should be narrowly construed. See ECF No. 445 at~ 835.21 It points out that most customers paid 

SBE for the Belize tours in advance of their face-to-face visits but did so based on the 

telemarketing in the United States, not after face-to-face meetings. At the same time, says the FTC, 

as a result of the telemarketing, the prospective consumer was and is often given a right of first 

refusal on a lot. And additionally, some consumers who did not attend the tour in Belize bought 

their lots from the U.S. sight-unseen. 

At this stage, the Court believes it is unnecessary to make a finding as to whether 

Defendants are liable for violating the TSR, and it declines to do so. It suffices that Court is about 

to conclude that the FTC has met its burden sufficient to enter a Preliminary Injunction against 

Defendants as to their purported violations of Section 5 of the FTC Act. Whether it will be 

necessary to decide Defendants' liability vel non in regard to the TSR will be reconsidered at the 

time of the merits hearing. 

21 The FTC also points out that the FTC Act " is a remedial statute (that) ... should be construed broadly to effectuate 

its purposes." FTC v. AT&T Mobility llC, 883 F.3d 848, 854 (9th Cir. 2018) (quoting Tcherepnin v. Knight, 389 U.S. 

332, 336 ( 1967)). The corollary to this is that exemptions should be construed narrowly so the remedial effect of the 

statute can reach broadly. 

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E. Pukke 's Involvement and Liability 

The FTC alleges that at all times relevant Pukke (a) has controlled the operations of SBE, 

and (b) has directly participated in, directed, and/or had knowledge of the totality of deceptive 

conduct at issue in this case. 

As Baker testified, he and Pukke were the original partners in the Sanctuary Belize 

development when the developer was Dolphin Development, and they continued their partnership 

after Pukke's eventual settlement with the Receiver in tbeAmeriDebt litigation. PI Hrg Tr., 3/13/19 

Afternoon, 12:4-13:14; see also PX 358 (identifying original directors and owners of Dolphin); 

PX 370 (collecting early board of directors minutes for Dolphin, showing Pukk.e's control and 

presence); PI Hrg Tr., 3/13/19 Afternoon, 26: 18-27:6; id. at 10: 14- 20 (Baker testifying that Pukke 

was "my partner"); id. at 27:4 (Baker and Pukke entered into an "equal partnership"); id. at 43 :21-

24 ("How do I know [Pukke's] the partner? Per our agreement in 2009 where he became my 

partner"); id. at 45: 15- 20 ( describing Pukk.e as his "partner" in connection with Global Property 

Alliance, one of the SBE's marketing entities); see also id. at 27: 13- 18 ("[Pukke ]- per his 

suggestion and per his- I would say it was per his- his terms were that it would be considered as 

sweat equity, that his 30 percent would be considered sweat equity, and that I would hold his shares 

until such time that he-that the development was, call it, in profit phase."). PX 627; PX 203 18; 

PX205 19. 

And, from all appearances, Pukk.e in fact did control all aspects of SBE's operations, 

including communications with lot owners about corporate structure, legal affairs, lot ownership 

structure, dissolution of SBE-related entities, payments for equipment shipped to Belize, review 

of lot sale contracts, authorization of commissions for telemarketers, dealing with consumers who 

wanted to sell their lots, dealing with the taxes of SBE entities, and addressing HOA fee disputes. 

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Also: Pukke was involved in making design decisions, choosing office space, making rent 

payments, deciding raises for SBE employees, and reviewing architectural plans. PX 208 ,r,r 5- 8, 

13; PX 429-430; PX 435; PX 438-441 ; PX 451-454. 

The FTC claims that Pukke directed all financial and operational matters for the SBE 

Defendants while maintaining an ownership stake of at least 29% in the development. PX 816 

(Receiver's Report ECF No. 219, Exhibit A at pp. 3- 5). The FTC also claims that Pukke directed 

several individual Defendants to act on behalf of SBE, including Greenfield, Chadwick, and 

Kazazi. PX 203 ,r 8; PX 205 ,I 9; PX 297 ,I 157, Atts. 156-157; PX 442-443; PX 297 ,I 326, Att. 

349; PX 635; PX 210 ,r 4 ("Andy Storm," a/k/a Andris Pukke directed that marina management 

conversations should be with Kazazi). 

Although Pukke claims he has had "no role in control or ownership of the Parcel since 

2006 at the latest," Pukke's Findings of Fact, ECF No. 448 at ,r 100,

22 the FTC submits that 

powerful evidence belies this. Pukke, for instance, countermanded an attempt by John Usher to 

seize control of the Parcel in 2016, which clearly tends to show Pukke's continued control over 

the Reserve. PI Hrg. Tr., 3/1 3/19 Afternoon, 83:17-84:19 (describing meeting in 2016 in which 

Usher accused Pukke of taking $24 million out of the development); PI Hrg Tr., 3/13/19 Afternoon, 

85:4- 12 (Baker, on his and Pukke's behalf, travelled to Belize to confront Usher when Usher 

attempted to wrest total control); PX 836 (email in which Baker recounts his confrontation with 

22 Before referring to what Puk.ke himself "says" about these allegations, it should be noted that Pukke declined to 

testify at the Preliminary Lnjunction hearing, pleading the Fifth Amendment when called to testify (indeed having 

done the same on deposition and in declining to produce documents). This is a civil proceeding, which would permit 

adverse inferences as to most if not all the a llegations against Pukke. See Flame S.A. v. Freight Bulk Pte., ltd. , 807 

F.3d 572, 590 ( 4th Cir. 201 5) (citing Baxter v. Palmigiano, 425 U.S. 308, 3 18 ( 1976) (holding that, when defendants 

in a civil case invoke their Fifth Amendment right against self-incrimination, a court may draw "adverse inferences 

against parties to civil actions when they refuse to testify in response to probative evidence offered against them.")). 

Even so, for present purposes, the Court will consider the arguments made by Pukke's attorneys. 

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Usher, calling Usher a "thief," and prior email from Usher indicating that Pukke and Baker can 

run things in Belize directly moving forward); PI Hrg Tr., 3/13/19 Afternoon, 90: 13-91 :7 (Baker 

testifying that, fo llowing the dispute with Usher, he took a hands-on role in Belize); DX-AP-366 

(email exchange among Pukke, Usher, and Baker following the 2016 meeting regarding the plan 

moving forward, with Pukke and Baker directly controlling activities in Belize). 

