business

In the last issue we looked at the basic fallacy of Tom McMurrain’s exaggerated promises of high profits for those who invest in his teak and noni farms


Tom McMurrain’s corporate shell game

If San Cristobal collapses --- or should we say “when” it fails? --- Tom McMurrain’s history and the way the enterprise is structured suggest that nobody will be able to touch the residue of any liquid assets.

At our meeting at the Hotel Bristol, McMurrain strenuously protested that he’s not a fugitive as the result of his Atlanta financial machinations. Yes, he admitted, a couple of his businesses there failed. Yes, he admitted, in the process a civil judgment for $145,000 was handed down against him. (A judgment, by the way, that despite McMurrain’s conspicuous spending in Panama to impress potential customers, remained unpaid at the time we talked.)

In a pair of articles by Okke Ornstein that appeared in The Panama News last year, McMurrain was called a “fugitive,” which the San Cristobal promoter protested was untrue and unfair. “I can travel to the United States,” he said.

However, a couple of investors who lost their money on Tom McMurrain’s Atlanta ventures did press private criminal charges, as can be done in Georgia, and in a response to The Panama News, San Cristobal attorney Barry Miller effectively admitted that, but dismissed the charges as “merely an attempt to criminalize a matter that would normally be the subject of civil litigation.”

In a later email to The Panama News, Miller objected to being identified as the attorney for San Cristobal Land Development, a Panamanian corporation. Rather, he argued, he’s the lawyer for San Cristobal International, a British Virgin Islands corporation that owns San Cristobal Land Development.

It theoretically could make a big difference. Miller is licensed to practice law in Michigan, but not in Panama. One source tells us that Miller is the drafter of the contracts that buyers of McMurrain’s teak and noni plantations sign, and if that is true it would suggest that he’s improperly practicing law in Panama without a license, but Miller claims that all of San Cristobal’s Panamanian legal matters are handled by Panamanian lawyers.

But shouldn’t such legal distinctions amount to a red flag for purchasers?

If San Cristobal goes under and its customers go looking to get their money back, would the assets be in the Panamanian subsidiary, San Cristobal Land Development Inc, or the British Virgin Islands parent company, San Cristobal International?

Or would the assets have been transferred to one of McMurrain’s and San Cristobal’s other related Panamanian companies, like the subsidiary set up to manage the plantations, Real Property Magazine, Golden Eyes Strategic Advisors or the Bocas Business Association?

This reporter lacks the gift of prophecy, but from the years that he practiced law he does have the experience of chasing down fraud specialists who frustrate their victims’ attempts to get compensation by way of corporate shell games. And if that is McMurrain’s intention here, the legal structure is already in place to play that way.

When pointed out, evidence tends to disappear

When this reporter met with Tom McMurrain at the Hotel Bristol, the latter demanded an explanation of why an editor would approve Okke Ornstein’s stories without checking the facts. It was explained to McMurrain that not only was there a prolonged exchange of questions and demand for documentation from Ornstein, and not only did Ornstein --- and later, this reporter --- give McMurrain and San Cristobal ample opportunity to answer, explain and put their side of the story onto the record. It was explained to McMurrain that as part of the pre-publication process this reporter spent many hours reading everything available about San Cristobal on the Internet, most especially San Cristobal’s own promotional literature.

Two of San Cristobal’s claims, this reporter told McMurrain, did not meet “the smell test.”

The first was the bandying about of dubious figures --- at the time, the promise was being made that investors in McMurrain’s plantations would receive “20 to 30 percent per annum” return on their investment. After our stories ran last year, that claim was somewhat modified, although a version of it remains central to the San Cristobal online pitch.

The second was the assertion that now is the time to buy at San Cristobal’s Palmira development, at the extreme end of Colon’s Costa Arriba adjacent to Kuna Yala, because the road to Kuna Yala would soon be paved. There is no road from Colon to Kuna Yala. Nor, for that matter, is there a road in the normal sense of the word to Palmira --- those with sufficient double-traction off-road vehicles might ford the Cuango River when water levels are low enough and get a bit farther up the coast, but ordinary cars go no further than Cuango. Past Portobelo the road along Colon’s Costa Arriba to Cuango is unpaved and has been for many years. At the time McMurrain made his statements --- and until September 1 --- that area was represented in the Legislative Assembly by a PRD ally and the Moscoco administration has never had any plans to invest in the pavement of the road past Portobelo. Whether the incoming Torrijos government will change that policy is a matter of conjecture.

