“It was always my dream to live in paradise, in Bali or another gorgeous island,” Victoria Holmes, a hypnotherapist told news.com.au.
“So a few months before the pandemic, I packed up my apartment and moved to Bali.”
But Holmes didn’t want to live alone as she had in London. She dreamt of joining a community of “like-minded” people. Holmes thought her prayers had been answered when she came across a brochure for a property development called Golden City while at Clear Cafe in Ubud, the spiritual capital of Bali.
“It just resonated with me. Everything I ever wanted was right in front of me,” she recalls. “Knowing how high land prices are in Europe, I thought it was a bargain and invested.”
Golden City sounded like a dream for anyone looking for a change of pace from city life.
“Imagine a world without borders,” reads the brochure. “A place where everyone is part of an evolved common purpose. A bridge between the modern world and a community-based lifestyle rooted in the heart of a seaside sanctuary.”
The off-plan investment project was for a fully integrated lifestyle resort comprising solar-powered “Dome Houses” with futuristic “BioArc” designs. The plan included an Ayurvedic healing centre, school, day spas, permaculture gardens, co-working spaces, yoga studios and gourmet organic restaurants. This was all set on beachfront land on Sumbawa, a dreamy tropical island 200 kilometres east of Bali.
More than an alternative to the rat race, the project also offered a remarkable return on investment.
“Golden City stands out in its vision to provide world-class, state-of-the-art, luxurious experiences that are highly affordable and at the same time profitable,” reads the latest brochure dated 2023.
Plots are listed at $US8000 to $US30,000 per 100 square metres on a leasehold agreement. Golden City literature suggests investors can expect annual rental yields of 20 per cent to 25 per cent and asset appreciation of 300 per cent in as little as four years.
Around 130 investors have already joined Golden City. But ground has not yet been broken because, as lawyers have discovered, the developers don’t own the land.
Now, 62 angry investors have joined a $US5 million ($7.8 million AUD) class-action lawsuit against the founders of Golden City: Yansen Barry, the Indonesian director of Bumi Kristal Sumbawa, a company formed to sell property in Sumbawa; and Brett Sorenson, the face of the project, an expat American who goes by the name Brett Black and co-owns Clear Cafe Ubud.
In a video shared on YouTube, Sorenson says he is a respected designer: “I have a zillion magazine design articles.”
He’s also credited on film website imdb.com for a small role in the 2001 Denzel Washington crime thriller, Training Day.
In October, Sorenson’s face was splashed across the evening news in Indonesia after police in Bali launched an investigation for fraud and embezzlement at Golden City. That investigation remains ongoing.
Losing their pants
Many of Golden City’s investors were experienced investors. Some had already lived in Indonesia for years while others had already invested in property abroad. A small number were even Indonesian citizens. And they invested up to $US500,000.
“Why didn’t I get a notary?” Holmes says. “Because I was mesmerised with the community. The whole picture was just so hypnotising, living in a utopia with people who are into the same things – nature, health and beautiful human relations … It was built on trust. I thought of them as my second family.”
Stories of small-time investors losing their pants in the Orient are as old as … well, as stories about the Orient.
In Indonesia, they hark back to the early 1970s when Australian surfers popularised Kuta, a once-paradisiacal beach on Bali’s southwest coast. But a few weeks every year in Bali wasn’t enough for some trailblazers. They wanted a piece of paradise for themselves where they could live out their days drinking coconuts on the beach.
Some ended up living the dream. But scores get shafted every year as a result of a loose regulatory environment and a ‘gone tropo’ mentality where foreigners don’t read the fine print or trust the wrong people. Facebook pages for expats in Bali are riddled with such hard luck stories.
The director of a large architectural firm in Bali, who spoke on condition of anonymity, says “60 or 70 per cent” of foreigners who invest in property in Bali lose their money to builders, landlords or business partners. Sometimes they’re even blackmailed by neighbours who place pigs or roosters on their side of the fence and demanding a King’s ransom to remove them.
