Jason Grosfeld, the CEO of Iron Gate, is being sued. Grosfeld and other defendants allege that Iron Gate has once again engaged in fraud and has wrongfully collected money from clients in a new case against the company that was submitted to the California Superior Court.
In April 2018, GS 1975 LLC, a holding company, allegedly paid Iron Gate a $5 million deposit for a $10 million Costa Palmas home that Iron Gate claimed would be done by June 2019. The house, however, was not yet finished at that point.
Iron Gate is charged with lying to the court regarding the project’s advancement between April 2018 and September 2022, including by telling the plaintiff the project had passed a critical milestone on September 6, 2022, and asking for an extra $1,575,000.
What Is Said Precisely In The Lawsuit?
Jason Grosfeld, the owner of Iron Gate, allegedly refused to allow the plaintiff to see the home unless the additional funds were paid.
In addition, the plaintiff asserts that upon examination, the house was uninhabitable, the construction was far from complete, and Iron Gate’s work was subpar and faulty. A representative of GS 1975 LLC stated that the company has also begun civil arbitration proceedings against Iron Gate in Mexico as well as criminal proceedings against Iron Gate, Grosfeld, and other Iron Gate representatives, including David Waller, Michael Radovan, and Mitch Laufer.
Inn & Residences at Four Seasons Costa Palmas, a 1,500-acre resort and residential community on the East Cape of Los Cabos, Mexico, is home to Los Cabos, the Amanvari Resort & Residences, as well as its own private beach, golf course, and yacht club. For the past six years, Costa Palmas, the most current luxury housing development by Jason Grosfeld, has been marketed as the newest exclusive neighborhood for the rich and famous.
Real Estate Company Iron Gate:
Through his real estate company Iron Gate, Jason Grosfeld built and sold homes in Costa Palmas, making hundreds of millions of dollars. Iron Gate cooperated with Donald Trump to develop the “Trump Ocean Resort,” a premium residential property, in Baha California, Mexico. However, it appears that Iron Gate may be employing the same business tactics that destroyed the project. This is based on recent legal actions taken by various Costa Palmas property owners.
Prior Legal Action Taken Against Iron Gate:
More than a hundred plaintiffs claimed in a 2008 lawsuit filed against Iron Gate and others that Iron Gate had misled them about Donald Trump’s involvement in the Trump Ocean Resort and had committed other wrongdoings by taking and abusing more than $30 million in buyer’s deposits. An investigation by Univision News and Columbia Journalism Investigations found that Iron Gate and Jason Grosfeld deceived clients for over two years by dramatically inflating the number of units sold and by representing the project’s financing as permanent when it was not.
Despite Iron Gate’s claims that work was in progress, after two years all that was left was a sizable hole and a few concrete slabs. Another discovery made by Univision’s research was that one of Iron Gate’s lenders had discovered “a massive misuse of deposits used to cover overruns.” The past seems to be coming full circle in Costa Palmas.
At least one other Costa Palmas property owner has also filed a lawsuit against Iron Gate for breach of contract, fraud, and extortion. On January 27, 2023, TRG CP, LLC filed a lawsuit in federal court in California against Iron Gate, David Waller, and Mitch Laufer. The lawsuit alleged that the defendants had wrongfully forced the plaintiff to sign an estoppel certificate in connection with the construction of a home in Costa Palmas and had engaged in extortion or attempted extortion to get the plaintiff to pay millions of dollars that the plaintiff had never agreed to pay.
Additional Information On The Legal Difficulties Of Jason Grosfeld, The CEO Of Iron Gate
In order to get millions of dollars worth of payments, the complaint alleges that Iron Gate continually made false promises concerning the price and timeline for the completion of the property’s construction. It also asserts that after receiving approximately $5 million from the plaintiff, the residence is now nothing more than a decrepit concrete shell. These accusations resemble those put out by GS 1975 LLC. Iron Gate is allegedly holding the plaintiff’s home hostage and preventing any more work from being done on the property unless the plaintiff pays it millions of dollars in extra fees, according to the lawsuit. We attempted to contact representatives of TRG CP, LLC for comment but received no response.
Our sources indicate that there may be several other Costa Palmas house buyers with similar claims or experiences and that Iron Gate and its agents may face additional legal proceedings. Additionally, we’ve been told that both Mexican and American federal officials are looking at this issue.