When confronted about the advertising claim that the road to Kuna Yala would soon be paved, McMurrain brushed off the question with the statement that “Palmira’s not in Kuna Yala.” He did not deny making the representation in question.

A few days before the meeting at the Bristol, the road paving claim was still available on the Internet. When this reporter checked back a few days afterwards, that claim had disappeared from cyberspace.

Shortly after that, virtually all of Roger Gallo’s amazing tales about San Cristobal also disappeared from the web.

For example, go to EscapeArtist.com’s online archive for March of 2003 --- http://www.EscapeArtist.com/efam/44/efam44.html --- and you will find an abstract that says:

“Panama Teak Plantation Seminar Announcement - Panama Tropical Farms ~ Teak Wood & Exotic Fruit Goes Beachfront - Teak Wood & Exotic Fruit Goes Beachfront in Panama - The entire Bocas del Toro Teak & Noni project is now sold out. However, Tom McMurrain and the SCLD team have a new project. If you'd like more information on the new project - Tom has designed an investors seminar about his latest project. The Panama Smart Money Wealth Seminar will be held May 21-25. Don't miss out again. Many of the original purchasers of Teak & Noni waterfront plantations have already been offered a premium price over the price they paid just a few months ago. It is obvious that Tom's concept is a winner.”

Hit that link and you get the following message:

"We are sorry about that, but on a very large website like ours it occasionally happens.”

Many of the San Cristobal press releases and pitches from publications other than EscapeArtist.com, though their abstracts can be found via a Google search, now similarly bring up missing messages when the links are tried. See, for example, http://www.prweb.com/releases/2003/12/prweb95371.php.

Which, of course, sets up the inevitable “I never said that” and “it’s my word against his (or hers)” routines that lawyers who deal with fraud cases hear time and again.

Explanations and claims of innocence are almost always proffered in such situations, but the bottom line is that someone caught in the act of making flagrantly fraudulent misrepresentations almost always stands to be the beneficiary when evidence goes missing.

Except, of course, when there are proofs that were copied and preserved before they were taken down from the Internet.

“He’s not with the company anymore”

In Okke Ornstein’s stories about San Cristobal, he tells of threats by one Tom Lennon, who was one of McMurrain’s top lieutenants at the time. Things that Lennon said and did on behalf of San Cristobal played a large part in those stories.

After the first story was published this reporter also received a number of emails from Lennon. Although the possibility of legal action was suggested in Lennon’s emails to this reporter, which were obnoxious from a journalist’s point of view mainly because they demanded the revelation of the identities of confidential sources, it would be an unfair stretch to call these communications “threatening” in any criminal sense of the word.

However, many months later when this reporter met McMurrain, one of the first subjects that the latter raised was Lennon. “He’s not with the company anymore,” McMurrain pointed out.

As if Lennon hadn’t acted on San Cristobal’s behalf.

And here again, we have a cliché that every lawyer who tries fraud cases hears time and again, a ploy that was ancient when Machiavelli wrote about it: the principal denying the subordinate’s agency. But of course, Lennon was working for McMurrain and San Cristobal, and notwithstanding the expected denials he was their agent in his dealings with this newspaper.

It would not take a wild imagination to expect that if push comes to shove in a court of law about the claims discussed in this series of articles, McMurrain would also likely disavow the sales pitches made by Roger Gallo, Dennis Smith and others to promote San Cristobal.

San Cristobal plays political cards

Foreigners who find Bocas del Toro to be an attractive place to retire and invest may not know about the ins and outs of Panamanian politics and the tremendous corruption that this country has seen during the current administration. Thus to them, politicians’ endorsements of San Cristobal Land Development might be impressive indeed.

