Twist in $7.8 million Golden City alleged Bali scam nightmare
The two men at the centre of an alleged Bali land scam have broken their silence to hit back at wild claims.
The two men at the centre of a $7.8 million Bali property nightmare have broken their silence to hit back at claims they are operating an alleged land scam.
On November 17, news.com.au published a detailed investigation into an alleged US$5 million ($7.8 million AUD) land and property scam in Sumbawa, a tropical island 200km east of Bali.
Days after the investigation was published, the project’s website, thegoldencities.com, was taken offline.
Golden City was marketed as a fully integrated lifestyle resort with an Ayurvedic healing centre, school, day spas, permaculture gardens, co-working spaces, yoga studios and gourmet organic restaurants. Marketing material claims it “stands out in its vision to provide world-class, state-of-the-art, luxurious experiences that are highly affordable and at the same time profitable.”
Parcels of land were offered for lease starting at US$8,000 for 100 square metres. Investors could then build their own dream homes or pay the developer to build it for them.
Not one of the 130-something investors who signed up at Golden City consulted a notary before handing over sums of up to half a million US dollars to the developers. As a result, for many of them, their dreams have gone belly up.
Seven years have passed since the first lease changed hands at Golden City in 2016. But there is not one single viable building on site because, as lawyers allege, the developers don’t own the land.
Now, 62 angry investors have joined a class-action lawsuit against the founders of the Golden City: Yansen Barry, the Indonesian director of Bumi Kristal Sumbawa, a company formed to buy and sell property in Sumbawa; and Brett Sorenson, an American expat who goes by the name Brett Black and who co-owns Clear Cafe Ubud and Clear Cafe Canggu, two popular restaurants in Bali.
They are also being investigated by Indonesian police for embezzlement and fraud.
Now, in a new twist, the project’s founder reached out to news.com.au, denying all claims and allegations levelled against them and demanding an opportunity to tell their side of the story.
Bunch of ‘lies’
“It’s all lies. [The plaintiffs in the class action] were all brainwashed to sign up for something that is not true,” Sorenson says.
“What is the lie? The lie is that there has been criminal activity [at Golden City] and that people are being cheated out of their money and if they don’t [join the class action lawsuit] to get their money back, their money will be gone. It is a complete and utter lie.
“[The lawyers] illegally sent out an email to all the investors slinging this false narrative and people went down the rabbit hole [with the allegation] that we don’t own the land.”
A quick search on Indonesia’s National Land Agency Register confirms the land in question is not owned by Golden City, Brett Sorenson, Brett Black nor by his partner Yansen Barry or Barry’s real-estate company, Bumi Kristal Sumbawa.
Sorrenson says there is a perfectly logical reason for the faux pax.
“You would think [our names would be registered as the legal owners] on the [National Land Registry] website. But Sumbawa is very, very tricky and there are multiple certificates for these lands,” he says.
“Bali has the same issue. There are multiple lands in Sumbawa that are still in the process of being cleared by the national registry. It’s a tricky subject. People can say we don’t legally own it just because there are a couple of parts we still don’t own, but we own a massive area, about one-square kilometre.”
Sorenson claims he is “just the face behind the project” and “doesn’t know all the legalities. For that, you need to speak to [my partner] Barry,” he says.
Barry told news.com.au the problem lies with the registry itself.
“I think the [National Land Registry] has made a mistake, the system is not correct,” he says.
“The [National Land Registry] is not the standard for truth. The information the website has is not always correct. I can prove it to you. I have plenty of certificates [of ownership].”
Barry sent news.com.au one of what he said was a number of official government land certificates proving he owns the land at Golden City.
The certificate was independently analysed by Terje Nilsen, director of Steven Stones Indonesia, a Bali-based consultancy specialising in real estate investments.
“The land certificate is registered in the name of [another company] on a [leasehold] title with 44,235 sqm of land issued in 1999 and set to expire next year,” Nilsen said. “I am not sure who the owner is. The shape of the certificate does not match the plots [pictured in Golden City’s investor prospectus] and seems to be a plot further east as it borders rivers and maybe a forest area.”
Nilsen believes investors who are unhappy with the result must bear some responsibility for failing to consult a notary.
“How could investors go along doing things they would not consider doing at home, but do in a foreign country? In general, Indonesia is becoming very structured and safe to invest in. But of course, only by first being in compliance,” Nilsen says.
Sorenson agrees. “You always have to have a notary in any property transaction in Indonesia. We had a notary,” he says.
Sell first, but later
Sorenson concedes Golden City did not own the land when he and Barry began leasing it to foreign investors in 2016.
“Instead of using the banking system, we created a community of investors,” he says, explaining how Golden City sold leasehold titles to foreign and local investors on land they did not yet own. They then pooled those funds to buy the land.”
Nilsen says he is familiar with such schemes.
“I have heard of it in the past and in most cases, it …does not end well. Regardless of the intentions, this may very well be seen as fraud by Indonesian authorities,” Nilsen says.
Sorenson claims there is “there is no money left” in Golden City’s bank accounts. About US$250,000, he says, has been returned to investors who wanted out of the project while the remaining millions have “all been spent”.
The lead plaintiff in the class action lawsuit, Christopher Smith, who invested US$500,000 confirmed he is one of the recipients of the refund, pocketing about US$50,000.
“We have about 60 to 70 different land certificates. Roughly US five or six million dollars’ worth,” he says. “We also built a lot of infrastructure. We spent about US$100,000 just to connect the site to electricity.”