In addition to maintaining control over the various SBE Defendants, Pukke is alleged to 

have been heavily involved in the marketing operations related to the Sanctuary Belize 

development. He provided input on sales presentations given by SBE telemarketers, participated 

in sales tours in Belize, and negotiated the terms of at least some sales contracts. DX-AP-324 

(email from Pukke to a sales manager attaching a sales script, with Pukke writing in the email: 

"Here it is with a few more tweaks."). Because Pukke personally directed the sales activities, he 

was almost certainly aware of the content of virtually all the marketing claims those sales activities 

promoted. 

Most notably: 

Clearly concerned about the effect of being publicly associated with the Sanctuary Belize 

development, given his prior criminally fraudulent behavior and expressions of concern by several 

prospective lot owners, Pukke was at pains to personally instruct SBE staff either to minimize or 

conceal his involvement with SBE. Brazenly- it is hard to find a gentler term- at different times 

he operated under the aliases "Andy Storm" and "Marc Romeo" when publicly acting for SBE. 

PX 203 ~ 8; PX 485; PX 196 ~~ 21-23; PX 207 ~ 6 Att. 4, 5; PX 210 ~ 4. For example, during faceto-face negotiations with a marina management company to discuss possible management of the 

marina being developed at Sanctuary Belize, Pukke was introduced as "Andy Storm." Sometime 

afterward, the marina management company's representatives who participated in that encounter 

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came to understand that "Andy Storm" was the CEO of SBE. See PI Hrg Tr., 3/22/1 9 Afternoon, 

72- 73; PX 21 0 1 4. Then, not without a small dash of drama, the representative of the marina 

management company testifying at the Preliminary Injunction hearing was asked if he could 

identify the individual who was sitting in the back of the courtroom, and the witness said that that 

individual was in fact the man he had been introduced to during the negotiations as "Andy Storm." 

See PI Hrg Tr., 3/22/19 Afternoon, 72:6-10. The Court took judicial notice of the fact that the 

individual was, indeed, Andris Pukke. 

During his participation in sales tours for potential Sanctuary Belize lot purchasers, Pukke 

would now and again identify himself as "Marc Romeo." PX 20716, Atts. 4, 5; PX 196 ~~ 21-23 

and Att. 22; PX 207 ~ 5 and Att. 3 at 1; PX 205 ~ 5, Atts. 5- 8; PX 427 at 155- 156 (testimony by 

Jon Berndsen, a Sanctuary Belize lot purchaser who testified at Pukke's violation of supervised 

release hearing, United States v. Andris Pukke, Crim. No. PJM 10-734, on November 13, 2015 that 

"Marc Romeo was the person who was making the decision on what would be acceptable and 

what's not."); PX 196 ~~ 21- 23. 

Other Defendants helped facilitate Pukke's attempts to conceal his identity from 

consumers. For example, in November 2016, Pukke wrote to Costanzo (himself going by the name 

Frank Connelly on the email) about the importance of being "more careful" that "only my email 

shows up, not my name" on external communications. PX 833. Costanzo replied that he would be 

sure to "take exhaustive measures to create distance [because] careless error [in disclosing Pukke' s 

involvement] could be [a] major setback." Id. Baker, as will be discussed in more detail presently, 

was also aware of Pukke's use of aliases. 

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Pukke' s use of the aliases strongly indicates that be knew that disclosing bis involvement 

would deter buyers and, more to the point, that he knew he was engaged in highly questionable 

marketing tactics. No other deception in Pukke's apparent web of deceptions seems quite as raw. 

Pukke's attorneys may dispute the FTC's allegations that he was in control of various SBE 

Defendants or that he directed and participated in Sanctuary Belize marketing operations. But 

Baker tells another story. He testified that Pukke became CEO of Sanctuary Belize sales and 

marketing efforts in or about 2008 and remained in that role until the initiation of the present action 

by the FTC in 2018. Baker claims that Pukke controlled the marketing and sale of Sanctuary 

Belize lots to consumers, except for an interlude when Pukke was incarcerated for some eighteen 

months in connection with the criminal proceeding that grew out of the AmeriDebt fraud. 23 

23 In November 20 I 0, Puk.ke pied guilty to one count ofobstruction of j ustice for concealing from and maki ng false 

statements to the AmeriDebt Receiver concerning multiple assets that should have been turned over to the Receivership 

estate. See United States v. Andris Pukke, Crim. No. P JM- I 0-734, ECF No. 7 (Signed Plea Agreement). Assets that 

Pukke pied guilty to concealing from the AmeriDebt Receiver included interests in sports gambling websites, bank 

accounts in Latvia and Lichtenstein, real property in Laguna Beach, California, and interests in Dolphin 

Development- the original developer of Sanctuary Belize- and Sittee River Wildlife Reserve, a Defendant in the 

present action. See id. , ECF No. 7-1 at 1- 5. On May 16, 2011 , the Court sentenced Pukke to eighteen months 

imprisonment and three years of supervised release. See id. , ECF Nos. 14, 15. 

Pukke was released from custody on September 2 1, 2012. After his release, but while on supervised release, Pukke 

petitioned the Court several times for permission to travel to Belize. See id. at ECF Nos. 18, 22, 29, 33. While the 

Court granted one of Pukke's requests to travel to Belize on April I, 2013, see id. , ECF No. 27, it denied all other 

such requests. See id. , ECF Nos. 2 1, 32, 36. 

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During that interlude, Chadwick was said to be the one who controlled SBE's marketing 

and sales operations. Even so, Baker alleges that Puk:ke and Kazazi still controlled the flow of 

funds from the SBE Defendants based in California to Eco-Futures Belize, Ltd., the development 

entity based in Belize. PI Hrg. Tr., 3/13/19 Afternoon, 60:2-67:1 3, PI Hrg. Tr., 3/14/19 Morning, 

115:18- 24, 132:19- 24; PI Hrg. Tr., 3/15/19 Morning, 5:21-6:5, 6:1- 7:3; PI Hrg. Tr., 3/15/19 

Afternoon, 21:20-22:7; PI Hrg. Tr., 3/20/19 Afternoon, 72:8- 73:14, 75:12; PI Hrg. Tr., 3/21/19 

Morning, 52:1 1- 20, 79:3-6, 80:5- 13, 98:23- 99:2, 109:15-19, 125:24- 126:1- 16, 130: 18-1 31 :20; 

Baker Dep. Tr., 2/19/19, 102: 1- 17; 11 9:25- 120: 18. 