For example, such people might not know that First Vice-President Arturo Vallarino has all but been purged from his own MOLIRENA party, exercises little influence in government or with the public at large, and is retiring from public life when his term is up at the end of August. Thus they might be overly impressed by San Cristobal’s September 1, 2003 press release about Vallarino’s visit to SCLD and a dinner held in honor of the vice-president and several other public officials by Tom McMurrain.

“A special dinner was held at Swans Cay Hotel,” the press release said. “Attending were several officials from government agencies with which SCLD has worked.... Bocas Mayor Eladio Robinson... pledged his ongoing support for SCLD and the Bocas Business Association, which SCLD founded....

“Mauricio López the Director of IPAT... in Bocas del Toro recognized SCLD’s efforts... López stated that ‘Bocas is a better place to live than it was a year ago because of three of San Cristobal’s initiatives: Clean Up Bocas Day, the Bocas Angel Patrol and Bocas Against Drugs.”

On March 5 of this year, the Bocas city council pased a resolution calling upon the governor of Bocas del Toro province to suspend Mayor Robinson from office and filed a complaint with Administrative Prosecutor Alma Montenegro de Fletcher. Robinson, who was elected in 1999 on the PRD, Solidaridad and Liberal Nacional tickets, is accused of trying to remove a fishing cooperative from the Isla Colon beach from which it has been operating for many years in order to give the beach to foreign investors. Robinson did not run for re-election this year.

And what of Mauricio López and the Bocas Angel Patrol and Bocas Against Drugs organizations that he hailed? According to an April 3, 2003 report by the Bocas del Toro Police Zone of the National Police, Tom McMurrain “has associated with the regional director of IPAT to create a vigilante group” --- the Angel Patrol. The report goes on to identify what it describes as five well known local hoodlums who are part of this vigilante organization, and to accuse the group of selling drugs to tourists from the patrol’s SUV.

López was the Mireyista candidate for mayor of Bocas in this year’s election, and counted McMurrain among his supporters. But along with most candidates on President Moscoso’s slate, he was soundly thrashed.

In this period of Panama’s national existence, many public officials can be bribed to do just about anything. So when McMurrain promises reforestation certificates, residency visas and even dual citizenship to buyers who would not qualify for such things under this country’s laws, there is always the chance that politicians or government bureaucrats have been bought off to improperly hand out such benefits.

(Has the National Environmental Authority (ANAM) in fact issued reforestation certificates for McMurrain’s developments on San Cristobal Island or elsewhere? The Panama News has repeatedly posed this question to ANAM and has not received an answer from them.)

However, against the possibility that McMurrain’s political string-pulling may have worked to the benefit of people who have bought into his schemes must be weighed the reality that all of the public officials who attended McMurrain’s dinner party last year will be out on the streets looking for new jobs on September 1. Permits and benefits improperly granted by one administration may well be withdrawn by the next one. Moreover, as the incarcerated “offshore asset protection guru” Marc Harris learned, once a hustler gains a certain level of notoriety a change in government tends to drive the price of official protection way up.

Self-proclaimed, but not everyone’s buying

Of his teak and noni plantation venture, Tom McMurrain says: “Adding in the Noni was a stoke of genius on my part, if I may be so bold, as I had used Noni myself to overcome a debilitating illness.”

Genius?

No way. Tom McMurrain is no Albert Einstein, nor even a Charles Ponzi.

Anyone who has regularly shopped at Panama City’s El Mercadito, where many vendors sell medicinal plants, may have noticed that the retail price of noni is down (you get 10 noni fruits for a dollar these days), as is the number of vendors who sell the stuff.

No, a speculative bet on a commodity market doesn’t make McMurrain a genius.

He’s just another garden-variety hustler.




Also in this section:
Business & Economy Briefs
Gas prices up, bus strike possible
Anatomy of a Scam, part 4

Back to top

Panama Information, Hotels of Panama - Executive Hotel
Panama Information, Real Estate in Las Cumbres - Villa Concordia
Panama Information - Online guide to information about Panama - www.panama-information.executivehotel-panama.com
Panama Tourism - Online info for the Tourist Panama - www.travel-to-panama.com
Panama Pictures - Collection of pictures of Panama - www.panama-pictures.com