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  • Report:  #1197136

Complaint Review: NORTH DAKOTA DEVELOPMENTS LLC

NORTH DAKOTA DEVELOPMENTS LLC WWW.USAPROPERTYINVESTOR.COM MISPREPRESENTED, MISCONDUCTED, KEPT FUNDS RELEASED. WILLISTON North Dakota

  • Reported By:
    GASTON — SPAIN North Dakota
  • Submitted:
    Mon, December 22, 2014
  • Updated:
    Mon, May 18, 2015

Back, On or about December 2013, I first signed a contract agreement, a purchase agreement, a lease agreement and a mangement agreement with North Dakota Developments LLC thru its solicitor regional center located in UK. (NDD AND UPI, both in UK)

I booked a suite with a 2900 USD non refundable booking fee *

The purchase investment was for a single unit in a workforce housing camp named Great American Lodge GAL 3, with a leasehold of 40 years with the promising R.O.I of up to 42%.The promised date for completion and opening was JAN 2014. They had pushed back the dates periodically to , April, May, etc, etc. By this time I had released a first stage for 21.582,5 USD including legal costs for 2350 USD for closing, into an Escrow account with the law firm Durick and Pearce (Jonathan Sanstead is the designated attorney-AGENT).

After seeing their delays which they blamed the weather (misconduct: because a sale and construction in ND shoud have been anticipated its contruction to set a date). The fact was that it was just a selling pitch to obtain the funds, in order to continue to fund existent GAL 1 and 2. (GAL 1 opened Nov. 2014, 1 year later of its promised date, same as GAL 2, later).
Although this was evident, former employee blew the whistle" the CEO Mr. Robert Gavin said that investor's testimonials in its website of a great returns " were bullshit, not real." This former employee also mentioned that they knew that the completion and opening dates were not true, just a tactic to get the monies upfront". Misconduct and misrepresentation.

So, by now, the other GAL Eastern Montana, Culberston City was previously set date for Opening March 2014. Therefore I decided to contact Mr. Delcen Collins, sales manager who after my initial complaint changed me to that site with the promise of opening and completion. I signed new but same contracts on MAY 7, 2014 with the same terms and conditions. The fact was that no terrain was prepared for the units, needless to say the units built. It was not only a sales pitch but a misrepresentation and breach of contract, because on March 17th 2014 they had requested the 2nd stage payment release of 19.232,00, which according to contract, it was only when the unit was built and ready for shipment. So they kept pushing periodically again the opening dates as if units were on site already. Some of the units, 20, were shipped to site on September. STILL not complete, not open.

The failed again. The excuse again was weather, the manufacturer had built them insatisfactorily and had to be returned. So the question rised was, why did you promise an opening day when you knew it wasnt going to be honored? Even after the 2nd fund release process, I insist and repeat the terrain was not prepared, nor the units having been built.

Later but around the same time, another affiliated manager apart from UPI UK, had been fishy selling the Montana units with title in deed.

Please be advised that the affiliated managers are approved sale agents by NDD.

In fact, according to contract there is a 999 leasehold on the land.
 
The dates for opening the Montana site were pushed back perdiodically to May, June, September, late November early December 2014. STILL WAITING FOR UNITS and CERTIFICATE FOR OCCUPANCY. Shouldnt all this have been done previous to the sale and promising opening dates?

Nonetheless, NDD announced the purchase of the manufacturer complex because this one was having economic difficulties .According to them the purchase details were confidential. (According to NDD docket filed 5th of December 2014, NDD is plaintiff, and Cascata Homes LLC, defendant).

So, the Montana units were all sold but still needed land and completion. So, what happened next? they announced a 4th GAL in ND. Which confirms that the money funded for Montana was being used for the next or to fund the manufacturer purchase and its existent open sites 1 and 2.

And this is not all. Weeks ago, they announced the build up of a hotel.

As the pressure was mounted on them by investors, they announced a rebate program two months ago with a first payment of 580 eur received, a second payment of 218 eur received, and November payment for 214. Euros.
B
ut this isnt even ALL: The new push back date for MONTANA GAL is Spring 2015!!. A total unacceptable one, and grounds for withdrawal.

On December 13th, I have emailed a letter to COO Mr. Danny Hogan, Delcen Collins sale manager, and Accountant Martin Brenan, CCed to Alan Clarke sale assistant and Sarah and Ollie Booth affiliated managers (UPI UK) requesting a full refund as the purchase was not closed. It was also informed both Escrow agent and business that 3rd stage won't be released, basing my decision on all above described.

A response was received saying that "delays" do not constitute breach of contract. However, it doesnt respond to the real breach of contract, misrepresentation and business misconduct to conduct business for self interest while individual investors like me among dozens of others have relied upon them in good faith.