Given the extensive evidence of Pukke's control over SBE, his direction of its marketing 

strategies, and the deception he and others perpetrated on consumers, not least the concealment of 

his active involvement in the enterprise, the Court finds the FTC has demonstrated it has a fair and 

tenable chance that it will succeed on the merits of its claims as to Pukke. 

F. Baker's Involvement and Liability 

Baker has held numerous positions of control in several of the entities comprising SBE. 

From approximately 2003 through 2007, he owned Dolphin Development, LLC- the original 

After the Court denied Pukke's fourth request to travel to Belize, the U.S. Probation Office ("Probation") filed a 

petition asking the Court to find that Pukke had violated the tenns of his supervised release by failing to disclose his 

involvement with, among other entities, Sittee River Wildlife Reserve and Eco-Futures Development, both Defendants 

in the present case, and also for using the name "Marc Romeo" on corporate disclosure fonns related to those entities. 

See id. , ECF No. 38. Pukke countered by moving to dismiss Probation's petition. See id. , ECF No. 45. After a hearing 

on Pukke's violation on supervised release on November 13, 2015, see id. , ECF No. 47, the Court ordered Pukke to 

clarify (a) his use of the name "Marc Romeo" and (b) the extent to which he owned or controlled the various Belizean 

companies listed in Probation's petition. See id. , ECF No. 49. Pukke, through a letter to the Court prepared by counsel, 

admitted to identifying himself as "Marc Romeo ... during specific, isolated interactions with prospective lot owners 

before his period of supervised release" but denied that he owned or controlled any of the Belizean entities. See id., 

ECF No. 50. While the Court stated that it did "not necessarily accept counsel's representation that Mr. Pukke never 

used the name Marc Romeo during his supervised release," the Court concluded that "with respect to the specific 

alleged violation in the Petition, there [was] insufficient evidence to support the finding ofa violation." See id. , ECF 

No. 5 1. Accordingly, the Court tenninated supervised release as to Pukke on December 9, 20 15. See id. The Court's 

decision at the end of the proceeding may well have been ill-founded. Some of the allegations in the Petition on 

Supervised Release continue to resonate in the present litigation. 

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developer of the Sanctuary Belize community. Starting in 2003, he was an original Director on the 

Board of SRWR, eventually becoming Chairman in 2016. PX 358 (Baker as one of the original 

Directors of SRWR in 2003); PX 370 at 21 (Bak.er as Director in 2003 seconding Pukke to be 

SRWR Chairman); PX 568 (Baker as Director in 2004); PX 370 at 24 (Baker as Director in 2005); 

PX 192 ~ 3, Att. 24 (Baker as Chairman in 2016). As detailed in section I.A, supra, in 2008, Baker 

negotiated the agreement with the AmeriDebt Receiver to purchase the Belizean Parcel for SR WR, 

raising the $2 million purchase price from third party investor Steven Choi. ECF No. 446, 

Proposed Findings of Fact by Peter Baker ("Baker Findings of Fact") at~ 6. After purchasing the 

Parcel from the AmeriDebt Receiver, Baker turned his attention to developing the Sanctuary Belize 

community on the property. In 2009, he and Usher formed Eco-Futures Belize, Ltd. ("Eco-Futures 

(BZ)"), the Belizean corporation that would be responsible for developing Sanctuary Belize. ECF 

No. 216-1 ~ 2; Pl Hrg. Tr., 3/13/19 Afternoon, 8: 16-17, 30:20-24, 34:23-25; 36: 1- 23, 40: 19- 20, 

41 :16-23, 48:23-49:7, 121:21- 23; Pl Hrg. Tr., 3/14/19 Morning, 113: 19- 25; PI Hrg. Tr., 3/15/19 

Afternoon, 14:11- 16:7. 

Baker testified that a few months after obtaining control of the Reserve in 2008, he invited 

Pukke to assist with marketing the Sanctuary Belize development. In the summer of 2008, Baker 

and Pukke agreed that, in exchange for Pukke assuming control over the Sanctuary Belize 

marketing and sales operations, Pukke would receive up to 30% "sweat equity" in the companies 

comprising Sanctuary Belize. PI Hrg. Tr., 3/13/19 Afternoon, 30:25-3 1:1, 32:24-33:18, 51:2-

52:11; PI Hrg. Tr. 3/14/19 Morning, 122:7- 123:6; PI Hrg. Tr. 3/15/19 Morning, 4:12- 5:20. Baker 

contends that Pukke assured him that he- Pukke- had not been found liable in AmeriDebt and 

that in the settlement in that case he had admitted to no wrongdoing. PI Hrg. Tr., 3/14/19 Morning, 

121: 16- 19; Pl Hrg. Tr., 3/15/19 Morning, 4: 12- 5:20; PI Hrg. Tr., 3/15/19 Afternoon, 35: 11- 36:2; 

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Pl Hrg. Tr., 3/22/19 Morning, 145:17-21. Baker also claims that his own role in Sanctuary Belize 

was reduced significantly after the summer of 2008 when Pukke became involved with the 

development, and that his- Baker's-involvement was minimal from approximately 2008 until 

2016, when he became Chairman of the Board of SRWR. PI Hrg. Tr., 3/14/19 Morning, 124:22-

125:7; PI Hrg. Tr., 3/15/19 Morning, 57:1- 58:12; DX-AP-344; PI Hrg. Tr., 3/22/19 Morning, 

144:22- 25, 148:7- 11; PBX 18 (Second Declaration of Peter Baker) ,i 8, Ex. 2. During this time 

period, Baker claims to have been living and traveling back and forth between California and 

Latvia, visiting Belize only intermittently. Id. 

