Tom McMurrain's San Cristobal crashes just like his other scams
"We eat when we're not hungry, drink when we're not thirsty. We buy what we don't need and throw away everything that's useful. Why sell a man what he wants? Sell him what he doesn't need. Pretend he's got eight legs and two stomachs and money to burn."
Harrison Ford in The Mosquito Coast
Avid readers of Escape Artist Roger Gallo's Offshore Real Estate Quarterly will no doubt have noticed a remarkable offer to buy a tree house in the Panamanian province of Bocas del Toro.
The article, which is full of the sales hype we know from Roger Gallo, does not mention San Cristobal, but the reality is that the luxury bird nests are the latest brainchild of embattled Tom McMurrain and his people. The unsuspecting reader who decides to fill in the form for more information receives a brochure and a reply from sales director Peter Ernst.
No promise goes too far to sell these tree condos. Gallo promises buyers "no inclement weather" (two sources in Bocas reported big trees falling down during storms and recently Bocas was declared a disaster area because of heavy floodings) and "no criminality" - a statement that has the locals rolling over the floor laughing.
Buyers are further lured by the promise of a "rental management program" in which the house is rented out for $300 per night, and San Cristobal claims to have a waiting list with prospective tenants. McMurrain just wrote prospects that he had personally been cutting and clearing the property, and now that he has finished waving the machete he recommends installing air conditioning in the trees, while sales director Peter Ernst in all seriousness confirms that the tree houses can be equipped with an elevator should one so desire.
The Meaning of Tree Houses: Life in the Big Bight Plantation
Imagine a view of the beach on Isla Colon island in Bocas, deserted except for John Cleese in a 3-piece suit sitting behind a bare desk in the sand except for the phone on it. The tide is coming in around Cleese and the desk, he calls it a day, dons his bowler hat, grabs his umbrella, does a strange silly walk across the beach and mounts a golf cart. He rides off the beach and passes a cheese shop with a Greek Buzuki player sitting outside.
Riding into the rainforest, in the lush undergrowth looking all serious, he hears singing, "I'm a lumberjack and I'm OK, I sleep by night and I work by day" and he rides past a group of Canadian lumberjacks, busy preparing the forest for new treehouses.
Cleese arrives at a big cacao tree, gets out of the golf cart and does the very silly walk over to the tree where an elevator descends with a ringing bell. The door opens and Michael Palin is the elevator operator, Cleese walks in, turns & says "third floor". The door closes, elevator ascends. At the third platform of the cacao tree, the elevator stops, the door opens and Cleese is now dressed miraculously in Tarzan loin cloth and bowie knife, yet he still has the bowler hat on his head and umbrella by his side.
Cleese grabs a vine and swings into the canopy, "I'll be the best ape ever!" Michael Palin picks up a megaphone and shouts the Tarzan scream into it "AHHHRRGGHHH" as Cleese swings from tree to tree before arriving at a distant treehouse where a woman greets him with a horrible raspy voice, rollers in her hair, scarf on her head, flowered dress and doc marten boots. It's Eric Idle dressed as a woman.
"Whats for dinner dear" says Cleese,
"Spam & noni juice" rasps Idle,
"Again?" retorts Cleese,
"Yes, and bad news, we're being sued by the homeowners association and our neighbors at tree number F7. Our pet Albatross keeps defecating across the property line".
You may think this short scene of Monty Python's Tarzan lifestyle is a joke, but over at San Cristobal they're serious about it.
The tree houses are designed by the new British joint venture partner of the noni tubbies, a company called BlueForest. They will also supervise the construction and the selection of suitable trees, or so they claim. Asked by several prospects about the fraudulent activities of San Cristobal and McMurrain's checkered past in Atlanta, BlueForest replied that they were "worried" and "investigating."
When E-One, McMurrain's payday loan business in Atlanta, went under, he did one last round of fund raising before he disappeared in the middle of the night to Costa Rica. The tree house scheme appears to be something similar, a final attempt to generate desperately needed cash while leaving San Cristobal's tainted name and reputation out of the sales publicity, with again the kind - and no doubt costly - cooperation of Escape Artist Roger Gallo.
But wait a minute. "Final attempt", "desperately needed cash" - are things that bad with San Cristobal? How come? What happened with the miracle noni cash crop?
San Cristobal in hiding
We're writing July 2004, almost two years after San Cristobal's inception, and all the signs indicate that fugitive Tom McMurrain's noni empire is going down the same path as E-One, Global-E-Tutor, the Magna Societal and a number of others, with investors losing all their money and McMurrain nowhere to be found.
"A year has flown by and our lease is up!" writes Barbara Bachus of San Cristobal to clients, "please be advised that we will be moving our offices on May 28th to June 5th." The move is explained by "upcoming expansion" in the - as always - up-beat email.
But the lease wasn't up, they didn't pay the rent and were forced to leave. The offices in the building on 50st Street in Panama City are empty now, and in the dark one can still make out the "San Cristobal International" sign behind the reception desk. It must have cost some money, that sign, not something you'd just leave behind. But the sign is not the only thing that had to stay, the owners of the building reportedly seized computers as well against the outstanding debt.
