Ten Individual and Corporate Defendants Settle FTC Charges that They Participated in, Controlled, or Benefitted from the Sanctuary Belize Real Estate Scam
Just prior to trial, ten individual and corporate defendants agreed to settle Federal Trade Commission charges that they participated in, controlled, or illegally benefitted from the allegedly deceptive marketing of the “Sanctuary Belize” real estate development in remote southern Belize, including charges that they deceived U.S. consumers regarding the amenities that the development would have, the time in which it would be completed, and the ability to re-sell lots. According to the FTC, the Sanctuary Belize scheme took in more than $120 million, primarily from American consumers.
Rod Kazazi, Michael Santos, Frank Costanzo, Brandi Greenfield, and the companies they control each agreed to broad orders limiting their future business practices and to forfeit assets that will likely provide more than $500,000 towards consumer redress.
In addition, Angela Chittenden, the long-time partner of the scheme’s ringleader, Andris Pukke, agreed to forfeit all rights she may have to assets in any way derived from the scheme or that she purportedly held on behalf of Pukke, including all interests in a Newport Beach mansion that he previously attempted to sell for $18 million.
Although the recoveries under these settlements are contingent on the sale prices of the assets in question and the ultimate costs in liquidating the assets, combined they will assist in providing significant recoveries to injured consumers.
The U.S. District Court for the District of Maryland will enter a judgment against the remaining defendants in the case, including Andris Pukke, Peter Baker, and Luke Chadwick.
Newly Announced Settlements
Rod Kazazi and Foundation Partners (FP). The FTC alleged and presented evidence showing that Kazazi served as the CFO and COO for the scheme, distributing sales scripts to marketing staff, managing certain members of the marketing team, negotiating contracts with consumers and third parties, responding to consumer complaints, directing financial transfers (including siphoning money from the development to benefit others such as Pukke), incorporating many of the web of entities, and acting as a bank signatory for Sanctuary Belize entity accounts. Kazazi owned and operated FP, which the FTC alleges began another part of the scheme’s web of entities and ultimately became Kazazi’s personal shell company.
The order settling the complaint against Kazazi and FP permanently bans them from telemarketing and prohibits them from making any misrepresentations in the sale of any good or service. Based on their direct involvement in the Sanctuary Belize scheme, it also imposes a $144 million judgment against them, which was to be suspended if Kazazi and FP transferred several assets as well as $268,873 to the Commission. Kazazi and FP, however, failed to transfer the funds to the FTC and, therefore, currently owe the FTC $144 million. Kazazi is currently contesting the judgment, and the FTC disputes his position.
Michael Santos. The FTC alleged and submitted evidence to establish, that Santos was directly involved in the scheme’s deceptive marketing practices, while using his status as a prison reform advocate to gain consumers’ trust. As argued by the FTC, Santos met the ringleader, Pukke, while both were in federal prison. After being released from prison, Santos sought and obtained a position working for Pukke with the Sanctuary Belize scheme, despite knowing that Pukke had been previously charged with deceptive marketing. Santos later became the “Director of Business Development,” and created numerous videos repeating the scheme’s claims that the court has since determined were deceptive.
The order settling the charges against Santos provides strong injunctive relief commensurate with his alleged role within the scheme. The order bans him from marketing or selling real estate and from providing debt relief services of any kind. It also prohibits him from providing any business coaching services where he makes earnings claims without first providing, in writing, materials substantiating those earnings claims.
The order imposes an $86 million judgment, which will be suspended if Santos turns over assets with a liquidation value of less than $500,000. If it is later found Santos misrepresented the existence or value of his assets to the FTC, the full judgment may become due.
Frank Costanzo, Ecological Fox LLC, and Debra Connelly. The FTC alleged that Costanzo was an officer or owner of three corporate defendants named in this case. According to the FTC’s complaint, he was involved in the deceptive marketing of Sanctuary Belize, including leading presentations to potential investors and taking part in sales tours. Connelly, Costanzo’s wife, is a relief defendant whom the FTC alleged illegally benefitted from, but did not actively participate in, the Sanctuary Belize scheme.
The order settling the charges against the three defendants permanently bans Costanzo and Ecological Fox from telemarketing, marketing, or selling real estate goods or services and from misrepresenting any aspect of any goods and services. The order imposes a $144 million judgment against Costanzo and Ecological Fox, and a $478,804 judgment against Connelly, both of which will be suspended upon the transfer of certain assets to the Commission. As with the other suspended judgments, the full judgments could become fully payable if, in the future, the FTC learns that the defendants misrepresented their assets to the FTC.
Brandi Greenfield and BG Marketing, LLC. According to the FTC, Greenfield was a senior officer of the Sanctuary Belize scheme, and BG Marketing was a shell company that she controlled. The FTC alleged that as a senior officer she managed the deceptive sales and marketing operation, including directly overseeing the telemarketers making the allegedly deceptive claims to consumers.
The order settling the charges against Greenfield and BG Marketing ban them from all telemarketing, as well as from making misrepresentations during the sale of any good or service. The order also imposes a $144 million judgment against them, which will be suspended based on their transfer of assets totaling more than $24,332 to the Commission. The full amount of the judgment will be due and payable if it is determined that Greenfield or BG Marketing misrepresented their assets to the FTC.
Angela Chittenden and Beach Bunny Holdings, LLC. Chittenden is Pukke’s long-time partner, and through the Sanctuary Belize scheme Pukke distributed cash and investments derived from the fraud to Chittenden and her company, Beach Bunny. While not directly involved in the Sanctuary Belize scheme, Chittenden and Beach Bunny benefitted financially from its illegal conduct. The order settling the charges against them requires them to pay $265,000 and to relinquish numerous assets likely worth more than $1 million.
The Commission vote approving each of the proposed stipulated final orders was 5-0. The FTC filed the proposed orders in the U.S. District Court for the District of Maryland, Southern Division, and they have been entered by the court.
NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.
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