Hundreds of homeowners facing foreclosure have fallen victim to scam artists who told them they could hang on to their properties by placing them in phony "land grants," authorities said Thursday as they announced the breakup of the alleged scheme.
In a joint announcement, California Atty. Gen. Jerry Brown, San Diego County prosecutors and the FBI said they had shut down Federal Land Grant Co., a San Diego-based business that allegedly persuaded hundreds of homeowners, most of whom didn't speak English, to pay $10,000 each for the bogus protection from foreclosure.
The homeowners were falsely told that by transferring their land back to the federal government they could protect it from any lender's claim and eventually get it back free and clear, although they might first be evicted, officials said.
In related cases, authorities said, property owners paid only $500 but signed their homes over to the defendants and were required to make payments to supposedly lease back their own homes.
In both scenarios, the homeowners typically wound up losing their money and being evicted, Brown said.
More than 400 homes were in San Diego County, with scores of others in Riverside, San Bernardino, Orange and Los Angeles counties, officials said, adding that they expected to find more victims throughout California who hadn't come forward or didn't realize they were scammed.
At the heart of the alleged scheme were land grant transfers, used hundreds of years ago when the United States was still acquiring land from other countries. They are no longer recognized by any court or county assessor, Brown warned.
"There hasn't been a legitimate use of the land grant since the conclusion of the Mexican-American War," he said in a news release. "If some fast-talking scam artist offers a quick escape from foreclosure using archaic documents, be extremely suspicious."
Federal Land Grant promoted the scheme at weekly seminars where the sales pitch was translated into Spanish, authorities said in court documents. They said the company was run by William Hutchings, 62, his wife Xiaoke Li, 43, and Hutchings' former wife, Shawna Landis, 36.
Authorities said Hutchings and Li were arrested on criminal charges of conspiracy and grand theft Wednesday as they were making a presentation to more than 50 homeowners. Two men involved in the presentation, Edgar Martinez, 30, and Diego Gil, 38, also were arrested. The four were jailed Thursday and could not be reached for comment. Landis was being sought, Brown and San Diego County District Atty. Bonnie M. Dumanis said.
