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Jason Grosfeld, CEO of IronGate, is facing legal action In a recently filed lawsuit in California Superior Court against Irongate, Grosfeld and others accuse Irongate of once again engaging in fraud and wrongfully taking buyer’s money.
The new lawsuit alleges that in April 2018, Irongate took a $5 million deposit from a holding company called GS 1975 LLC for a $10 million home in Costa Palmas that Irongate promised would be completed by June 2019. The home, however, was not completed by that date.
Between April 2018 and September 2022, Irongate allegedly misrepresented the status of construction, including sending a notice of substantial completion to the plaintiff on September 6, 2022 and demanding another payment of $1,575,000 dollars. The lawsuit claims that Irongate would not allow the plaintiff to inspect the home before the additional money was paid.
The plaintiff also alleges that upon inspection, the home was not inhabitable, construction was nowhere near complete, and the construction that Irongate had done was shoddy and defective. According to a representative of GS 1975 LLC, the company has also initiated a civil arbitration proceeding against Irongate in Mexico, as well as Mexican criminal proceedings against Irongate, Grosfeld and other Irongate representatives, including David Waller, Michael Radovan and Mitch Laufer.
Costa Palmas, a 1,500-acre resort and residential community on the East Cape of Los Cabos, Mexico is home to the Four Seasons Resort & Residences Los Cabos, the Amanvari Restort & Residences, and its own private beach, golf and yacht club. Costa Palmas is Jason Grosfeld’s latest luxury development venture, which, for the past six years, has been marketed as the world’s newest premiere residential community for the prominent and the wealthy.
Jason Grosfeld, through his real estate company Irongate, has built and sold homes in Costa Palmas, receiving hundreds of millions of dollars. Based on recent lawsuits filed by multiple homeowners in Costa Palmas, however, it appears that Irongate may be employing the same business tactics that destroyed its “Trump Ocean Resort,” a luxury residential project that Irongate partnered with Donald Trump to develop in Baha California, Mexico.
In a lawsuit filed against Irongate and others in 2008, more than one hundred plaintiffs accused Irongate of fraud and other wrongful conduct based on Irongate’s misrepresentations about Donald Trump’s role in the Trump Ocean Resort and Irongate’s receipt and misuse of more than $30 million in buyer’s deposits. An investigation conducted by Univision News and Columbia Journalism Investigations found that Irongate and Jason Grosfeld misled buyers for almost two years, greatly exaggerating the number of unit sales and falsely telling buyers that permanent financing had been secured for the project, when in fact it had not.
Irongate promised construction was in progress, but after two years there was only a large pit with a few slabs of concrete. Univision’s investigation also revealed that one of Irongate’s lenders discovered “a massive misuse of deposits used to cover overruns.” History seems to be repeating itself in Costa Palmas.
At least one other homeowner in Costa Palmas has also filed litigation against Irongate for fraud, extortion, and interference with valuable contract rights. On January 27, 2023, TRG CP, LLC filed suit in federal court in California lawsuit against Irongate, David Waller and Mitch Laufer, alleging that they fraudulently induced the plaintiff to sign an Estoppel Certificate in connection with the construction of a home in Costa Palmas and engaged in acts of extortion or attempted extortion to wrongfully force the plaintiff to pay millions of dollars that the plaintiff never agreed to pay.
This lawsuit alleges, similar to the claims asserted by GS 1975 LLC, that Irongate repeatedly made false promises about the costs and timing of completion of construction of the home to induce payments of millions of dollars and, after taking almost $5 million of the plaintiff’s money, the home is nothing but a bare concrete shell. The lawsuit further alleges that Irongate refuses to do any more work on the home, and is holding the home hostage, unless the plaintiff pays millions of dollars more to Irongate. We reached out to representatives of TRG CP, LLC for comment, but received no response.
Our sources advised that there may be many other home buyers in Costa Palmas with similar stories or experiences, and that other legal proceedings against Irongate and its representatives may be pursued. We are also advised that federal authorities both in Mexico and in the United States are investigating this matter.