In Ubud, some locals have made small fortunes by pointing powerful mirrors to blind and startle guests at luxury hotels. Then they demand money from the hotel for them to be removed.
“The police say people have the right to do what they want on their land,” said the general manager of an internationally branded hotel, who wanted to remain anonymous. “Nine times out of 10, the blackmail works. It did with us.”
Today, Bali and its surrounding islands are in the throes of a construction boom of the likes never seen before. Fuelled by the return of mass tourism after the pandemic, $US450 million in foreign direct investment flooded into Bali alone in 2022, according to research firm Statista. But buyer beware.
Warning signs
In the case of Golden City, the warning signs were there from the start. Even before turning the first page, any notary worth their salt would have noted the contracts were written in English instead of Bahasa Indonesia and therefore null and void, says Ni Luh Arie Ratna Sukasari, a partner with Malekat Hukum, the Balinese law firm leading the class action.
A basic search for the land on Indonesia’s electronic National Land Agency Register shows the land is not owned by Golden City or Barry’s holding company but by some 30 different locals in Sumbawa, none of whom appear linked to the project.
Deeper research by Malekat Hukum identified an even taller red flag: about one-third of the plot of land shown in the brochure drawing crosses an existing road.
“Legally, no one can sell the highway which is owned by the state. Golden City openly plotted and sold land that is on a public road,” Sukasari said.
The drawing of the Dome Houses – and the estimated cost of construction of $US25,000 for an 81-square metre dwelling – should also have given investors who did their homework a reason to pause.
“That roof is unbuildable. And for that price it’s impossible,” the architect says.
So why did so many intelligent and worldly people invest in Golden City without doing their due diligence?
One possible answer can be found in the unorthodox wording of the brochure, where the word ‘family’ appears 10 times in statements like “a family of like-minded people who are in alignment with our purpose” and in a testimonial: “Everyone we met through the Oasis and Golden City are like family to us.”
A professor of decision sciences at the University of Southampton, who studies financial risk-taking, Yaniv Hanoch says the concept of ‘family’ is a tool often used to entice investors because family is what we trust most: “Family is a proxy for trust. It’s given that you trust your father and mother, sister and brothers. So what they do is create a family in a very short time.”
A former investment banker who lives in San Francisco, Mimi Aye is also at a loss to explain why she did not hire a notary before investing in the project. But her backstory helps paint a picture of how she was sucked in.
“A few years ago I was diagnosed with an incurable medical condition, so I decided to develop a holistic healing retreat,” Aye says in a barely audible voice. “I looked at Thailand and Costa Rica but friends in Bali introduced me and Brett and suggested I visit the Golden City. The beachfront was stunning and I decided to invest.”
Aye paid a deposit of $US63,000 and planned to invest a total of $US1.75 million – despite harbouring serious concerns about the way the project was being managed.
“I thought the project was mismanaged, and that I could help put better systems in place,” she recalls.
“That was my hope because I wanted to believe in the vision,” she says. “But after almost a year of excuses and delays, I chose not to complete my investment and joined the class action.”
Aye claims her health has deteriorated significantly since changing her mind about Golden City. She also appears to be suffering from a form of depression Hanoch says could be the ‘afterburn’ of feeling she had been scammed.
“Many get depressed. Even if what they lost was a small proportion of their savings, it becomes a cross of shame,” he says.
“How do you explain it to your friends and family members? Most people don’t talk about it because they don’t want to be known as someone who [is gullible]. But that’s what happens when they suck you in. You can’t see left or right anymore. The prize is the only thing you focus on because that’s how we’re psychologically built.”
The biggest loser at Golden City is American software engineer Christopher Smith, founder of several tech companies and Chief Financial Officer at Airchat, a voice-first social networking app. He invested $US500,000 in the Golden City project.
