Pacific Imperial Railroad

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Pacific Imperial Railroad, Inc.
PIR logo (Official).jpg
Reporting mark PIR
Locale Southern Border Region, Southern California
Dates of operation 2011–Present
Track gauge 4 ft 8 12 in (1,435 mm) standard gauge

401 West A Street Suite 1150 San Diego, CA 92101

United States
Website Pacific Imperial Railroad

The Pacific Imperial Railroad (reporting mark PIR) is a company in possession of the SD&AE Desert Line right of way in Southern California, colloquially referred to as the Desert Line.[1] The Desert Line starts at the border crossing at Division, near Campo at Milepost 59.94 (inside Tunnel #4) in eastern San Diego County, California where it connects with the Baja California Railroad in Mexico, and stretches 70.1 miles through the Jacumba Mountains to El Centro, California, where it connects to Union Pacific Railroad at Milepost 129.61. The significance of the Desert Line is that it provides an alternative rail route to and from the east for servicing the distribution, transportation, and supply chain needs of the Cali-Baja region.[2]


In 2012, following the embargo of the Carrizo Gorge Railway (CZRY) in October 2008 and the loss of operating rights in the Mexican Tecate-Tijuana segment, Pacific Imperial Railroad, Inc. replaced the San Diego and Imperial Valley Railroad as the rail operator between Plaster City and the border near Campo.[3] The last freight movements through the area were sand from Mexico, for use in making ready-mixed concrete for the construction markets in San Diego County, CA.[4]

Pacific Imperial Railroad, Inc. (PIR), was incorporated in Delaware on October 27, 2011[5] and qualified to do business in California on April 23, 2012,[6] having its stated objectives being to lease, rehabilitate, reopen and resume service, manage, operate, and maintain the entire Desert Line from "Mileposts 59.94" at or near the U.S. Border in "Division" to "Milepost 130.0" at Plaster City, west of El Centro. On December 20, 2012, PIR executed a 99-year lease with San Diego and Arizona Eastern Railway (SD&AE) and San Diego Metropolitan Transit System (MTS), owners of the Desert Line right of way.[7] The Desert Line extends from east San Diego County (border with Baja California) to western Imperial County.

According to an article in the San Diego Union-Tribune, in early 2014, a management team hired by the company left, alleging that investor money was fraudulently diverted to company principals. Company officials denied that was the case, and MTS said it found no evidence of any fraud.[8]

On or around October 17, 2014, Mexico's Baja California Railroad (BJRR) ended negotiations with PIR with concerns over the U.S. company's rights to haul freight through Mexico across the former Tijuana and Tecate Railroad. An article from the San Diego Reader implied that goods from San Diego may have to be trucked through Mexico and then loaded onto trains in the United States before continuing to El Centro to interchange with the Union Pacific Railroad.[9] However, there was an apparent turning point in the negotiations between BJRR and PIR sometime during the first half of 2015. On June 22, 2015 at the MTS headquarters in Downtown, San Diego, Baja California Railroad and Pacific Imperial Railroad reached a significant step by executing a memorandum of understanding expressly acknowledging the parties' desire and intent to work together to develop a binational railroad and outlining the expectations and issues that need to be resolved. The MOU states that the parties will use their best efforts to reach a "definitive agreement" on these outstanding issues within six months. Additionally, acknowledging that the delays in reaching an agreement with BJRR have also delayed the construction work necessary to bring the Desert Line back to an operational condition making it highly unlikely that PIR would be able to run a test train by the December 2015 lease deadline, PIR's management proposed that MTS agree to modify certain performance milestones so as to not be in violation of the lease.[10] Subsequently, on July 17, 2015 PIR announced on the company's website that the new milestones were approved by the MTS Board of Directors by a 17-0 vote.[11]

New owners took majority control of PIR in 2015.[12] On June 2016, PIR and BJRR reached an agreement to pay the rehabilitation and operations of the Desert Line. BJRR subleased the Desert Line from Campo to Coyote Well; PIR will operate between Coyote Wells and Plaster City. Work by BJRR on restoring the Desert Line was scheduled to begin in the summer of 2016.[13][14]

On October 2015 Arturo Alemany Salazar was confirmed as a CEO and president of PIR. Alemany Salazar was identified as principal of Conatus by the Business Wire news.[15][1]

Arturo Alemany DBA Arturo Alemany Salazar, Pacific Imperial Railroad CEO operates a company called MIR International within the radar for the Mexican Cartel money laundry.[16]