San Cristobal does not appear to have moved to other offices. A written inquiry about their new office address did not get a reply. The old phone numbers are not being answered. Observation of McMurrain's residence did not reveal any activities going on that normally characterize a work environment. Sales Director Peter Ernst asks clients to call him at 226-5884 or 226-2675, which are different numbers than that listed for San Cristobal 322-0913. The only sign of life I've seen was when entering a restaurant in Panama City where director Barry Miller and Tomas Cabal were having a meeting at a table in the back.
Are they on the run?
They have every reason to be.
The Noni Disaster
Investors in San Cristobal's "Tropical Working Farms" are beginning to wonder why the returns from the miracle noni cash crop are not flowing in yet. After all, McMurrain claimed that their plantations would produce the first noni in a year, and many clients bought their piece of paradise much longer ago. And, didn't McMurrain already in 2002 say that he was selling 6,000 pounds of the fruit per week at a price of over 50¢ per pound? Shouldn't that number have grown spectacularly with all the clearing and planting of the properties that they claim has been done?
Per acre, says Tom McMurrain in a legendary Roger Gallo sales pitch, we plant 400 to 450 noni plants. Since each plantation has 10 acres, that's at least 4000 plants per plantation.
As early as February 2003, San Cristobal claimed to have sold about 40 plantations (different employees stated different numbers between 30 and 65, and sales director Peter Ernst claimed on June 10th 2004 that "over 50" satisfied clients had bought a Tropical Working Farm). But, sticking with the number of 40, that would mean that a minimum of 160,000 noni plants have been planted. No small task indeed.
These plants, still according to Tom McMurrain and Roger Gallo, produce 100 pounds per year to start with (Gallo: "Just add water"). In McMurrain's own words: "The Noni will start as a 5-month-old seedling and it can start producing fruit in its eleventh month. In the first year of full production it can produce over 100 pounds, in the second year 200 pounds and in the third year it can produce up to 400 pounds of fruit per plant. By the 18th month 4,000 Noni plants have the ability to produce 400,000 lbs of fruit and that is just the beginning."
They haven't fully grown up yet, so to be on the safe side of McMurrain's predictions let's assume they're producing half of that, 50 pounds a year.
If everything is true what San Cristobal has claimed over time and being careful on McMurrain's numbers, these plantations should now be carrying 8 million pounds of noni per year.
McMurrain, in the same article, says that noni needs to be harvested every two weeks, so that is 8 million divided by 26, is 307,692 pounds of noni that should currently be available in Bocas del Toro. Roughly 150 tons. According to McMurrain, who said that he was selling 6,000 pounds per week already in 2002 at 50¢ per pound, that represents a value of $153,846. Every two weeks!
But nobody in Bocas has seen any massive harvesting operations going on, or any trucks moving these mountains of noni to be sold. Neither did any bulk carriers ply the shallow waters of the Bocas del Toro archipelago to load the precious fruit. The noni, as far as there is any, is rotting away.
And it will get worse, because the amount of noni coming from the plantations will raise to a whopping 64 million pound in the third year, according to McMurrain's projections. That should, using figures from the University of Hawaii, be enough to produce 3.2 million gallons of noni juice. The 40 plantations will altogether produce 2,461,538 pounds every two weeks, good for at least 125,000 gallons of noni juice.
Noni Numbers don't add up
To complicate things further, the figures provided by San Cristobal and Roger Gallo are rubbish, pure lies that have no basis in fact whatsoever, like everything else they publish about these plantations.
First of all, the number of 400 or even 450 plants per acre is way too high. The University of Hawaii - where a lot of noni is grown and processed - calculates with a maximum of 290 plants per acre, in optimum soil conditions. Bocas doesn't have these optimum soil conditions. And the yield of these plants is also grossly inflated by San Cristobal. The first year, no more than 2 pounds per plant per month is produced. Only at year 3 is 96 pound per year reached. And that is, says the University, based on "excellent farm management practices and growing conditions." The claim of 400 to 450 plants per acre while experts note an absolute maximum of not even 300 does not suggest "excellent farm management practices" on the part of San Cristobal. Earlier, it turned out that those responsible for land management, did not know what agricultural basics like "drainage" mean.
Where did all the noni go?
But still, with 160,000 noni plants, there should be 320,000 pound of noni ready to be harvested and sold every month now. At McMurrain's 50¢ per pound, that's $160,000 coming in monthly, of which half goes to the 40 investors according to the contract. They should each be receiving a cheque by now of $2,000 every month.
But McMurrain can't sell all this noni. He may be able to sell some small quantities to local supermarkets, but that's about it. The two bigger Panamanian noni juice producers don't need McMurrain's noni because they have their own plantations, the author was informed. And contrary to what McMurrain leads his investors to believe, you can't ship fresh noni over larger distances, as the fruit contains too much water.