But other evidence shows that Baker appears to have been very much involved in the 

Sanctuary Belize marketing and sales operations during this time. In addition to testifying that he 

owned Defendant Eco-Futures (BZ), the development company, Baker has stated in an affidavit 

that throughout this time he also owned Global Property Alliance, Inc. ("GPA"), one of the SBE 

Defendants responsible for marketing and sales of Sanctuary Belize, even as he continues to assert 

that Pukke was responsible for those operations. ECF No. 216-1 ,i 2. Baker also held board 

positions at SBE Defendants Foundation Development Management, Inc. ("FDM") and Buy 

International, Inc. ("Buy international") and was the CEO and managing member of Buy Belize, 

LLC ("Buy Belize"). PX 541; PX 544; PX 688 (Baker listed as CEO of Buy International); PX 

538.24 Further, Baker, individually or through the companies he owned, registered several fictitious 

24 Baker contests the FTC's allegations that he owned or served as a director of these entities, asserting that his 

signature on documents of incorporation for GPA, Buy Belize, and Buy International was forged without his 

knowledge. Baker Findings of Fact (ECF No. 446) at ~ 24-28. Baker also contends that he was not involved in 

forming SBE Defendant Eco-Futures Development, Inc. ("Eco-Futures (US)"), which he says was created in October 

2016 by Rod Kazazi, who served as the CEO. i d. at 29. Overall, Baker maintains that he was only directly affiliated 

with Eco-Futures (BZ) and SR WR, neither of which, he says, were involved in marketing or sales. Id. at~ 31. 

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business names ("FBN") related to SBE, including "Eco-Futures," "Eco-Futures Belize," "EcoFutures Development," and "Sittee River Wildlife Reserve HOA."25 

Continuing: 

As SRWR Chairman, Baker attached a history of Sanctuary Belize to the 2016 SRWR 

Board Meeting Minutes, in which he wrote: "Peter Baker formed Global Property Alliance (GPA) 

in the US and hired Rod Kazazi, the former Vice President of Finance at American Apparel to 

head accounting and client concierge. Sales and marketing was lead [sic] by Brandi Greenfield 

and Luke Chadwick." PX 192, Att. 24 at 13. Baker was a bank signatory for GPA and SRWR, 

writing in an email in 2016 that the "Companies were in his name." PX 46 at 83 (GPA 5098 

account); id. at 85 (GPA 51 11 account); id. at 46 (GP A 5021 account); id. at 89 (GP A 5026 

account, d/b/a Palmaya Development); id. at 101 (GPA 5846 "commissions" account); id. at 103 

(GPA 6859 account, d/b/a Sittee River Wildlife Reserve); DX-AP-366; PI Hrg Tr., 3/15/19 

Afternoon, 22:5- 7 (Baker testifying that he wrote this email). Baker at one point also stated and 

swore to the accuracy of the statement that he was the "Sales Manager of Global Property Alliance 

Inc. (GPA)" as of 2014. PI Hrg Tr., 3/15/19 Afternoon, 36: 13- 37:4 (Baker testifying that he had 

signed a document affirming his role with GPA); id. at 38: 10 ("I am not denying that I signed it, 

no."). 

In May 2011 , Baker signed a lease for office space in Orange County, CA, in his own 

name, doing business as Eco Futures. Notably, the letter from Baker's broker to the landlord 

confirmed that the lease was for 'my client, Sanctuary Belize." PX 161 (emphasis in original). In 

25 The Orange County FBN "Eco-Futures" is registered to Baker individually, PX 54. GPA, which Baker admits 

owning, registered three additional SS E-related FBNs: "Eco-Futures Belize," "Eco-Futures Development," "Palmaya 

Development," and "Sittee Ri ver Wildlife Reserve HOA." PX 55; PX 56; PX 57; PX 58. 

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November 2012, Baker signed a lease for an office suite leased in the name of GPA, asserting that 

he was the "President" of GPA. PX 160. An SBE corporate phone directory from this time lists 

Baker and Pukke together at the top, whereas the rest of the employees are listed below in 

alphabetical order. PX 455. During this time, Baker also had an official parking spot at SBE's 

California offices. PX 612. 

Baker, moreover, had access to SBE funds, which he used to pay his rent and living 

expenses even while he says he was trundling back and forth between California and Latvia. PI 

Hrg Tr., 3/13/ 19 Afternoon, 10:14-11 :4 (describing how he was compensated, including having 

his rent covered for a $3,000/month townhouse in Newport Beach, California, utilities, food and 

other personal expenses); Baker Dep. Tr., 2/19/ 19, 173:5- 174:3 (explaining that any statement that 

he made only $50,000 per year is not accurate and "seems low" because of "things that weren't 

included in [that estimate] obviously"). Like Pukke, Baker made continuous use of an SBE credit 

or debit card for personal purchases for himself and his wife. PX 40 (Amazon.com purchase history 

for Peter Baker); PI Hrg Tr., 3/13/19 Afternoon, I l :8- 23 (had use of credit card for Amazon.com 

purchases); Baker Dep. Tr., 2/ 19/19, 249:1- 21 (confirming that the Amazon.com purchases 

included personal purchases paid for by the SBE, stating that "99 percent" " [w]ent to Belize for 

us to use in Belize for our personal needs"). Baker also opened a personal checking account and 

credit card in Belize, funding the account through transfers of funds from SBE. Pl Hrg Tr., 3/13/19 

Afternoon, 119:9- 120:5 (Baker testifying that this account was funded "from California"); Pl Hrg 

Tr., 3/13/19 Afternoon, 120: 14-121 :23 (Baker confirming substance of an email exchange in 

which 'Eco Futures Development," with a California address, asserted that Baker was an owner 

to substantiate wire transfers to his Belizean bank account). 

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In 2016, after commuting between Europe, California, and Belize- though clearly not 

having relinquished a controlling position in SBE- Baker returned to a more hands-on role in 

managing the Sanctuary Belize development. When Usher attempted to seize control of the 

development, Baker along with Pukke reduced Usher's role, and Baker traveled to Belize to assert 

his and Pukke' s control over the enterprise. PI Hrg Tr., 3/13/19 Afternoon, 85 :4- 12 (Baker, on his 

and Pukke's behalf, travelled to Belize to confront Usher when Usher attempted to wrest total 

control); PX 836 (email in which Baker recounts his confrontation with Usher, calling Usher a 

"thief," and prior email from Usher indicating that Pukke and Baker can run things in Belize 

directly moving forward); PI Hrg Tr., 3/ 13/19 Afternoon, 90: 13- 91 :7 (Baker testifying that, 

following the dispute with Usher, he took a hands-on role in Belize); DX-AP-366 (email exchange 

among Pukke, Usher, and Baker following the 2016 meeting regarding the plan moving forward, 

with Pukke and Baker directly controlling activities in Belize). The end result of the dispute with 

Usher had Baker replacing Usher as both Chairman of SR WR and as Managing Director of Eco 

Futures (BZ). PI Hrg Tr., 3/ 13/19 Afternoon, 90: 13-16 (became SRWR Chairman in 2016); id. at 

39: 1-1 l (took on "Managing Director ' role in 2017); PX 192, Att. 24 (2016 SRWR meeting 

minutes). When Usher subsequently sought to negotiate a new relationship with SBE, it was Baker, 

along with Pukke, who jointly decided what Usher's newly diminished role within SBE would be. 