“Brett said all the right things,” he recalls of the day he first spoke to Sorenson. “His criticism of America was accurate and insightful and we shared the belief we had to get out. So why not buy land on a tropical island and do our own thing?
“He’s a skilful communicator. He spoke with tremendous confidence but just the right amount of self-reflection built in so as not to come across as arrogant … I thought this guy is a doer.
“Brett’s nickname in Bali is ‘Hollywood’ because of that part he had in the Denzel Washington film. I believe he learned his skills in Hollywood: how to deflect people who accuse you of doing something wrong, explaining to people why they are angry and making them calm down.
“When you mix those skills with his natural magnetism, it’s a powerful combination … It’s enraging how good he is at what he does.”
‘I know nothing’
Director Yensan Barry did not respond to texts and phone calls from news.com.au. However in messages he sent to investors now suing him, he insisted he owns the land.
“So, okay, the story is I bought that land. To be honest with you, I’m a new guy. I’m a new person in Sumbawa. I know nothing. We just came with a big vision, big mission, big heart to buy the land. You can start to build your house actually tomorrow if you have already money enough to build,” he said.
Sorenson could not be reached: his last known phone number is disconnected and messages left for him at Clear Cafe Ubud were not responded to.
However, he shared his thoughts in a series of videos he uploaded to YouTube last year after allegations were first made public and which he has since deleted.
“Most people know that Yensan Barry is the owner of the land,” Sorenson says, sitting in a high back chair in a bamboo structure somewhere in the tropics.
“I know a lot of you are confused,” he says, closing his eyes. “And you’re asking why did I sign up for all of this because I know there are quite a few of you who have been part of this journey on a very deep intimate level, and oftentimes you have said to yourself, this is not exactly what I thought I was signing up for. And that my friends, is a question that cannot be answered by anyone but yourself.
“The land, these accusations and allegations, I don’t even have words for it. Rage is not a word in my vocabulary because I am beyond rage and anger,” he says.
“So let’s clear this up right now. Their accusations, their bold accusations, that Golden City is a Ponzi scheme. I hope all of you know what a Ponzi scheme is. How dishonest these people are! Can you imagine?”
Sorenson then verbally attacked Smith and other investors who are now suing him. But he holds special disdain for Australian Michael Lenihan, director of MSR Global, a Bali-based international mediator who brought together the parties in the class-action lawsuit.
“This guy Michael who is handling this thing is just out of his f*cking mind,” said Sorenson.
Police in Indonesia won’t comment on Golden City while the project is under investigation. Lawyers for the class-action civil case are awaiting a trial date though the plaintiffs interviewed for this story hold any hope of getting their money back – and with good reason.
Between 2010 to 2021, only 139 cases of land and employment fraud went to trial in Indonesia, according to the Directory of Supreme Court Decisions. They include a January 2023 ruling against a mother and daughter team that screwed a Saudi princess for US$37 million. The accused each got 19 years and six-figure fines. But as Sukasari points out, “Saudi Arabia is Indonesia’s big brother” and top-level diplomatic interventions were likely at play to secure such heavy convictions.
“It took so long to find lawyers that could help us. I just don’t believe the Indonesians care when [it’s just foreigners involved],” says Holmes.
Smith is sanguine. “Emotionally I’ve let it go and I don’t expect to get my money back even if our lawyers win,” he says. “My primary motivation is stopping more people getting ripped off by Brett.”
Mimi Aye, whose health is rapidly failing, doesn’t care about the money either. She just wants justice – or revenge – it’s impossible to tell.
“One of the friends who introduced me to Brett, she invested $US46,000, all the money she had at the time,” she says.” She’s the real reason I joined the class action. Because Brett targets idealistic spiritual people like us.”
International mediator Lenihan says that while he understands their frustration, the plaintiffs should not give up hope. “We will do all that we can to find the money and assets for the investors. Brett has [ruined] many people’s aspirations. It has to stop,” he says.
Ian Neubauer is a freelance journalist.