Professional noni growers know that noni needs to be processed before it can be shipped anywhere. That used to be done by freeze-drying the fruit, but since some ingredients are lost in that process the method of choice these days is to make juice or powder close to the location where the noni is grown. So, does San Cristobal have access to a fruit processing plant where these enormous amounts of noni can be turned into juice? No, they have not. And they don't have the funds to build such a factory, especially not since investors were promised a marina, a yacht club, golf courses...
And even if they set up a factory to produce noni juice, the market asks for noni products from the Pacific (Tahiti, Hawaii), especially when talking about large volume.
Nobody wants McMurrain's noni
Apart from these practical difficulties, it remains very much to be seen if there is a market for these quantities of noni, processed or not. In the Dominican Republic, where noni grows abundantly, noni is given as food to pigs, a newspaper reported. The government of Jamaica is currently looking into medicinal plants as a source of revenue, but has not made noni an important part of this initiative for economic reasons. None of the major fruit markets in the US lists noni as a fruit that's being traded. And Pacific Magazine reported already in 2002 that the noni market was crashing.
The ultimate proof that San Cristobal doesn't know what to do with its noni comes from themselves. On December 16th last year, looking for a buyer, they posted a message on a bulletin board stating that they had a plantation and could produce 100,000 pounds of fruit by March this year.
So what happened to all these buyers that were lined up already in 2002 when McMurrain said: "A Chinese group offered a 300,000 pound per month contract and we are talking to a European cosmetic company about a 2-3,000,000 pound annual contract. We can sell every bit we produce"? That, again, appears to be another lie. There are no contracts with Chinese groups and European cosmetic companies.
In a press release of 2003, former head of land management Marcel Gründmann is quoted as saying: "“Conservatively, we expect our plantation owners to begin seeing profits from their medicinal plants by early 2004.”
It's July 2004 now, three months after McMurrain said he could deliver 100,000 pounds, and now San Cristobal says they are awaiting the first harvest. It's almost two years after McMurrain claimed he was already selling his noni at incredible prices - and none of the investors has seen a cheque yet.
The whole noni scheme is, conservatively, a disaster and investors have plain and simple been ripped off.
But McMurrain, undaunted, continues to uphold the appearance of success at all cost. One source in Bocas observed a crate in the Bocas airport. It was labeled Noni for export from San Cristobal, Fragile, Express - the crate looked very impressive. Then McMurrain entered the scene pointing the crate out to new prospects as he picked them up at the airport.
It was later found out that McMurrain was paying some of the airport staff "rent" for his dummy crate of noni to sit in the airport at certain times.
It was empty.
The dubious role of Escape Artist Roger Gallo
The vast majority of the sales of the Tropical Working Farms were generated by Roger Gallo, of Escapeartist.com. On his site, a clever mix of information and dubious real estate sales hypes, San Cristobal was extensively promoted. Gallo, who set up his company with help from convicted money laundering guru Marc Harris and is closely connected to Agora's International Living, which in its turn is currently in hot water with the American SEC, received $25,000 commission per sale in 2002, documents show, which makes him in fact a broker.
However, Gallo doesn't have a real estate brokers license in Panama, and his activities may very well be illegal.
That did not stop him from promoting the noni investment scam with "I'm going to elect you for the Escape Artist best investment of the century award." And indeed, while investors will most likely have lost their money, the time it took Gallo to write his sales pitches for fugitive hustler Tom McMurrain may very well have been the most rewarding investment he ever made for himself.
Roger Gallo, when asked about his involvement with San Cristobal, replied: " .... no one got cheated. You are just blowing smoke, trying to create deversions. You aren't a match for a true writer. You have legs of clay. You are simply working for a bunch of people in Bocas who can't sell their product because San Cristobal has outdone them on sales."
And continues: "Did you know that okkeornstein.net is available. I think it's a good domain... I might as well buy it."
And concludes: "I want to see you in a Panamanian prison getting what you deserve."
Which is all fascinating but doesn't answer any questions.
The only comment worth mentioning because of its entertainment value that Tom McMurrain sent me was "if I was a fugitive Okke living in the neighborhood that I do and my wife being an art teacher for three years at a prominent school…don’t you think I would have been arrested?"
They obviously have never heard of Brent Wagman.
With thanks to Patricio de la Oaxaca who contributed to this report, as well as others who will have to remain unnamed here.
Note: As always, I tried to obtain the version of the subjects of this story. BlueForest has not replied to my emailed questions. Neither McMurrain nor Barry Miller replied to questions about the noni harvest and sales. Finally, questions about the tree house project sent by the author to Roger Gallo and Tom McMurrain were met with a flurry of insults, death threats and vitriol from these gentlemen, their drug dealing employees and their PR consultant Tomas Cabal.
Furthermore, Roger Gallo turned his bizarre theories about me into a fake "investigative report" which Tomas Cabal distributes by email.
Eventually, the treehouse sales pitch was pulled from the web.