DX-AP-366 (email exchange among Pukke and Baker). Since the FTC initiated the present action, 

Baker has remained in positions of authority at SR WR and Eco-Futures (BZ). 

Despite his protests to the contrary, the evidence strongly suggests that Baker's 

involvement in Sanctuary Belize marketing efforts since the beginning of the development has 

been intimate and continuous. He was one of the original marketers of the Sanctuary Belize 

development prior to the AmeriDebt Receivership, having directed marketing activities and having 

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served as the sales contact on marketing materials. PX 611; PX 623. And as early as 2005, he was 

involved in email communications on sales scripts containing claims that Sanctuary Beljze would 

have a hotel, marina, health center, and equestrian center. PX 362; see also PX 634 (Baker email 

showing there were already lot sales in 2005). 

Even as he supposedly took a less active role in SBE and decamped to Latvia in 2009, in 

a sustained effort to raise additional funds for the development, Baker continued to court potential 

investors in Europe. PI Hrg Tr., 3/14/19 Afternoon, 124:1-13 (stating that from 2010 to 2016, "I 

thought to try and get sales marketing or get a company in Europe to-I felt we were missing out 

on a whole slew of other customers in Europe and I tried, but never materialized getting sometrung 

going on over there"). PI Hrg Tr., 3/13/19 Afternoon, 9:25- 10:12. In 2015, for instance, Baker 

gave a detailed presentation on Sanctuary Belize to a potential European investor, providing copies 

of SBE's website and TV campaign. DX-AP-344. Baker's presentation echoed many of SBE's 

marketing claims, including references to such potential amenities as the marina and hospital, and 

consisted of promises that the development was expected to be finished within a timeline of three 

to five years. Id. at 9, 21. Baker was also involved in reviewing marketing claims regarding 

Sanctuary Belize before they could be posted online. DX-AP-343 at 3. More recently, since at least 

2017, he has attended and participated in sales tours at Sanctuary Belize, interacting with 

customers and working to close sales. Baker Dep. Tr., 2/19/19, 134: 18- 135:22; PX 814 ,i 24; DXAP-89 (sales tour spreadsheet identifying "Pete" as one of the closers on a sale and that "Pete" 

addressed concerns the consumer had regarding the development). 

Given his continuous involvement in the web of SBE companies, directly or indirectly, it 

is hard to conclude that Baker did not know SBE and its people were making any of the six Core 

Claims the FTC complains of or that he did not know that consumers had significant concerns 

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about the fact of Pukke's possible involvement in the enterprise. Baker testified that he himself 

was skeptical and concerned about the representation that every dollar from lot sales was being 

reinvested in the development. ECF No. 216 at 2-3 (Baker's pleading admitting that Pukke's 

siphoning of money rendered the "every dollar" claim false). Moreover, as early as 2016, Baker 

says he suspected Pukke was diverting funds from the enterprise. PI Hrg Tr., 3/ 13/19 Afternoon, 

83: 1- 84:20 (recounting 2016 allegations he was aware of that Pukke was siphoning money); id. at 

86:5- 21 (Pukke claiming he would address the allegations through an audit, but then never 

completed the audit); Baker Dep. Tr., 2/19/19, 149:21- 151: 17 (still not having seen an audit, Baker 

addressed concerns his wife had that money was being diverted by talking with SBE's accountant 

in 2018). While Baker has characterized certain of the amenities discussed in SBE marketing 

materials as only an "aspiration" or "vision" rather than actual promises, that simply has not been 

true of marketing materials or oral representations by SBE agents, nor does it account for the fact, 

in sharp contrast to the promises of "no-debt" operations, that financing would actually be needed 

to finish amenities at the Reserve in timely fashion. PI Hrg Tr., 3/ 15/ 19 Morning, 45:4-11 

(amenities, such as those in vision book, were just an "aspiration"); DX-AP-344 (presentation 

provided by Baker seeking financing to be able finish construction of the Marina Village at 

Sanctuary Belize). 

As for rapid appreciation and resale of the lots, although Baker testified to an isolated 

example of one owner selling a lot for a profit, he also testified that in fact he knew that owners 

had difficulty selling lots and that few people had resold properties for a significant profit. Baker 

Dep. Tr., 2/19/19, 344:22- 24 ("Oh, it was- there wasn't a lot of people who originally first bought 

who then flipped for a profit like her."). Baker also admitted that he knew Pukke had used the 

Marc Romeo alias and that false documents referring to Marc Romeo as a sales manager or SBE 

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officer necessarily were actually referring to Pukke. PI Hrg Tr., 3/15/19 Morning, 67:19-68:10 

(Baker admitting he was aware that Pukke used aliases); id. at 109:7- 13 (the real " [Marc] Romeo 

was not working with the development. At that time he had switched over from an initial investor 

to a lot owner only. So he was not involved in the project at all"); Baker Dep. Tr., 2/19/19, 211: 1-

24 (whenever "Romeo" appeared as actually involved in the development, this was a reference to 

Pukke under an assumed name). 

Baker argues that he has testified under oath and penalties of perjury that filings and bank 

records showing him having an ownership stake in SBE entities were falsified. That he may say 

this in no way diminishes the welter of contrary evidence in the record. At a minimum, even if 

someone else affixed Baker's signature to one or more documents, at this stage at least it can fairly 

be inferred that, either directly or indirectly, he authorized that to be done or, at a minimum, that 

he acquiesced to it being done. What is in the record satisfies the requirement at this stage that the 

FTC has a fair and tenable chance of proving Baker's liability.26 

G. SBE 's Liability as a Common Enterprise 

The factors which establish the liability of a common enterprise, see Section III.B.iii,

27 

supra, combine to indicate that the SBE Defendants to a high degree of certainty functioned as 

such. All SBE entity Defendants have operated from the same address- 3333 Michelson Drive in 

26 Insofar as Baker has been or may be cooperative and more truthful during the Receiver's efforts to right the ship, 

see, e.g. , Pl Hrg Tr., 3/20/ 19 Afternoon, 62: I 0-13; 73:7- 14; 97: 13- 24; 98: 18- 25; 99: 15- 20, he may yet have a future 

role to play in connection with the Reserve. That is a matter, however, that rests entirely with the Receiver. At this 

stage, it suffices to conclude that the FTC has met its burden of showing Baker is properly subject to a Preliminary 

Injunction. 27 To detennine whether a group of defendants operated as a common enterprise, courts " look to a variety of factors, 

including: common control, the sharing of office space and officers, whether business is transacted through a maze of 

interrelated companies, the commingling of corporate funds and failure to maintain separation of companies, unified 

advertising, and evidence which reveals that no real distinction existed between the Corporate Defendants." CFTC v. 

