Consumers had filed almost three dozen complaints with various agencies: the Kern County District Attorney, the California Department of Real Estate, even the Federal Trade Commission, but the company continued to operate until 2019. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. Silver Saddle Receivership FAQs Updated as of 10/10 . They compared California City to Las Vegas and other large cities in the Southwest that began as tiny desert outposts. July 10, 2020 Offer to Purchase Silver Saddle Ranch and Club. In March 2022, we sent out 2,970 letters to investors notifying them of the Receivers Preliminary Claim Determinations. "A Treasure in the Desert!" Located in the high desert at the foot of the majestic. The Receiver hired counsel for both matters. If you are an investor and do not receive a letter by March 15, 2022, please contact the Receivers office at info@regulatoryresolutions.com. Many of those consumers ended up spending tens of thousands of dollars on land they were made to believe would be worth much more in the near future. The Receiver will reply to any objections and the Court will rule. Based on an independent appraisal prepared for the Galileo Project Land, the Receiver believes the price is more than fair and reasonable. 12. The Judges overseeing this case are Clark, Thomas S., Schuett, Stephen D. and Friedman - Retired, Gary T.. In part, the ruling states that, [t]he prospective intervenors, like all investors, will be afforded an opportunity to be heard regarding the disposition of the receivership estate through the Receivers notice and recommendations to the Court. Each investor will get a pro rata share of the distribution: Investor A will receive $20 (20% of the distribution), Investor B will receive $50 (50% of the distribution) and Investor C will receive $30 (30% of the distribution). Today on Public Media Giving Day, keep LAist strong with your support. Maney helped negotiate the settlement with the FTC, and after Great Western Cities declared bankruptcy in 1984, he acquired some of the assets, including a lot of vacant California City land and a small resort called Silver Saddle Ranch. The Court approved the sale on November 6, 2020, and the sale closed on January 14, 2021. As previously reported, the receivership case was stayed (put on hold) on August 11, 2022 as the result of a request by Defendant Maney. Investors Reviews of Claim Determinations. We will provide an update if the trial date changes. October 14, 2020 Motion to Approve Sale of the Silver Saddle Ranch and Club Filed andTelephonic Hearing Set for November 6, 2020 at 9:00 a.m. On October 13, 2020, the Receiver filed a Motion to Approve the Sale of the Silver Saddle Ranch and Club (Ranch) for $2,100,000. The lawsuit by the state of California accused Accelerated Assets, SS Purchco and PVRE of aiding-and-abetting securities violations allegedly committed by the developer of the Silver Saddle Ranch & Club in the Mojave Desert and certain executives and employees of Silver Saddle Ranch. A judge appointed a receiver to take control of the company's assets and property while the case proceeds. inter alia, defendants Silver Saddle Ranch & Club, Inc. (SSRC), Silver Saddle Commercial Development, LP (SSCD), Galileo Commercial Property Owners Association, Inc. (GCPOA), and Thomas M. Maney (Maney), alleging that said defendants offered and sold to the public an The relevant documents can be accessed at the links below or by clicking on the documents to the right. If and when the Court enters an Order allowing a distribution to investors, the Receiver will issue investor checks promptly and consistent with the claims determinations. The salespeople held raffles for free airline tickets to Hong Kong and Manila, shopping sprees, watches, cameras and other perks to encourage people to invest. CALIFORNIA CITY WAS FOUNDED BY A CZECHOSLOVAKIAN IMMIGRANT WITH A VISION TO BUILD A CITY FROM SCRATCH IN THE DESERT. No. The receiver is currently trying to sell the ranch and all the land around it to help pay back people who bought into the landbanking operation. The receiver also accepted a separate $775,000 offer from Feterik to purchase the Project land. According to the court document, the ranch includes six primary buildings: a club. If the Motion is granted, the Receiver will be able to start the distribution process. The trial date in this case remains the same, September 16, 2022. A trial date has been set for July 2021. For the latest national news from NPR and our live radio broadcast, visit LAist.com/radio. Each investor would receive a part of the proceeds from the sale proportionate to the money he or she paid for the property. Why A Key Program Is Falling