Paragon Properties of Costa Rica is a rip off artist of the first magnitude. They use outright fraud and misrepresentation of facts to lure unsuspecting clients into submitting large deposits for land purchases with the promise that they have absolutely nothing to lose. Paragon operates a high pressure telephone solicitation business that promises that after clients have put down their deposits, they have six months to go visit their property. If the client doesnt like their choice of property they can exchange it for another of like value or they can request a full refund of their deposit. If they do neither, they have five years to pay off the balance of their purchase, and if they decide not to go through with the purchase after five years they will still get their deposit back. Nothing to loose! WRONG!!!
In April I viewed a national television advertisement run by Paragon Properties of Costa Rica and responded to it by calling their 1-800 telephone number. Paragon representatives answering the telephone took my contact information and mailed me a marketing package of maps and information through the United States Postal Service.
Included in the marketing package received by US Mail were large 27 x 39 inch colored maps of various areas under development by Paragon Properties in Costa Rica, including a map of the Heights of Pacifica Phase 3 and a map of Playa del Mar which, according to the Paragon representatives were selling out quickly. I was told that one acre lots In Heights of Pacifica Phase 3 were selling at $65,000 with $25,000 down and five years to pay the balance. One hectare (2 acres) lots in Playa del Mar were selling at $85,000 with $35,000 down and five years to pay the balance.
I was told that new developments on the drawing boards were already being priced at upwards of $125,000 and I was told Id better hurry or theyd be sold out.
I was concerned about the road access and conditions, as my brother and sister in law had visited Costa Rica on vacation a few years previously and had reported terrible highway and road conditions.
I was assured by Paragon representatives that extraordinary progress had been undertaken by Costa Rican authorities to improve the roads and that a major highway connected Paragons properties with the capital city San Jose.
I was referred to a large 27 x 39 colored map they had sent to me of the central and west coast areas of Costa Rica illustrating their property developments at Punta Verde, Parrita, Puerto Caldera and Miramar. The beautiful colored map illustrates a bold, major highway in a bright yellow color running directly from the capital city of San Jose to the city of Parrita on the west coast. This boldly defined highway is even more prominently illustrated than the major Pan-American Highway which runs through all of Central America, including Costa Rica and which is illustrated on the same map in a brown color. My strong apprehension relative to highway access was thus ameliorated by Paragons printed color map and their representatives assurances regarding same.
In point of fact, this highway simply does not exist. It is total fabrication completely fraudulent and made up out of whole cloth. The only passage that runs between the capital city of San Jose and the city of Parrita is a loose combination of unimproved roadways and primitive tracts over the mountains illustrated on local road maps that can only be procured inside Costa Rica and identified as Passable only in summer and being passable by 4 wheel drive vehicles only. Paragon is guilty of Federal Mail Fraud here because they mailed these materials to me via the US Mail.
In telephone conversations prior to my agreement to purchase, Paragon representatives highly touted Paragraph #10 of their Agreement for Deed which obligated Paragon to construct a residential building on clients properties for the sum of only $75/sq ft. Which represents a fraction of construction costs anywhere in the United States. During my visit to Paragons office in San Jose, I learned that this extraordinarily attractive offer is blatantly fraudulent and misleading and that it grossly underestimates the actual construction cost because Paragon applies that $75/sq ft to the entire surface area of the roof, rather than applying it to the living area of the dwelling as expected based on common usage in this country. Based upon the limited number of designs offered by Paragon which utilizes wide eaves, soffits, overhangs, balconies, terraces, car ports, etc, this gross misrepresentation of fact understates the building cost by as much as 50%. This fact was not offered up by Paragon representatives at any point, nor did it appear in printed literature at the construction office. Had I not actively solicited this information at the time of my visit to their construction office, I would not have learned of this misrepresentation at all. This constitutes another fraud by Paragon.
In addition, Paragon representatives touted Paragraph #3 of the Agreement for Deed promising that they would have all roads and utility infrastructure in place within eighteen (18) months of client commitments. I visited Paragon developments that they advertised has having been sold out for more than that amount of time and there was no infrastructure in place other than gate houses at entrances. Paragon is in breach of contract here.
Paragon representatives gave me the names of satisfied customers and encouraged me to telephone them for their recommendations. Paragon failed to advise me that these satisfied customers were, in fact, compensated endorsers. Again, this is fraudulent practices.
After repeated telephone calls from Paragon representatives I stated that I was not interested in purchasing any land geographically removed from the more socially sophisticated and economically developed urban areas of Quepos and Manuel Antonio, which is where all of Paragons current development sites were located. Miraculously, I was advised that one lot in the previously sold out development known as The Gables had suddenly become available, and available at the original price of only $60,000 with $25,000 down and five years to pay the balance. The Gabels just happened to be the development closest to the urban areas of Quepos and Manuel Antonio and at the west end of that non-existent major highway illustrated on that fraudulent map!
I was told Lot # 70 was immediately adjacent to the lot where Paragons largest and most expensive model home was being constructed and that all the utilities were already in place. I was sent photos of the expensive model home under construction and the same photograph appeared on Paragons website and in their email updates to clients. When I arrived to visit this lot, I found that, not only had they constructed their largest model home on the adjoining lot, but they had constructed two additional model homes on the very same lot three model homes crammed onto the lot next door with their smallest, cheapest model right next door to the lot I agreed to purchase. Paragon is guilty of gross misrepresentation as well as omission of fact in this regard.
