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"It appears from the files of the board," read the order in part, "that sales personnel of the company have made statements contrary to fact, which have misled and deceived purchasers * *

The complaints on file, added the order, "evidenced an absence of control by management in directing or controlling its sales program, in order to assure that misrepresentations, distortions and falsehoods are not employed in its sales program.”

FIRM ACTS SWIFTLY TO COMBAT THREAT Gulf American's reaction to the threat of having its registration suspended or revoked was swift and effective. It promised to take major and immediate steps to insure the truth against what it called unauthorized statements by over-zealous salesmen. It promised to monitor their conversations on the phone and in the closing booths, to distribute more literature and warnings to the sales staff, and above all to see that every buyer got a copy of a property report before he signed a contract.

The property report is a potent bit of packaged truth, a safety device invented by the land sales board. Its purpose is to protect investors against temporary blindness caused by the glare of the Florida vision and the enthusiastic patter of the commission salesman.

It gives the raw facts, without the adjectives, about the land which is being sold.

For example, a purchaser at Gold Gate Estates in Collier County would learn from the property report that his land is 18.4 miles from Naples; is not in a building site subdivision scheduled for homesite development; is in an area covered by surface water part of the year; and won't have drainage guaranteed until the contract is paid off.

One of the land board's complaints was that Golden Gate salesmen had not given this property report to buyers. Gulf American promised it would not happen again.

COMPANY EXPOSES THE TWO BIG LIES' A few days later president Julius Rosen issued from Gulf America's sales office in Baltimore a dynamic little pamphlet entitled “Exposed, The Two Big Lies."

Listed under Big Lie Number One was “You can double or triple your money in the first year and then get out with a quick profit."

“The truth is,” continued the pamphlet, “it is one thing to say that values increase it is quite another to say they are immediately marketable."

Under Big Lie Number Two was "If you can't sell it yourself, the deal is so good the company will buy it back."

“The truth is, if this were so, we would have no reason to be in business. Let's get the picture straight. At Cape Coral and Golden Gate, Gulf American purchased raw land doesn't sell it! What Gulf American does sell is developed land and the strong possibility that it will ultimately be part of a flourishing community.”

The pamphlet led off with a message from Rosen which said "A small number of unscrupulous individuals have been jeopardizing the livelihood, reputation and security of thousands of good people associated with Gulf American Land Corp. These few 'bad apples' are salesmen who have been closing their deals with a series of 'Big Lies'."

A copy of the pamphlet was mailed to the land sales board office in Tampa and filed with satisfaction by Executive Director Carl Bertoch.

BUT QUESTIONS RISE ABOUT WHAT'S TRUTH But there now exists some question about how widely the pamphlet was distributed. James Layden, coordinator of sales who works out of Gulf American's main office in Miami, said recently he had never seen it and was not familiar with its contents.

Truth also has been the subject of earlier memos addressed by Gulf American to all personnel. Last March, Board Chairman Leonard Rosen wrote:

'Beauty is truth, truth beauty—that is all. Ye know on earth, and all ye need to know.'"

"So said poet Keats and so say I. And so should you speak nothing but the truth."


Three years earlier, after a much publicized incident in which The Herald discovered a salesman misrepresenting the facts, Vice President Edward V. Pacelli wrote to employes. Quoting another classical source he said:

"So absolutely good is truth, truth never hurts the teller.” Yet truth, by some reports, continues to prove elusive on some occasions.


Thomas J. Zumbiel, a box maker from Cincinnati, vacationed at a beachside motel last August, got a street corner invitation to a Gulf American cocktail party, heard the pitch, flew to Golden Gate, put $65 down on two and a half acres selling for $4,158. He said the salesman told him it was a few blocks from the golf course, was zoned for high rise apartments, and could be sold or leased at a profit in four or five years.

Back home in Cincinnati he sent a $50 on the first month's installment, had some second thoughts, wrote the Collier County Engineer. He learned that his land was about 20 miles from the golf course, inaccessible, not scheduled for improvement until 1972 and was zoned to allow only two story apartments.

