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Punta Banda Real Estate Fraud

The untold secrets where 200 U.S. investors lost $80 million

In a Public Television discussion, former CIA and FBI operatives commented on America's spy scandals in Punta Banda. The narrator asked a question that I always wanted answered. Why do we need spies anyway? The general response, from the panel, was everybody has secrets. if you know the other guy's secrets you have an advantage over that individual or country.

This begs the question: why not stop having secrets? Yeah, I know, we have to be realistic. There are some bad boys in the world who want to do us harm etc. etc. etc.. Too bad that man has not evolved beyond these self-fulfilling prophecies that viciously cycle us into counterproductive, aggressive and defensive campaigns.

These spy guys spent their careers with cameras in their bow ties. How could they hold my serious attention? Their discussion about the importance of state secrets sent my mind leaping to Punta Banda and the secrets that betrayed gullible investors.

I had always assumed that all the folks, who lost their homes in Punta Banda, knew at the time of purchase, that the title was in dispute. I believed that because it was common knowledge in Ensenada that the Baja Beach and Tennis Club and the Ejido (farming cooperative that squatted on the land) were being sued by individuals with legally registered title documents. We, in the Spanish speaking business community were amazed that the gringos were buying disputed land in Punta Banda. I told every gringo I could to stay away.

Many bought despite my warnings. Many more, isolated because of language and driving straight from Orange County to the Baja Beach and Tennis Club, did not get “the word”. They did not hang out in Ensenada or converse with Ensenadenses (sp.) about Punta Banda.

The local property owners on the peninsula also had an information booth at Villarino Camp near the turn off to the Beach Club. The sole purpose of this booth was to educate the gringos about the punta banda fraud that was being perpetuated.

All the maps and registries of the owners suing Baja Beach and the Ejido were available for review. Gringos tend to hang out with gringos and obviously the locals did a lousy job of promoting their information. A fact of cultural separation.

The other reason I assumed that all were aware of the litigation is that the law suits were filed in the mid 1980”s. In the late 1980's, I addressed 150 members of the homeowner's association regarding the suit. Those that bought, after my presentation, did not get the word or a copy of the meeting minutes that went to all the homeowners within that time frame.

Unfortunately the suit was against the developer and the Ejido, not against the individual homeowners who received no legal notification of same. Lawyers for the homeowners have argued that third party notification should have been respected. It is clearly specified in the Baja California civil code that third parties affected in a law suit be notified. This argument, unfortunately has not prevailed in the courts.

Last year I began receiving e mails and phone calls from Punta Banda victims who have convinced me they did not know about the litigation when they purchased in the early 1990's. That means that for more than five years the developer kept the secret despite his claims to the contrary. The U.S. sales team kept the secret, the U.S. builder of the homes kept the secret, the U.S. owned real estate office (established for resales) and the homeowner's association leadership – THEY ALL KEPT THE SECRET.

What was the motivation? Greed maybe? Concern about damaging resale values? I don't know, but I do know the developer was not the only person who kept the dirty little secret. One of the victims on Punta Banda, who claims she never knew, was a good friend and neighbor of a highly respected retired, Chicano, Los Angeles attorney, 100% fluent in Spanish, who read the demand and response documents.

I spoke with the attorney about the legal problems. He told me he was convinced, after studying both sides to the suit, that the risk to losing his home in Punta Banda was minimal. Why didn't he share the existence of the suit with his good friend and neighbor?

Rationalization was the driving force in keeping the secret. It was "in everybody's best interest" to keep it quiet. Too much talk could create a panic and destroy the project's future. The attorney, like everyone else, lost his home.

The ugliest secret, is the damage the developer did to the environment. It was a time in Mexico when you could do anything you wanted with enough money to bribe officials. The developer was able to rape the landscape while officials and investors ignored horrible environmental devastation in Ensenada Bay.

He bulldozed precious sand dunes in a "protected" bird nesting sanctuary. These dunes formed food chain imperative lagoons. Habitats for critters vital to maintaining a variety of birds and sea life in the precious and delicate Ensenada Bay and wetlands.

His filling and changing the topography of wetlands destroyed the estuary ghost shrimp specie that formerly thrived in the Punta Estero waterways. Shrimp fisherman both locals and tourists had savored this delicacy for hundreds of years without destroying the population. Mr. Terán and company obliterated the population in less than one year of bulldozing and filling of wetlands

It was later learned that no permits were ever issued to develop the estuary. When PANISTA Governor Ernesto Ruffo took office, as the first opposition party governor to be elected in the nation, the project's encroachment on the estuary was halted. Officials were finally ordered to do their job. Unfortunately too late to save the lagoons, dunes and habitat that were destroyed forever.

This miserable secret was also kept by many of the early buyers at Baja Beach. I asked Lee Zaremba, a spokesman for the homeowner's association, what he thought about the destruction of the environment. He had regaled me with stories about playing in the estuary, as a small boy, when it was absolutely pristine. His response was typical and yes - logical: "They are going to do this development with or without me. I love this area and always have, I want to spend the rest of my life enjoying it the best I can". It hasn't been too many grins for Lee and I'm sorry for him, his family and neighbors.

Secrets - They pit nation against nation. Secrets in a marriage cause divorce and emotional scarring of children. Insider secrets often cause some investors to gain from the losses of others. Unfortunately, many folks banked their life's savings on a mean spirited, avaricious and greedy secret called Punta Banda. Shame on you, if you helped keep the secret.


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