Noble Wealth Data Info. Servs. Inc., 90 F. Supp. 2d 676, 691 (D. Md. 2000) (quoting FTC v. Wolf, No. 94-5119, 1996 

WL 81 2940, *7 (S.D. Fla. Jan. 31 , 1996) (citations omitted). 

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Irvine, California. PX 816 at 6. All share common control, commingle funds, exchange extensive 

communications with one another, all share employees. Payments made to one company have been 

deposited in the bank accounts of others. See, e.g. , PI Hrg. Tr., 3/11/19 Afternoon, 105:4-20. 

Although some entities operated in Belize, they, too, had common employees and there were few, 

if any, relevant distinctions in their activities. See, e.g., PX 814 , 13. Most importantly, all the 

Belize-based entities have been answerable to operations in California. PI Hrg Tr., 3/20/19 

Afternoon, 71: 12- 72:6; PX 816 at 6. Bank account records show that the entities transferred funds 

freely among themselves, maintained bank accounts for other member entities, and deposited 

checks made out to other member entities. PX 250113 (documenting examples of transfers among 

the SBE accounts), PX 250; PX 251 (account inventory showing the GPA "OBA" accounts). In 

his testimony during the hearing, the Receiver explained that it was in fact very difficult to tell 

which entity an SBE employee worked for, since he found paperwork of several entities spread 

out on the same desk or nearby desks, and records of multiple entities were interspersed 

throughout. PI Hrg Tr., 3/20/19 Afternoon, 71 :3- 6. 

To establish that a corporation or common enterprise is liable for deception under Section 

5 of the FTC Act, the FTC must prove: (1) there was a representation; (2) "that was likely to 

mislead consumers acting reasonably under the circumstances"; and (3) the representation was 

material." FTC v. Loma Int '! Bus. Grp. Inc. , No. 11-cv-1483, 2013 WL 2455986, at *3- *4 (D. 

Md. June 5, 2013); see also FTC v. Innovative Mktg., Inc. , 654 F. Supp. 2d 378, 385 (D. Md. 

2009). It is "presumptively reasonable" when consumers rely "on express misrepresentations." 

FTC v. Five-Star Auto Club, Inc., 97 F. Supp. 2d 502,528 (S.D.N.Y. 2000) (quoting FTC v. Int 'I 

Computer Concepts, Inc. , No. 5:94CV1678, 1995 WL 767810, *3 (N.D. Ohio Oct. 24, 1995)). 

The express material representations likely to mislead consumers in this case are one, some, or all 

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of the previously discussed six Core Claims made by the FTC, as well as the continuing 

concealment of Pukke's involvement in the project. Although the Court need only find that one 

representation was material and likely to mislead consumers to hold Defendants liable, the FTC 

has shown a fair and tenable chance of proving all misrepresentations, for the reasons stated above. 

H. Defendants Who Have Not Stipulated to the Preliminary Injunction 

Apart from Pukke and Baker, the only individual SBE Defendants who have not stipulated 

to the entry of the preliminary injunction are Chadwick and Usher. Because the Court has found 

that there is a fair and tenable chance that the SBE entities are likely to be found liable on the 

merits, Chadwick and Usher will also be deemed liable if they "(1) participated directly in the 

deceptive practices Q! had authority to control those practices, and (2) had or should have had 

knowledge of the deceptive practices." FTC v. Ross, 743 F.3d 886, 892 (4th Cir. 2014). For the 

reasons that follow, the Court will grant the FTC's Motion for Preliminary Injunction as to both 

of them. 

1. Luke Chadwick 

Chadwick has served as a director of SR WR, the nonprofit that controls the parcel on which 

Sanctuary Belize has been developed. He has also been an owner or officer of SBE Corporate 

Defendants Prodigy Management Group, LLC ("Prodigy"),

28 Southern Belize Realty, LLC ("SBR 

28 Prodigy is a corporate entity through which the SBE Defendants compensated Chadwick. PX 297 ,r 282; PX 589; 

PX 590; PX 591. Chadwick controlled Prodigy, as evidenced by a joint venture agreement it undertook with a third 

party. PX 642. 

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(NV)"),29 Belize Real Estate Affiliates, LLC ("BREA (NV)"),30 and Exotic Investor, LLC ("EI 

(NV)")_31 

Chadwick was heavily involved in SBE marketing and sales efforts. As a physical presence 

in California, he managed SBE telemarketers who promoted Sanctuary Belize to prospective 

consumers. PX 496 (identifying Chadwick as a principal "responsible for the development and 

implementation of many new sales and marketing initiatives"); PX 814 ,r 22 (Costanzo affidavit 

testifying that Chadwick "had direct authority over a number of telemarketers" in California). 

Consumers have also asserted that Chadwick gave presentations during Sanctuary Belize sales 

tours, in which he (a) sang the praises of the development's no-debt model as decreasing the risk 

of an investment, (b) claimed that all revenue from lot sales would be reinvested in the 

development, (c) promoted the development's luxury amenities, such as a hospital and hotel, (d) 

asserted that Sanctuary Belize would be finished within two to five years, and (e) declared the ease 

with which lots could be resold. PX 183 ,r,r 18-20, 22, 29-30; PX 184 ,r,r 12, 14-15; PX 186 ,r,r 

25- 30.

32 Chadwick also told potential lot purchasers that Pukke was not involved with Sanctuary 

Belize. As one consumer stated: In response to his question about Pukke's involvement, 

"Chadwick looked me in the eyes and replied: 'Absolutely not! He is long gone. Anything you see 

29 Chadwick incorporated SBR (NV) in Nevis and is the company's sole owner. PX 297 244; PX 553; PX 44. SBR 

(NV) began operating a Coldwell Banker real estate franchise in 2014 in order to manage the secondary resale market 

in land and homes at Sanctuary Belize. Id. SBR (NV) does business as_ "Coldwell Banker Southern Belize. PX 593. 3° Chadwick also completely owns BREA (NV), which he incorporated in 20 15 to replace SBR (NV) as the 

Coldwell Banker real estate franchise responsible for marketing the secondary resale market for Sanctuary Belize. 