Zumbiel then wrote Gulf American, The Herald, the Miami Chamber Commerce and Better Business Bureau, the chambers in Lee and Collier counties and the National Better Business Bureau. He didn't write the land sales board because he didn't know it existed.

On Dec. 8 Gulf American still was urging Zumbiel to keep the property and bring his payments up to date. But on Dec. 28, after the National Better Business Bureau had made inquiries, it sent his money back.

It takes a lot of buyers to consume 325 square miles of real estate, especially when it is broken up into building lots, or even five acre tracts.


To flush out the prospects, then sell them, Gulf American employs techniques as varied as they are provocative.

Salesmen in shorts stalk Miami Beach sidewalks. In the many accommodations, shops and tourist attractions where Gulf American has been able to work out a financial arrangement with the owners, solicitors install themselves on the premises.

On the public beaches, pretty girls in bathing suits invite sunbathers to free boat rides and cocktail parties.

In restaurant parking lots, a free "Pearl Lagoon" on motel row, a free aquarium on Lincoln Road, around and in swimming pools, tourists are invited to learn more about Gulf American's three giant developments—Cape Coral near Fort Myers, Golden Gate near Naples and River Ranch near Lake Wales.

But Gulf American reports that the tourists it approaches in Florida comprise only a small percentage of its customers. It gets most through its farflung net that covers North America and much of Europe and South America.

AGENTS' GET-RICH PITCH LURES TOURISTS TO BUY The Gulf American Land Corp., sixth largest business in the state, sells millions of dollars worth of property each year to thousands of small investors. A Herald reporter and his wife posed as, tourists, got the company's sales pitch and bought a piece of property. The report is the third of a series.


(By Matt Taylor, Herald Staff Writer) Gulf American agents swarm Miami Beach. In some areas, you can neither eat nor sleep without finding an eager agent on the premises.

It begins as soon as the tourist checks into his motel or gets his first meal. It can end, as ours did, in the cluttered office of the manager of World Wide Realty Co., signing a contract.

There were congratulations on the wisdom of the purchase.

But there was no property report, a document required by the state with each land sale. The report tells you, without the embellishments, just what it was that you bought. It started as a vacation.

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My wife, Bonnie, and I checked into the Hawaiian Isles Motel, representing ourselves as tourists from Kentucky.

Only during the checking in and settling into our room were we left alone. From then on, we could do nothing without being solicited for the "chance of a lifetime."

A woman named Lee approached us the first time we left our room. She had a desk in the lobby of the motel.

"Have you signed for our free boat ride?" she asked. We said no.

"It's an advertising promotion for a local firm. It's free. You are under no obligation. The only thing they expect you to do in return for the free trip is to listen to them talk about the City of Tomorrow. Have you heard about Cape Coral?"

if we hadn't, we soon did. She described it as a wondrous city we wouldn't want to miss. We signed for the boat ride.


We walked a couple of blocks south to a Collins Ave. “tourist attraction" called the Pearl Lagoon. Free. Exciting. A dud.

The Pearl Lagoon is a cheap reed fence around a lot with a couple of thatched roof shelters in it. There's a dusty little case of ordinary sea shells. A tank full of tropical fish. It's dark, murky, incomplete.

At the only exit a girl sat polishing her nails. "Are you tourists?" Shirley Stevens asked. “I'm representing some people who want you to see the West Coast of Florida.” She gave us brochures on Cape Coral and tried to get us to sign for a “free flight” over.

“There is no obligation at all,” she said. We later found this not exactly accurate. She gave us a long pitch. She said it cost $80 to send a couple over. In answer to a question she said there had never been any accidents—“knock on wood.”

(There has been at least one. In October of 1964, a pilot and five prospective land buyers were killed when a Gulf American plane tried to land on U.S. 27 in the Glades during a storm. They landed about 100 yards west of the highway in six feet of water.)