Short, An Agonizing Battle With Schizophrenia Ends On A California Freeway. After the Nader's Raiders' published their report in 1971, the Federal Trade Commission began to investigate. The California Department of Business Oversight ("DBO") filed its civil lawsuit on September 9, 2019 against Defendants. The Court will hear the Motion in a telephonic hearing on March 19 at 9:00 a.m. I wish (the salespeople) realize how much they cost all the families, he said. We will seek the Courts approval of the sale at a telephonic hearing on November 6 at 9:00 a.m. via CourtCall and, if granted, the closing should occur 60 days thereafter. As such, the Receiver accepted the offer and will soon seek Court authority to sell the Galileo Project land. On 04/16/2019 JOSE CARRILLO filed a Labor - Wrongful Termination lawsuit against SILVER SADDLE RANCH CLUB, INC. Silver Saddle Ranch & Clubruns and operates a resort facility in California City called the Silver Saddle Ranch and Club (Ranch), located at 20751 Aristotle Drive, California City, California 93505. Should the Court order the sale to go forward, the Receiver intends to recommend to the Court that the sale proceeds be used to fund an investor distribution. They could build a house, or just hold onto the land and sell it in the future. The DBO alleged that Defendants committed . One of these companies, High Plains Mesa Holdings, had a lease option agreement in place to sell a 640-acre parcel of land to a solar energy company for roughly $4,100,000 before this lawsuit was filed. 60 Years Of Deception And Land Sales In California City: 7 Takeaways From My Investigative Podcast, California City Podcast: State Adds Use Of Cell Phone Jammers to Complaint Against Silver Saddle, 'California City' Podcast Tells The Dark Side Of The American Dream. Case Summary. Four years ago, while reporting a story about the drought, I received a tantalizing tip: In a small town in the Mojave Desert, salespeople were making tens of millions of dollars hawking empty desert land to unsuspecting buyers by convincing them the area would boom one day -- and if they got in now, they could get rich. IN 2011, SILVER SADDLE TRANSITIONED FROM SELLING VACANT DESERT LOTS TO SELLING SHARES OF A CONFUSING REAL ESTATE INVESTMENT CALLED 'LANDBANKING'. Windy with sunshine. This case was filed in Orange County Superior Courts, Orange County Civil Complex Center located in Orange, California. In that scenario, Investor As pro rata share is 3% and Investor Bs pro rata share is 5%. According to the motion, more than 33,000 emails were sent to Kidder Matthews west coast offices regarding the property, who communicated with 48 individuals interested in the property and provided tours for 12 groups. DBO contends that businessman Thomas Maney and other associates conned people into purchasing land shares on theGalileo Project with the promise of earning a significant return on investment down the road. The Court granted the Receivers request on June 11, 2021. He spent a free weekend there in 2017, and ended up forking over $30,000 for a confusing, desert-land investment product. Both the Ranch and the Galileo Project property are listed for sale. Thousands of people bought this dream. Most of the land Mendelsohn sold was bought by participants of a program he created that taught people how to be a real estate agent-- by selling land in California City. A promotional brochure from Silver Saddle, which is part of the DBO's lawsuit against the company. This case was filed in Los Angeles County Superior Courts, Spring Street Courthouse located in Los Angeles, California. While we have heard from a number of Galileo Investors (who are coordinating with Antonio Garcia and Carlos Novelo, and their United Owner Investors, Inc.) objecting to the sale of the Ranch, the investors do NOT hold an interest in the Ranch property. People needed a place to go, to start over. California City is filled with signs advertising vacant land for sale. High near 70F. As part of the proposed sale, the Receiver and the Proposed Buyer will work cooperatively during the escrow period to secure the City of California City's consent to an assignment of the ground lease to the Proposed Buyer, the motion states. Now, the California Department of Business Oversight has accused the company of August 17, 2020 Postponement of Receivers Motion to Cancel Escrows. In the mid-1950s, real estate developer Nat Mendelsohn began to buy a ton of land in the Mojave Desert, 100 miles north of Los Angeles. The case is still on-going. Their books were so disorganized that the DBO's fraud examiner determined it was probably deliberate -- Silver Saddle must have been transferring money between multiple