On August 26, 2016 Pacific Imperial Railroad's one-time largest shareholder, Dwight Jory, filed a civil action against the company in hopes of recovering $1.8 million owed to his company Locati Global Holdings. The lawsuit is an indication that the group of shareholders from Las Vegas that has a long and storied past together is now on the skids. Conatus Capital Group was formed in Nevada last year by the Securities Law Institute, which is owned by Donald Stoecklein and has been used to register a number of entities with ties to the railroad. Conatus Capital's estimated worth at the time of filing was listed at $10,000. Pacific Imperial's president, Arturo Alemany, a longtime railroad executive, was named as the group's president, director, and treasurer. His brother Alexander was listed as secretary. In late December 2015, Stoecklein, as well as Alemany, spoke to the newspaper Reader, denying any ties with the hedge-fund firm Conatus Capital Management.[17] "I have studied and followed Dutch philosopher Baruch Spinoza for over 20 years and Conatus was a subject he wrote about," says Alemany. "We used Conatus for the new holding company to mean 'endeavor,' and 'undertaking.'" After closer review, it was discovered that Conatus Capital Group Inc. isn't based in New York but was registered in Nevada in August 2015, two months before Pacific Imperial Railroad's announcement. Adding to the confusion, there is a large hedge-fund investment firm named Conatus Capital Management in the New York area but it has no ties to the railroad. In fact Alemany Salazar and Stoecklein named a 10.000 value company as Conatus. The name was changed later to Pacific Investment Group.This type of action became consistent with Alemany and Stoecklein 'modus operandi' and since 2007, Pacific Imperial Railroad F/K/A Carrizo Gorge Railway had been ordered to return $2 million to former investors Gina Seau, Gary Jacobs of Qualcomm, developer Corky McMillin, and Mark Arabo of the Neighborhood Market Association, among others.[17]

In October 2016, PIR announced it filed a voluntary petition for reorganization under Chapter 11 Bankruptcy in order to facilitate the further development of its primary asset.[18]

According to Arturo Alemany, the recently appointed Chief Executive Officer of PIR,[19] "the Chapter 11 petition will enable PIR to complete its goal by securing a strategic partner with the necessary capital and expertise to develop the remainder of PIR's railway assets in a manner that will pay PIR's creditors and further the interests of the public at large." Various claims arising from before Mr. Alemany's involvement with PIR had a chilling effect on PIR's ability to raise capital. The Chapter 11 proceeding will enable PIR to maximize the value of its assets, while providing an effective forum for resolving any disputes regarding the claims.[20]

In March 10, 2017, a U.S. Bankruptcy Court judge approved the sale of PIR's Desert Line track leases and development rights to a Nevada corporation affiliated with Baja California Railroad. The bankruptcy case is still open, pending a final accounting of payments to creditors and two investor lawsuits.[21]

In August 2017 after raised fraud legal issues and law suits against Arturo Alemany, Jeffey Kinsell filed a declaration in the Bankruptcy Court,Case number Case 16-06253-LT11 stating "This declaration will detail evidence that the true purpose of the PIR bankruptcy was to cover-up improper and fraudulent corporate and private actions undertaken by Arturo Alemany ("Alemany") and Donald Stoecklein ("Stoecklein"). They violated their fiduciary responsibilities to all PIR stakeholders, and engaged in usurpation corporate authority ("Misdeeds") to gain personal financial advantage." Essentially, the perpetrators of the fraud, having control of the flow of paperwork of the corporation (Debtor), utilized the procedures of the documents that are the driving force of the corporation and the confusing and complicated use of loan and ownership documents to seemingly gain control of Debtor. In addition, use of subterfuge, such as, misrepresenting and pretending to be a powerful corporation "Conatus" when actually the name was the same but that was the only resemblance. By misrepresenting the actual identity of the corporation buying the Debtor, they bought Debtor (worth millions) for $10,000 down and a promise to pay the rest when they "caught them." The Declaration of Jeffrey Kinsell which sets out in detail the facts of the complicated scheme and how it was carried out reads somewhat like a "novel of intrigue" as the scheme seemed to have worked, in that, the perpetrators of the scheme seem to have actually achieved their goal, to date, of not only taking over the Debtor, but actually deftly getting the Bankruptcy Court to approve their actions. Unfortunately, up to now, the scheme has not been exposed. However, it is not in the best interests of the "sanctity" of the judicial process to allow the fraud to come to a final conclusion by prevailing. The Courts are not to be used as a tool to unjustly prevail by fraud and deception, no matter how elegant the scheme."[22]

In August 31st 2017 International Railroad Investment Fund, Inc., Gold Mountain North, LLC, and This Land Is Your Land, Inc., through their counsel of record, Judith A. Descalso submitted Status Report with regard to the supplement to statement of decision of Judge Styn in the state court action pursuant to California Corporations Code §709 (the State Court Action against Arturo Alemany Salazar and Pacific Investment Group F/K/A Conatus Capital Group, San Diego Superior Court case number 37-2017-00003801-CU-MC-CTL). Judge Styn ruled that the stock agreement was rescinded by the payment of 10,000.00 back to Conatus",return the shares to Descalso's clients.[23]


In June 2013 PIR entered into an agreement with J.L. Patterson & Associates, Inc.[24] to commence inspections of the bridges, tunnels, track, and rail. A "summary level" report of the general condition of the bridges was completed in October 2013.[25] So far, J.L. Patterson has completed initial repairs by clearing sand from the line that blew into the line's right-of-way with a ballast regulator and ran a high-tech Holland Track Geometry Hi-Rail truck on the Desert Line to identify defects on the entire Desert line.