They have also said they wont refund any monies as it is not stated in contract and that UPI agent may find a replacement owner for 6,000, what the heck? The fact is that no replacement owner is stated in contracts.
 

Finally, I urge your client a refund of my investment back in the position it would have been in had I never invested with the firm. A full refund of 40,815.00 in USD currency. PLUS the reservation fee * 2900 minus rebate payments (1012,94). Total amount of 42702 USD.


** I would like to be perfectly clear that despite the contract depicted the reservation fee as non-refundable, in order to put the client into a full commitment based on supposedly none misleading selling advices and promises, but later they come not to factual, the seller should refund it.

PRECEDENTS: http://www.trulia.com/voices/Investment_Properties/is_the_North_Dakota_Development_LLC_company_a_scam-584085
 

4 Updates & Rebuttals


StarPlayer

United States of America

North Dakota Developments, LLC, Robert L. Gavin, Daniel J. Hogan

#5Consumer Comment

Mon, May 18, 2015

Securities and Exchange Commission v. North Dakota Developments, LLC, Robert L. Gavin, and Daniel J. Hogan, et. al

SEC Halts Bakken Oil and Gas-Related Investment Scheme

The Securities and Exchange Commission today announced charges and an emergency asset freeze against North Dakota Developments, LLC ("NDD") and its two principals for allegedly defrauding investors in a scheme to purportedly build and operate short-term housing facilities or "man camps" for workers in the Bakken oil and gas formation of North Dakota and Montana.

The SEC alleges that NDD and its owners Robert L. Gavin and Daniel J. Hogan have raised over $62 million from hundreds of investors in various states in the U.S. and foreign countries for interests in one of four "man camp" projects. According to the SEC's complaint filed yesterday in U.S. District Court for the District of North Dakota, investors bought "units" in NDD's projects motivated by the Defendants' promises of exceptionally high annual returns, up to 42%, and that NDD would jointly manage all of the units as a fully-developed short-term housing facility with amenities typically found in a hotel. The SEC also alleges that the Defendants offered investors the option of receiving a "guaranteed" annual return of up to 25% of the purchase price of their unit without regard to actual rental income. As further inducement to invest, Defendants also promised investors that the various projects would be operational in a very short time frame, often within months. In reality, the SEC alleges, despite the substantial amount of funds raised by the Defendants since May 2012, at the present time, none of the projects are fully operational and one of the projects offered does not even have governmental approval for construction to begin.

According to the SEC's complaint, Defendants directly or indirectly made material misrepresentations and omissions regarding the use of investor funds, the payment of commissions, and the return on the investment. Among other things, the SEC alleges that NDD's first project was delayed and unprofitable. The SEC alleges that, despite the lack of profits, the Defendants made Ponzi-style payments to certain early investors by paying their "guaranteed" returns using funds provided by later investors. The SEC also alleges that instead of developing the projects as promised, the Defendants have misappropriated over $25 million of investor funds to pay undisclosed commissions to sales agents, make payments to Gavin and Hogan, make investments in unrelated Bakken area projects for Gavin's and Hogan's personal benefit, and to make the Ponzi-like payments.

On May 5, 2015, the Honorable Daniel L. Hovland for the U.S. District Court for the District of North Dakota granted the SEC's request for a temporary restraining order and asset freeze against NDD, Gavin, and Hogan. A court hearing has been scheduled for May 18, 2015, on the SEC's motion for a preliminary injunction.

The Commission's complaint alleges that NDD, Gavin, and Hogan violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and seeks preliminary and permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties against each of them.

The SEC's investigation has been conducted by Michael Cates, Anne Romero, and J. Lee Robinson of the Denver Regional Office, with supervision by Ian S. Karpel. The SEC appreciates the assistance of the North Dakota Securities Department.

 

http://www.sec.gov/litigation/litreleases/2015/lr23252.htm


follow up

#5Author of original report

Mon, March 30, 2015

Hell Stephanie, please contact me at geprocopio@hotmail.com

Thank you.


Stefania

Italy

NDD scam

#5Consumer Comment

Sun, March 08, 2015

I am in the exact same situation, after months of misleading and having their investors to believe than the delay would be solved in no time, what they are offering now is an exchange accomodation, even worse than the original one, that doesn't even have a bathroom in the room!!! And we were charged 50,000$ for that room !!!

I have not seen one penny interest so far, and no fixed date when the work will begin. Just one delay after another and absurd falses excuses from NDD.

I woud like to take legal action, and would like to contact people that are in my situation, maybe a group action against these people would be better!? Mr Gavin and Co are taking millions from new investors for new projects that will start who knows when while they haven't even honour and finished their current project. I am trully outraged and disgusted. 


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