Sorenson says the project is going full-steam ahead and sent news.com.au evidence in the form of photos of two concrete slabs and one wooden frame being built on a beach that appears to be the site of Golden City in Sumbawa.
Sorenson adds: “All the investors knew we did not originally own the land. Otherwise, we would have to have used banks.”
But investors, who have joined the class action and spoke to news.com.au, say otherwise.
“It is a complete lie. They sold us a portfolio that said they already owned the land,” says Michael Northcott, a professor emeritus of environmental theology and ethics at the University of Edinburgh who invested US$30,000 with Golden City.
“It’s a horrible lie. [Sorenson] pointed out all the land as he was showing it to me, same as shown on the Golden City brochure, and said that’s Golden City and we are buying more land,” adds Victoria Holmes, who invested US$16,000.
A former investment banker who lives in San Francisco and invested US$63,000 in Golden City, Mimi Aye says exactly the same thing,
“It’s a lie... he lied to me about the number of investors and how much money he had raised,” claims Aye.
Sorenson has already admitted to lying to investors about how many plots had already been sold at Golden City posted on his YouTube channel ‘The Golden Alliance’.
“I want to clarify to you that there is something that we did that was fairly dishonest,” he said in the video that has now been deleted. “I should have lived more in my truth and I should have had more strength in you and more faith in you guys not to have done that.
“I’m going to tell you why [I lied] … When you see the chart that says fully ‘sold out’ yes, it wasn’t sold out from us. It’s land that has already been sold to others and that was outrageously priced and that we couldn’t afford to buy, but we didn’t want to divulge [that].”
Stirred up like a mob
Not all the investors at Golden City feel they have been fleeced by the developers.
“I am one of the small investors who have spent a long time in Sumbawa and witnessed firsthand what is happening there,” says Lukas Chlumecky, an investor from the Czech Republic who purchased six plots at Golden City.
“Many buildings were built, a factory, a village for employees and much more.
“A large amount of hectares of land was purchased and the truth is that some of them temporarily remained in semi-transition, but they were paid for and they are just waiting for the creation of a certificate to complete the process.” He adds: “I know both Brett and Yansen Barry and their families very well and I can tell you that it is impossible for them to do anything illegal.”
Dan Blancer, an American software consultant who also purchased six plots of land at Golden City voices similar sentiments.
“Golden City was always a speculative investment and anyone who invested should have known that,” he told news.com.au. “I am not perfectly at ease with some of the things that have happened. At the start, some plots were marked sold and I found out that wasn’t true, the land was not bought. And maybe they tried to expand too much by buying too much land outside of the Golden City area.
“But I also do not agree with the lawsuit, it is like going to war and calling [Golden City] a Ponzi scheme. I think a lot of it is slander, a lot of the allegations are not true, and [the plaintiffs] have been stirred up like a mob. And now they are trying to get Brett arrested?
“For me, if the investment doesn’t pan out, it doesn’t pan out. I knew it was a risk... Brett can be intense and difficult to deal with, but his heart is in the right place. And like a lot of brilliant people, sometimes Brett doesn’t deal with people very well.”
That much is evident from listening to a voice recording obtained by news.com.au in which Sorenson discusses the lawsuit with Mark Lee, an artist who drew some of the early sketches for Golden City.
“If I see [the plaintiffs] I am probably going to get physical,” Sorenson said. “Give me three or four of them, I am not even a trained martial artist, but I will take them all out physically I swear to god. That is how much rage I have against these people.
“These f*cking Caucasian c*cksucker assholes that are in Bali, and they are running around like kings and queens in their villas and they want to tear down the villas at Golden City. Because of what? Because of some nasty speculation? Or for being total egotistical degenerates.”
Sorenson also expressed doubt he would receive a fair trial in the Southeast Asian island nation he calls home.
“God bless Indonesia, but sometimes it gets a little squirrely,” Sorenson says. “I know that we are being recorded so I don’t want to get in trouble with the Indonesian government, but there is corruption going on. With the right amount of money, they can persuade anything.”
The Australian director of MSR Global, a Bali-based international mediation agency that brought together the parties for the class-action lawsuit, Michael Lenihan, says it is “foolish” for a foreigner to make public declarations about corruption in Indonesia.
“He is a guest here in Indonesia and those comments are for intelligent and educated debates,” Lenihan says. “I can tell you by living and working here, the government and the authorities are working towards strong social reforms.”
Lenihan denies Sorenson’s claim that he “illegally” contacted Golden City investors to ask them to join the class action.
“I was asked to facilitate an investor’s concern about the investment conduct of Golden City as they were worried about their investment and the potential losses they may incur,” Lenihan explains. “It was my duty of care to support the distressed investor, which led to me speaking with a collective of investors who had very little or no contact from Brett or Barry about the condition of their investment and the money they gave in trust.
“Where has all this money gone? That’s the million-dollar question?”
A senior associate of Malekat Hukum, the Bali-based law firm running the class action, Lilo Agung also denies they went fishing for clients.
“We have never approached investors individually or illegally. The Investor-victims already have their own groups and coordinators when they approach us,” says Agung.
Ni Luh Arie Ratna Sukasari, a partner at the law firm, said she is confident the court will rule in favour of plaintiffs and the case will prove a watershed in Indonesia.
“The story will outlive the case as a reference point or legend about how Indonesia as a developing nation brought justice and certainty for foreign investors,” she says.
“This is not about the money for us. It’s about justice. And we will bring justice.”
Ian Neubauer is a freelance journalist.
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