I was told that I could purchase Lot #70 for the original price of $25,000 down, with five years to pay the balance I could visit the property anytime within six months and that if I decided that I didnt wish to go through with the deal that I would get my deposit back immediately. I was also advised that even if I did not request my deposit returned and changed my mind at any time within the following five year period, that I would still get my deposit back at the end of that period so I really had nothing to lose.
Based on Paragons fraudulent materials and gross misrepresentation of the facts, I agreed to purchase Lot 70 in The Gabels. I submitted Paragons Agreement for Deed to their parent company, Premier Realty Sales as directed, and I mailed my check in the amount of US$25,000 on April 12 to Paragons Escrow Attorney, Charles Neustein, as directed by Paragons representative. My check was cashed immediately.
Subsequently, and within the six month window as specified by the Paragon representative, I flew to San Jose, Costa Rica on September 13 to meet Paragons local personnel, to visit their construction office, to inspect Lot #70 in The Gables and to check out the geographical areas of the country adjacent to the development. Paragon personnel met me at my hotel in San Jose on the morning of Thursday, September 14, ostensibly to lead me in my own rented automobile to visit Lot #70 in The Gables in the city of Parrita on the west coast. However, Paragons personnel instead led me to their construction office in San Jose, located in the western suburbs of same, during which time I learned of the misrepresentation regarding the claimed $75/sq ft construction cost.
Paragons local personnel then led me by automobile caravan to The Gables development to inspect Lot #70. I asked if they were going to take the super highway illustrated on the colored map that I had been mailed prior to my purchase, but Paragons personnel stated that we were already on the far west side of the city of San Jose and that it would be quicker and easier to continue on west and down the coast rather than attempt to negotiate back though heavy traffic in downtown San Jose. I accepted the explanation at the time and followed Paragons personnel to Parrita.
Paragon Director of Operations Les Masters telephoned me twice from his office in Florida while I was visiting Lot #70 on-site to determine my reaction to the development. I told Masters that I had serious reservations regarding the topography of Lot #70 which I had been unable to determine previously due to the fact that the colored topographical map of The Gables development, which had been promised to me and which I had stipulated was a condition to my agreement to purchase, had never been sent to me. Paragon is in breach of contract on this point.
In addition, I reported to Masters that I was very concerned that, rather than the top of the line model home being built next to my property, which I had been told was the case by Paragons telephone representative, Paragon was constructing 3 homes on the same lot, with the cheapest model home immediately adjacent to Lot #70. This significant item constitutes another misrepresentation of facts that were used to induce me to purchase Lot #70.
I also advised Masters that I intended to stay in Costa Rica for another week in a good faith attempt to give the country a fair assessment before returning home. After visiting Quepos and Manuel Antonio, I stopped to visit The Gables again on my return trip to San Jose September 21st, expecting to take the new super highway from Parrita to San Jose. It was at this point that I learned that the super highway did not exist.
When I returned home on Friday night, September 22 I conferred with my partner regarding the various elements of fraud, misrepresentation and breach of contract committed by Paragon and decided to request a refund of my deposit. I wrote Paragon on Friday night, September 22, the very night I arrived home, requesting a full refund and enclosing the duly completed Request for Refund form. The letter and form were mailed to Paragon on the first day on which service was available for Certified Mail with a Return Receipt, which was Monday, September 25.
Paragon Properties Director of Operations Les Masters denied my request for refund by letter dated September 27, claiming it had arrived a day too late. I wrote Masters on September 30 requesting that Paragon review and reconsider my request for refund lest I pursue legal action against them for fraud, misrepresentation of fact and breach of contract.
Paragon Properties Chairman William Gale telephoned me at my home on October 5 and berated me at the top of his lungs for a full five minutes, using every imaginable obscenity, at the end of which, however, he relented and promised to refund my deposit. Gale wrote to me on October 9 promising to refund my deposit of US$25,000 saying, Please be advised that the request will be processed immediately and we will do whatever is necessary to expedite this refund.
Since that time, in addition to countless telephone calls to Paragons office, I have written William Gale on four occasions; on October 26, on December 15, on January 9 and on September 13 without any response or result from Gale, Paragon or Premier and my deposit has yet to be returned by Paragon and/or Premier.
Paragon Properties of Costa Rica made false representations to me; Paragon knew these claims and facts to be false and misleading; these false facts, claims and misrepresentations were intentional and were meant to induce me to purchase their real estate; I acted in good faith reliance thereon; and Paragon caused significant injury to me as a result of the their fraudulent actions and misrepresentation of facts.in addition, Paragon is in breach of contract. I would never have committed to purchase Paragons property had I known about their material misrepresentation of facts and false claims prior to my commitment.
I have advised Paragon in a Certified Letter dated September 13 that if they do not return my deposit prior to October 30 I am prepared to file a Class Action Law Suit in US District Court on behalf of all clients similarly affected. I have already been contacted by six of Paragons clients who have requested refunds from them and have not received them.in addition I intend to file complaints against Paragon Properties of Costa Rica and their parent company Premier Realty Sales of Costa Rica with the U.S. Postal Service, the FBI, the FTC, the FCC and with the KY State Attorney General seeking an injunction to prohibit Paragon from doing business in the Commonwealth of Kentucky.
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