Costa Rica: Paradise Lost
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MIAMI (CBS4) – In 2007, Warren Bennet believed he found paradise. Located along Costa Rica’s Pacific coast, the 665 acre property is complete with waterfalls, lakes and natural streams, as well as birds and butterflies in every color imaginable.
“Anybody that wouldn’t love that place has got to be crazy,” said Bennet, who first visited the development in 2007. “After I went and viewed the property, I wanted to invest even more money.”
An oil rig worker in the Gulf of Mexico, Bennett invested more than $200,000 in the project known as Hacienda Matapalo. The president of the development company was David Matluck.
Laura Gdowik, who worked for Matluck for nearly five years as a sales representative, estimates there are at least 200 individuals who invested in Matluck’s company, Pegasus Star Limited. Total amount she said was given to Matluck – close to $21 million.
“It crushes my heart every day,” she told CBS4’s Jim DeFede.
Since 2007, not a single home has been built nor has a single deed been issued.
“I am here today speaking with you because I would love for all the clients involved in this project to get restitution,” she said.
Bennet also said he was frustrated.
“I don’t want to lose over $200,000 that I worked hard for in other countries,” he said, his exasperation evident. “Lord knows man, blood, sweat and tears to get to that point. And then lose all of it. I don’t know how else to say it man.”
Even Gdowik bought into the project, investing more than $60,000 as a down payment on a $330,000 condo that was supposed to have been built more than a year ago
Asked where she thinks her money went, Gdowik responded: “Jim, if I knew that, I’d like to get it back.”
New Jersey physician Joseph Cervone invested more than $200,000 with Matluck.
“Is this mismanagement or is there something fraudulent going on?” he asked.
While Matluck was a marketing genius, Gdowik said the key to the development was Michael Starkey, the company’s vice president for sales and investments. Starkey developed a way in which the folks who didn’t have the cash to invest in Hacienda Matapalo could instead tap into their 401ks and retirement accounts to finance the purchase.
“Michael was able to help these people see that they could use their IRA to do this,” Gdowik explained.
“He said ‘Man you can use your IRA’, so I did that, I signed it all away,” added Bennet.
Videos on the Hacienda Matapalo website assure investors that using their retirement money is a good way to guarantee their future
“Has Wall Street stolen your future, recoup those losses by seeking out better alternatives,” exclaims an announcer on one of the videos. “Replace those unstable, losing investments in your retirement accounts with appreciating, income producing and more stable investments like real estate. Learn how Hacienda Matapalo, a gated community on Costa Rica’s South Pacific coast, can give you both financial freedom and peace of mind in a place they call paradise.”
Of course there is no “gated community.” The images used in the video are either computer generated or architectural drawings of the as yet un-built development.
“I thought it would be a nice investment for my grandchildren, something to leave them,” said Bernadine Dest, a 68-year-old occupational therapist.
When CBS4 News first spoke to Dest, she came to provide moral support a friend and co-worker who had invested more than $100,000 with Matluck.
During that first meeting, she told us her money was safe. She explained how Michael Starkey showed her how to take $30,000 out of her retirement account and move it into a trust where the money would be held. Dest, who works two jobs, said she was assured if she ever changed her mind about the investment she could just take the money back.
“I didn’t lose anything yet,” she said.
Documents obtained by CBS4 News tell a different story. The records show that as soon as Dest deposited her money into the equity company in 2007, the money was transferred to Pegasus Star Limited – the company controlled by Matluck and Starkey. When we gave copies of these papers to Dest she was crestfallen.
Adding insult to the experience, she now realizes she has been paying $350 a year since 2007 to the trust company, a company recommended by Starkey, to manage an account containing just $1.
“I’m sick, I’m sick,” Dest said, holding back tears. “This was for my grandkids.”
She said she’s been distraught ever since she learned the truth. She’s afraid to tell her husband, who is seriously ill with a heart problem.
“He’s going to have a fit,” Dest said. “I just hope something can be done. There are a lot of trusting people out there.”
The contracts signed by Bernadine and the others do allow the developer to use their money for whatever expenses the developers deems necessary.
But the agreements also state that if the developer doesn’t complete the project by a certain deadline, then the developer has to refund the money. Most if not all of those deadlines have long since passed and when Warren Bennett and the others say they have asked for their money back – they say they’ve been told there is nothing left.
“Where’s the money? Where is this money?” asked Gdowik. “Why today have they not built one single solitary home? What do you do with $21 million?
Diann Feleppa, another investor in the project, has her theories.
“I think the money went on their lavish lifestyles, on partying, on fancy cars, on fine China, on trips,” she said, adding that Matluck and other company officials flew to China several years ago claiming they were looking for material that could be used in the project.
“David told me, ‘Oh they can get stuff really cheap in China’,” Feleppa said.
Joe Cervone, the New Jersey physician, said at this point he doesn’t think he’ll ever get his money back
“I’m still able to work thank God, my wife is still able to work,” he said. “But you know, we’re really interested in trying to prevent this from happening to other people. With David still trying to borrow money from us a couple of months ago, I’m just concerned that this is going to happen to someone else that may not be as well equipped to earn a living anymore.”
“Everyone that invested in Hacienda Matapalo, they sold them a dream, that’s my bottom line,” said Bennet.
And what did they deliver?
“Nothing,” he said, “nothing but a bunch of broken promises
Hoping to find answers, CBS4 News visited the building on Oakland Park Boulevard that, according to Hacienda’s website, is the home to Pegasus Star Limited. But we found no sign of the company inside.
Both David Matluck and Michael Starkey denied our repeated requests for an interview.
In emails to investors, Matluck claimed the money was spent on costs associated with the project but he has refused to provide an accounting of where the money went.
Last week, the Hacienda website announced that there was now new ownership in the company and that Matluck was out.
The new owners, a Costa Rican company, claim Starkey remains with the company to help guide them through the transition.
It is not clear if any of the existing investors, like Warren Bennet and Bernadine Dest, will have their contracts honored or will be offered refunds.
The website claims the new owners are still hopeful the project can be built.