She took our names, urged us to make reservations even if we wanted to change them to another time. “Many people who invested five or six years ago (in Cape Coral) now have their value tripled," she said. "Practically everyone who moves to Florida is going to the West Coast."

We declined the ride and walked back to the motel.

As soon as we stepped on the motel property, a large white car rushed up beside us. A man with a deep tan leaned out the window.

“Has one of our hostesse's invited you to our free boat trip yet?” When we said yes he said he was sure we were going to have a grand time.

The room telephone rang at 2:58 p.m. and Lee reminded us of our 3 p.m. appointment for the boat ride. We went to the lobby, where we were introduced to a couple from Canada staying at the same motel who were also taking the trip. Lee drove us to the dock in her car.

The boat, Miss Juanita III, was docked behind a service station on 163rd St., a few blocks off Collins Ave. Thirty-two people eventually arrived in cars from various motels. We got under way a half hour late with many passengers muttering.

The tour was an exercise in psychology. We were treated to the sights of millionaires' homes and the clear impression that all land in Greater Miami had become so valuable only the near rich could afford it. With each home, the story of the occupant's success was savored.

When the brief tour was over (it was advertised as a three-hour excursion but required only about a third of that) we learned what was to take up the bulk of our time with our hosts.

We docked at World Wide Realty Corp.'s offices on Indian Creek Dr. World Wide is Gulf American's agent.

We were assigned table numbers. Parties were split up. This kept many from comparing notes later. We were seated, two to a table, in a sales room. A salesman sat at each table. We were served cocktails as the salesmen inquired into our backgrounds and occupations. (I told them I was an electroplater by trade.)

Then came a color film, made in the style of a World War II training documentary-complete with simple little diagrams showing how land values increase as more people gather around it. It also used little axioms in big letters saying things like “Millionaires don't wait to buy land. They buy land and then they wait."

Secretary of State Tom Adams, sportscaster Bill Stern and the president of the Gulf American Land Corp. all had prominent roles in the film. (Adams' part was a filming of his dedication speech at Cape Coral.)


When the movie was over, excitement swept the room, or at least all of the salesmen in it. Because Max Pepper was coming.

A man got up and told us this Max Pepper was a fantastic genius who was largely responsible for Cape Coral's success.

He was introduced with a verbal fanfare.
But he wasn't present.

Someone went out and got him. He rushed in and mounted the platform, a dark and curly-haired middle aged man.

"] heard something when I came in about my being a genius,” he said, though he hadn't been present when so described.

"I'm no genius. If I'm a genius, I can make geniuses out of all of you.” He then said:

"We were getting a second opportunity to get in on something big-Golden Gate.

We'd never get rich putting money in banks and drawing interest.
Jan. 17 would be the last day for selling Golden Gate acreage wholesale.

Banks were getting rich investing other peoples' savings in “corporations like ours."

Naples could only grow by going to sea or to Golden Gates.

The state moved the Collier County courthouse to the edge of Golden Gates the only time in history this had been done.

A superhighway was being built from Fort Lauderdale to Naples “because the state knows where the future lies." (No mention was made that the superhighway would be two lanes and a toll road.)

By 1972, Golden Gates will be developed with all streets and canals complete.

A $20 million performance bond guaranteed Gulf American would fulfill its promises.

We had little time left to make big profits, and the firm's $2 million investment is now worth $250 million.

And finally: "I wasn't smart. I just had G-U-T-S * * * Don't be stupid. You'll never get anywhere working * * * Get big returns now."


Dave Wenger, the salesman at our table, now began to show us how “our” 114 acre lot in Golden Gates would be divided up. We'd pay $2,545 for it now, and in five years it would be worth $10,000, "a conservative estimate.”

We asked : Would we have any trouble selling it? Wouldn't Gulf American just freeze us out and sell their own land ?

"No. If you don't do anything with it, chances are we'll be in there pressuring you to sell it back to us for $10,000_we've got to keep the ball rolling."

He repeatedly gave our motel as a reference and said the owner wouldn't allow them to solicit his customers if it weren't a reputable firm.