As of July 1, 2015 PIR has made 5 payments of $500,000 totaling $2.5 million to MTS, owners of SD&AE's Desert Line right of way as part of the lease.[10][26]

Thursday, June 9, 2016 - Binational Agreement Reached to Reconstruct the Desert Line Railroad "We have worked very hard with our partners in Mexico to realize this dream," said Arturo Alemany, Executive Board Member for Pacific Imperial Railroad. "This is a joint effort that will create a new cost-effective option for international businesses to ship products, such as automobiles, from Mexico to the eastern United States."[27]


PIR officials target the maquiladora market by interchanging with the Baja California Railroad where it meets the west end of the Desert Line, at the Mexico-US border at Division/Lindero (between Tecate and Campo), and with Union Pacific Railroad in Plaster City, CA.[28] The PIR has also expressed intent to finance the proposed "El Lindero" customs, intermodal interchange, and industrial park project, which would be located one kilometer south of the border at Division/Lindero.[29]

Improvements to the "Desert Line" started in August 2013. In August 2015, 49 empty boxcars were removed from the dormant line by GATX in preparation for reconstruction efforts.[30]


  1. ^ McFarland, Thomas F. "Change in Operators Exemption" (PDF). Surface Transportation Board. STB - Finance Docket. 
  2. ^ "About PIR". Retrieved 2015-08-03. 
  3. ^ "San Diego MTS Report" (PDF). Retrieved 2013-09-21. 
  4. ^ "Exhibit "1"" (PDF). Retrieved 2016-03-09. 
  5. ^ "Department of State: Division of Corporations". Archived from the original on 21 July 2011. Retrieved 11 June 2013. 
  6. ^ "California Secretary of State Business Entity Search". Archived from the original on 15 March 2015. Retrieved 11 June 2013. 
  7. ^ "Pacific Imperial Railroad Announces Update in Operations". Business Wire. 2013-02-15. Retrieved 2013-09-21. 
  8. ^ Moran, Greg (2015-07-07). "Border Railroad Makes its MTS Payment". San Diego Union-Tribune. Retrieved 2015-08-25. 
  9. ^ "Still no light at the end of the tunnel - Pacific Imperial's binational railroad may involve some trucks". 2014-11-11. Retrieved 2015-04-26. 
  10. ^ a b "MTS July 2015 Board of Directors Meeting Agenda". 2015-07-16. Retrieved 2015-08-03. 
  11. ^ "The Desert Line and the Sunset Route". 2015-07-17. Retrieved 2015-08-03. 
  12. ^ Hargrove, Dorian; 27, Jan; 2016. "The long-desired transnational railroad". Retrieved 2016-08-21. 
  13. ^ "US-Mexico railroad agreement reached in San Diego". Trains Magazine. 2016-06-10. Retrieved 2016-08-05. 
  14. ^ Stewart, Joshua (June 9, 2016). "Border rail line to connect U.S., Mexico". The San Diego Union-Tribune. Retrieved 2016-08-21. 
  15. ^
  16. ^
  17. ^ a b
  18. ^ "Pacific Imperial Railroad Undertakes Chapter 11 Reorganization" (PDF). Pacific Imperial Railroad. Retrieved 2016-10-16. 
  19. ^
  20. ^
  21. ^ Diven, Bill (2017-03-16). "Judge clears way for Pacific Imperial asset sale". Trains Magazine. Retrieved 2017-03-17. 
  22. ^ Case 16-06253-LT11 Filed 08/23/17 Entered 08/23/17 07:49:01 Doc 334 Public Record
  23. ^ Public Record San Diego Bankruptcy Case 16-06253-LT11 Filed 08/31/17 Entered 08/31/17 16:49:52 Doc 342
  24. ^ "Pacific Imperial railroad, Inc. Enters into Services Agreement with J.L. Patterson & Associates, Inc." (PDF). Retrieved 2013-09-21. 
  25. ^ "Pacific Imperial Railroad's March 2015 Presentation to MTS Board" (PDF). 2015-03-12. Retrieved 2015-08-03. 
  26. ^ "Pacific Imperial Railroad Reaches Major Milestones; Pays $500,000 Lease for Desert Line". Retrieved 2013-09-21. 
  27. ^
  28. ^ Dibble, Sandra. "Rebuilding historic U.S.-Mexico rail link". San Diego Union-Tribune. San Diego Union-Tribune. Retrieved 11 Feb 2013. 
  29. ^ Cervantes, Sandra. "Preparan proyecto El Lindero en Tecate". Urbes y Estados. El Economista. Retrieved 3 Dec 2012. 
  30. ^ "Clearing the Way for Reconstruction". EPacific Imperial Railroad Website. 12 August 2015. Retrieved 8 Aug 2015. 

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