PX 297 244; PX 553 at 76- 136. 

31 Chadwick completely owns El (NV), also incorporated in Nevis. PX 297 ~~ 250-25 1; PX 558; PX 559. EI (NV) 

prepared infomercials promoting Sanctuary Belize to an American audience; for example, an SBE telemarketing sales 

script mentions that "Luke Chadwick just finished shooting the first 3 episodes of his new TV program called the 

Exotic Investor which highlights Sanctuary Belize." PX 602. 

32 Chadwick's own declaration states that SBE representatives made these marketing claims to prospective lot 

purchasers during sales tours of Sanctuary Belize. PX 752 at~ I 0. 

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on the internet or hear from people that says otherwise is old news and not true."' PX 186 ,i 28. At 

a minimwn, it strains belief that Chadwick was not fully aware of Pukke's involvement and 

concealment of his involvement in SBE. 

Accordingly, the evidence strongly intimates that Chadwick participated directly in SBE's 

deceptive marketing practices and had authority to control them. He knew, or certainly should 

have known, all about them. His direct misrepresentations to consumers during the webinars was 

persuasive, which is to say "material." See, e.g. , Pl Hrg Tr., 3/11/19 Morning, 58:21 - 23 (Michael 

Doran, a conswner, testifying that Chadwick "primarily" gave the presentations during the sales 

tour in Belize); id. at 82:2-5 (Doran identifying Chadwick as primary speaker during a webinar); 

PI Hrg. Tr., 3/ 12/ 19 Morning, 17:2- 11 (Michael Warren, a consumer, identifying Chadwick as the 

presenter during a webinar); id. at 42:22-43:7 (same). Chadwick also helped perpetuate the 

deceptive concealment of Pukke's role in the development. PX 493 (2011 email regarding 

Chadwick setting up email communications with Pukke during Pukke's incarceration); PX 635 

(Chadwick writing email in August 2011 stating that "Andi" "asked me to lead" and "I am very 

clear on what Andi told me and what his expectations are of me .... I asked him to confirm my 

understanding of what was to happen here in his absence and he did."). 

11. John Usher33 

The evidence shows that Usher has been involved with various SBE Defendants since at 

least 2005. He is Director of the Sanctuary Belize Property Owners Association ("SBPOA" ) and 

was an SRWR board member until at least 2010. Numerous marketing communications identify 

Usher as the "chairman," "developer," or "principal" of the development. Although Usher is a 

33 Usher, though duly served with process, has not entered an appearance in this case. 

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Belizean citizen, he visits the U.S. to conduct SBE business. PX 2971254; PX 564. PX 297 1 294; 

PX 603; PX 192 1 3, Att. 24. PX 297188; PX 380; DX-AP-366. PX 814 1 23. Apparently, it was 

Usher who suggested that Pukke adopt an alias when doing business with SBE. PX 427 at 277:3-

7; id. at 278: 17- 279: I (Pukke testified, at a hearing on violation of his supervised release, 

November 13, 2015, that Usher said: "Do me a favor, don't be using your name down here. I'm 

worried about banks, I'm worried of the government. They are pretty skittish, I'll be honest."). 

Not only did Usher have authority to control as the director of SRWR and SBPOA; he led 

SBE's litigation against American owners in Belize during which SBE falsely denied Pukke's 

involvement with the project. PI Hrg Tr., 3/19/19 Afternoon, 65: 15- 25. Evidence of Usher's active 

perpetuation of at least one material false representation- that of Pukke's involvement- by itself 

meets the FTC's burden of showing a fair and tenable chance of proving liability as to Usher. 

f Availability of Monetary Relief 

The FTC has a fair and tenable chance of showing that it is entitled to monetary restitution 

from SBE. Once the FTC establishes an enterprise's liability for misrepresentations to consumers 

pursuant to Section 5 of the FTC Act, the enterprise is liable for restitution if the FTC shows 

consumer reliance. Reliance is presumed if " (1 ) the business entity made material 

misrepresentations likely to deceive consumers, (2) those misrepresentations were widely 

disseminated, and (3) consumers purchased the entity's products." FTC v. Loma Int '/ Bus. Grp. 

Inc., No. 11-cv-1483, 20 13 WL 2455986, at *7 (D. Md. June 5, 2013). "[C]onsumer reliance on 

express misrepresentations" is "presumptively reasonable." F. TC. v. Five-Star Auto Club, 97 F. 

Supp. 2d 502, 528 (S.D.N.Y. 2000). 

The first requirement for presuming reliance by consumers, and therefore the FTC's 

entitlement to restitution, is that a common enterprise made material misrepresentations likely to 

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deceive consumers. The evidence strongly suggests that the SBE Defendants transgressed the Act 

by making as many as all six of the core marketing claims identified by the FTC as well as by 

continuously repeating the highly material misrepresentation that Pukke was not involved in the 

project. See Sections III.C.i-vi; 111.E, III.F., supra. 

The Court also finds the FTC has shown the second element required for restitutionary 

relief in that SBE widely disseminated the six Core Claims. Several manifestations have appeared 

in telemarketing scripts, webinars, brochures, and other materials. Consumer testimony and the 

FTC's undercover investigation confirm that these claims were made repeatedly throughout the 

United States to potential consumers. SBE representatives continuously denied Pukke's 

involvement to consumers online and even did so in litigation that took place in Belize. As a result 

of marketing "techniques" such as these, SBE sold more than 1,000 lots, including some sold more 

than once. 

Third, of course, it is clear that many consumers purchased lots at Sanctuary Belize, closing 

the loop for allowing recovery by way of restitution. 

Pukke's argument that consumers have not been harmed because their lot values have 

remained steady has little relevance at this stage. It is not known, of course, what the present value 

of the lots in fact may be. But whatever the value may be bears on the amount of restitution 

Defendants might be required to make. As of now, the issue is whether one or more material 

misrepresentations were made to prospective and actual lot owners. Under the FTC Act, the FTC 

has shown it has a fair and tenable chance of prevailing on these claims. 