Answering a question, he said he didn't care—and why should we?-about what kind of government Golden Gates would have. We'd just be land investors, not homeowners.

He said land was zoned agricultural for tax purposes and taxes were only around $17 a year. Later, we were told our investment was protected because the same lots he was talking about were zoned residential and couldn't be changed.

$30 DEPOSIT ASKED BEFORE FLIGHT OVER He urged us to go see the property, as Max Pepper had, and repeated that our guides would not be land salesmen and we could just relax and look.

This did not prove to be so.

We agreed to the flight, which we had been told repeatedly required no obligation.

Wenger pulled out a form and said we'd have to give him a $30 deposit on a piece of land before we could go. The money would be refunded immediately

if we didn't want to buy. We paid. Data from an IBM card was transferred to a deed describing “our property. We were not asked to sign.

He said there'd be no additional cost to us on the land if we bought it. Gulf American would build the roads and furnish the utilities.

The flight arranged, we were returned to our motel.

We went to the Black Angus Restaurant for dinner. A man in a sport shirt, Joseph Kuba, came to the car as soon as we stopped.

He wanted us to take a trip to the West Coast. He was "representing the West Coast of Florida.” Particularly Golden Gates. He said he wasn't supposed to approach us until we were leaving the restaurant, but it was getting late and reservations on the plane were getting scarce. He asked us not to tell the restaurant people he'd solicited us before we entered. We turned him down, because we were already going.

PILOT'S A SALESMAN, AND BREAKFAST'S FREE At 7:50 a.m., the next morning, our pilot called on the house phone. He was waiting. He was a registered real estate salesman. He said he couldn't even drive us around if he wasn't.

He did not, however, make any effort to sell us or pressure us at any time. In that, he was unique.

A DC3 airplane with a load of people from St. Petersburg landed shortly after we did at the Golden Gates air strips.

We had breakfast at Gulf American's expense and were turned over to the closing land salesman, Dick Jensen, who took us to the model homes, which we told him were way overpriced. We then went to his office.

He repeated the same things we'd been hearing and said:

Gulf American expects to put up 100 houses this year, then will aim at a schedule of completing two a day.

Utility plants will be installed before the homes go in.

Canals don't provide boat access to the Gulf. (We had to ask for this information.)

At least 90 percent of Golden Gates investors are tourists who "had no idea when they came down to invest. There are thinkers and there are doers."

Our lot in section 171 was near the Tamiami Trail. No, we could not see it. He used diagrams to show where the canals and roads would be around our property. The tracts next to ours were being held by Golden Gate for a secret purpose-possibly another Golden Gate-type city was planned.

The land was zoned residential-not agricultural, although we had been told the opposite earlier.

Included in the purchase price was $800 to cover utilities, but the homeowners to whom we'd eventually sell the four lots on our acre and a quarter would have to pay a hookup fee.

The acre and a quarter lots would give us less than an acre of land after the roads were put in.

There was no paperwork he could supply for us to take back home that would show us exactly the situation of our property.

We had asked this to study before we finally committed ourselves.
This was the state-required property report. It is required by law.

"NO ONE CAN FORCE YOU TO DO ANYTHING" Then he offered to sell us land in the section next to the platted city of Golden Gates for $3,200. This, we now discovered, would have asphalt roads. The land we were thinking about buying would have only shell roads. The higher priced tract would also be developed in three to five years instead of the five to seven years for the original tract.

He said that in five years we should double our investment on either piece of property, although the more expensive land would go up that much in three years, probably. (Later, the people at World Wide's Miami office laughed at this and said Jensen "was certainly being conservative.")

No, Jensen said, we couldn't see the more expensive tract, either. According to the map, it was only a mile or so from where we sat.

We told him we'd think about the purchase, but didn't want to buy right then. He returned our $30 deposit promptly.

“No one can force you to do anything," he said.

We came back into the sunshine and salt in a small patio awaiting the return of our pilot. Other couples were standing, sitting, chatting,

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