BlackRock Institutional Trust Company NA is one of the world’s leading providers of investment, advisory, and risk management solutions. BlackRock oversees $10 trillion, making it one of the largest money managers in the world. Blackrock was founded in 1988 by Larry Fink, who is the company’s chairman and CEO. James L. Grosfeld, former CEO and chairman of PulteGroup, Inc. was on BlackRock’s board of directors from 1999 through 2018, and held a substantial amount of BlackRock stock. Jason Grosfeld, James Grosfeld’s son, got his start in the business world working as an analyst for BlackRock after college.
Jason Grosfeld is the Founder and CEO of the Los Angeles based real estate firm Irongate, which describes itself as an “entrepreneurial full-service real estate firm specializing in the development of luxury branded residential and resort communities located in one-of-a-kind places.” Irongate and Jason Grosfeld have been the center of controversy for years, having been named in multiple lawsuits brought by disgruntled home buyers and business partners. In early 2009, dozens of angry buyers sued Irongate and Donald Trump for the return of more than $30 million in downpayments they made for condominium units in Trump Ocean Resort in Baha California, Mexico. The plaintiffs accused Irongate and Trump of fraud and misuse of funds, claiming that they were misled about Trump’s role in the project and were sold homes that did not exist and would not be built. A month later, Trump sued Irongate for $40 million, accusing Jason Grosfeld of failing to follow through on promises to build the five-star resort, at which units sold for $275,000 to $3 million, and misusing Trump’s name. Irongate settled the class action lawsuit in 2012 for $7.5 million. Since then, Irongate has been named in several lawsuits involving the development of the Trump International Hotel & Tower at Waikiki, in Hawaii.
Irongate’s latest controversy stems from its development of a 1,500 luxury resort in Costa Palmas, Los Cabos, Mexico. At least two buyers recently sued Irongate, Grosfeld and other Irongate employees for fraud, tortious interference with contracts and extortion in connection with multi-million homes they purchased in Costa Palmas. The first lawsuit, filed in the Superior Court of Los Angeles, California, alleges that Irongate and Jason Grosfeld are continuing their pattern of fraud from the Trump developments, taking millions of dollars in upfront money without actually completing construction of the home. Specifically, plaintiff GS 1975 LLC claims that it paid Irongate almost $7 million to build a home in Costa Palmas based on representations that construction was complete and threats that Irongate would not transfer possession if payment was not made, only to find that the home was uninhabitable and nowhere near complete. GS 1975 LLC further claims that when it sued to force Irongate to complete the home and recover damages caused by Irongate’s four year delay in construction, Irongate terminated GS 1975, LLC’s valuable private Beach Club membership at Costa Palmas.
Read the full lawsuit and complaint here:
Costa Palmas development La… by Thiago Truth
The second lawsuit, filed in federal court in Los Angeles, tells a similar tale. According to plaintiff TRG CP, LLC, Irongate and members of its executive management team made numerous false promises to induce TRG CP, LLC to purchase a $4 million beach front lot and commit to building a $5 million home in Costa Palmas. Irongate told TRG CP, LLC that the home would be finished by the end of 2021 and that TRG CP, LLC could elect to fix construction costs after the design was finalized. According to the lawsuit, Irongate reneged on those promises. As of 2023, the home is nothing but a concrete shell, and Irongate has tried to force TRG CP, LLC to pay more than $10 million in made up construction costs based on lies and threats. As with GS 1975, LLC, Irongate retaliated against TRG CP, LLC for filing suit to protect itself by also terminating TRG CP, LLC’s Beach Club membership, which is valued at millions of dollars. Others named in the lawsuit are Michael Radovan, Mitchell Laufer, Martell Capital Group, and Costa Palmas Beach.
A representative of GS 1975, LLC confirms that civil and criminal actions against Irongate and Grosfeld are being pursued in Mexico, and he believes that U.S. authorities may also be conducting a criminal investigation into Irongate’s business practices in Costa Palmas, including potential racketeering activities. Representatives of TRG CP, LLC declined to comment about the pending litigation or any potential investigation.