J Equities 

In addition to determining the FTC's likelihood of success on the merits, which the Court 

finds the FTC has established, the Court is still obliged to weigh the equities of issuing a 

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Preliminary Injunction. AmeriDebt, 373 F. Supp.2d at 563. Here over a thousand consumer real 

estate investments-which is to say lots on the Reserve-will be affected by the issuance or nonissuance of a Preliminary Injunction, including the situations of some dozen or more families that 

have constructed homes on the Reserve, some of whom live there. 

The FTC represents the public interest in this case, which the }:ourth Circuit places strong 

emphasis upon. See Section 111.B.i, supra. The Court therefore gives that factor considerable 

weight. In contrast, were no Preliminary Injunction to issue, Defendants-including most 

prominently Pukke--could go about acting in the very ways that the evidence firmly suggests are 

so profoundly problematic, which is to say, potentially outright fraudulent. If a Preliminary 

Injunction is not entered, consumers will presumably continue making monthly mortgage 

payments on their lots in the thousands of dollars as well as dues for homeowner's association 

benefits that may never be forthcoming or, if they do come, that will only come at a particularly 

lethargic snail's pace. The Reserve's assets have been largely depleted, in considerable part, it 

appears, through irresponsible spending by SBE principals, most prominently Pukke. Potentially, 

new consumers may fall prey to the full gamut of what appear to have been Defendants' historic 

misrepresentations. 

With over a thousand consumers having an interest in the Reserve, some may dislike any 

plan for management involving a receiver. To be sure, in addition to the consumer witnesses the 

FTC presented at the Preliminary Injunction hearing who are dissatisfied and feel they were misled 

by SBE before the FTC and the Receiver entered the picture, Pukke and Baker called witnesses 

live and through affidavits who testified they were satisfied with the development, including 

emails to the Receiver indicating similar sentiments on the part of several other consumers. See, 

e.g., DX AP 11- DX AP 44; ECF Nos. 265-1 ; 265-2; 265-3; 290-1 ; 290-2; 290-3; 290-4; 290-5; 

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290-6; 290-7; 290-8; 318-1 ; 318-2). But the Reserve and the existing amenities must be 

responsibly managed. The Reserve has been under the Receiver's management for some eight 

months, and, all in all, it has done a creditable job maintaining the stability of the development. 

On balance, the Court believes that continuing the powers of the Receiver to function 

pendente lite will best protect and preserve the status quo. Subject to modifications along the way, 

the Court believes the current Receiver is the best bet to keep the development on an even keel 

until the merits hearing.34 The equities, therefore, weigh in favor of the grant of a Preliminary 

Injunction. 

In light of the importance preserving as many assets as possible for the final resolution of 

this case, an asset freeze is also appropriate to ensure "that any final relief is complete and 

meaningful." Ameridebt, 373 F. Supp. 2d at 562. Where the law presumes irreparable harm, as in 

an FTC enforcement action, the FTC need only establish "a possibility of dissipation of assets." 

Id., see also FTC v. JAB Mktg. Assocs., LP, 972 F. Supp. 2d 1307, 1313 n.3 (S.D. Fla. 2013) 

("There does not need to be evidence that assets will likely be dissipated in order to impose an 

asset freeze."), aff'd, 746 F.3d 1228 (11th Cir. 2014). The Court has repeatedly held throughout 

the pendency of this litigation that there is no tracing requirement for an asset freeze in a 

34 On July 9, 2019, the Court held a hearing on the various plans submitted by the FTC, Pukke, Baker, and a group of 

independent lot owners not party to the case, relative to the management of the Reserve during the pendency of the 

Preliminary Injunction and through the merits phase of the litigation. After listening to the presentations and argument 

on each proposed plan, the Court decided that the current Receiver, Robb Evans & Associates, LLC, should continue 

in place, as Receiver, with full discretion to manage the Reserve, for as long as the Preliminary Lnjunction remains in 

effect. The Court directed the Receiver to implement a mechanism for lot owners to present their complaints regarding 

the management, albeit with limits on the frequency and length of the complaints. The Receiver, in its discretion, may 

or may not choose to reply to the complaints or suggestions. The Receiver filed its Proposed Order consistent with the 

Court's instructions at the July 9 hearing on July 18, 20 19. ECF No. 524. That same day, the FTC filed a notice in 

support of the Receiver's Proposed Order. ECF No. 525. On July 29, 20 I 9, the group of independent lot owners not 

party to the case and Baker each submitted separate comments on the Receiver's Proposed Order. ECF Nos. 534, 535. 

Replies may be filed by August 5, 2019. 

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government civil enforcement action ( especially at the preliminary injunction stage). See, e.g. , 

Kemp v. Peterson, 940 F.2d 110, 113-14 (4th Cir. 1991) (" [S]ince the district court's order was 

preliminary in nature, pending a final determination of liability, the freezing of funds ... may be 

proper without respect to whether those monies are traceable to proceeds or profits and income 

from the proceeds"). 

Given the strong evidence of the diversion and dissipation of funds by SBE principals, in 

particular Pukke's history of diverting and hiding assets and his clandestine role of pulling all the 

strings for the development, there is a distinct possibility that the Reserve's assets would dissipate 

absent a Preliminary Injunction and asset freeze. 

IV. Conclusion 

The FTC's burden at this stage is less stringent than the relevant standard in a traditional 

preliminary injunction proceeding. As such, the FTC easily clears the bar, having adduced proof 

that it has a fair and tenable chance that it will achieve success on the merits. For that reason, the 

Court will GRANT the FTC's Motion for Preliminary Injunction, ECF No. 23. 

WITHIN TEN (10) DAYS, THE FTC SHALL SUBMIT A PROPOSED PRELIMINARY 

INJUNCTION, THE PARTIES SHALL HAVE TEN (10) DAYS THEREAFTER TO FILE 

WRITTEN RESPONSES, AND THE FTC SHALL HA VE TEN (10) DAYS THEREAFTER TO 

FILE A REPLY. THE COURT WILL DETERMINE THEREAFTER WHETHER FURTHER 

ORAL ARGUMENT ON THE ORDER IS APPROPRIATE. 

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Following the submission of the Proposed Preliminary Injunction and the comments of the 

parties, a separate Order will ISSUE. 

r August_, 2019 

/s/ 

PETER J. MESSITTE 

ED STATES DISTRICT JUDGE 

58