accounts to make it difficult to trace. Around the same time, a young Ralph Nader asked his gang of consumer protection attorneys, the "Nader's Raiders," to investigate land sales and development throughout California. A copy of the Receivers First Interim Status Report is posted in the Documents section of this webpage. In my podcast California City, I told the story of a small town in the Mojave Desert where, for more than six decades, salespeople have been peddling nearly worthless desert land to unsuspecting people. The reason the Receiver took the motion to approve the sale off calendar is that shortly after the Receiver accepted an offer to purchase the Ranch, another individual, who had also presented an offer, complained about the sales process and his interaction with the real estate broker. Based upon an independent appraisal prepared for the Galileo Project land, the Receiver believes this offer is fair, reasonable, and at or above market value for the property. Regulatory Resolutions, operated by Thomas McNamara, agreed to the sale of the 130-acre property for $2.1 million to the proposed buyer Aaron Mamann after a previous arrangement was canceled. A telephonic hearing has been set for August 27, 2020 at 9:00 a.m. to allow for full briefing on the matter. If the DFPI is successful at trial or the parties reach a settlement, then the Receiver will seek permission from the Court to distribute the funds in the Receivership Estate to the Silver Saddle investors. Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. Silver Saddle Ranch is delivering the very best 2-acre homesites in the market. Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. While Jones attorney eventually responded that the offer wasnt contingent on any joint venture, the deadline had passed and Jones offer since rejected, though the receiver invited him to submit another offer through Kidder Matthews. Today on Public Media Giving Day, keep LAist strong with your support. Jones expressed a concern that he did not have a full and fair opportunity to pursue an offer which he provided to the broker. The hearing originally set for August 19, 2020 on the Receivers motion to approve the sale of real property owned by Silver Saddle Ranch & Club, Inc. has been taken off calendar. Internet Reaction Is Not Great, There's Something Else Blooming In The Desert: Massive Art Installations, What We Know About The Odd Blue Creatures Washing Ashore On SoCal Beaches, The Palm Springs Government Burned Down Their Neighborhood Now They're Seeking Reparations, The Very Busy Ports Of LA And Long Beach Are Effectively Shut Down, Everything Is Blooming In The SoCal Desert. Leads Ali Wong and Steven Yeun issue a joint statement along with show creator Lee Sung Jin. Silver Saddle Resort was part of an investigation and lawsuit filed by the California Department of Business Oversight in 2019 that looked into fraudulent land sale activities in California City. The prospective purchaser agreed to cancel the escrows, thus eliminating the need for the Receivers motion and the hearing on the matter. The Court denied the Receivers ex parte application for an order cancelling escrows for the Ranch and Galileo parcels, and stated that it was not inclined to rule on the request via ex parte application. The same proposed buyer who offered $2,100,000 also offered $900,000 for the Galileo Project vacant land, which has been marketed through a real estate broker for sale since August. Most of the money, the DBO learned, was gone. We have reached a Final Determination of Claims, which can be accessed through this link Final Determination of Claimsor found in the documents section of this webpage. Today, most of the roads are abandoned. April 18, 2022 Court Grants Motion to Approve Sale of Galileo Project Land. With the trial date approaching, the Receiver intends to proceed with the sale of the Galileo Project Land for $900,000 to the same individual who purchased the Ranch. As you may be aware, the Court approved the sale of the Silver Saddle Ranch and Club (Ranch) for $2,100,000. Defendants comingled and diverted funds that had been promised to be set aside and preserved for the investors benefit, making it difficult to trace exactly how investor money was being spent. The resort was listed at $1.87 million and theGalileo Project at $919,746. February 8, 2021 A Global Email was Sent to Investors Today Explaining the Receiver has Filed a Motion to Approve the Method and Procedures for a Distribution to Investors, Sale of the Silver Saddle Ranch and Club (Ranch). The price was adjusted a few times before stabilizing at $1.87 million. Silver Saddle Resort was the mechanism by which the sales were made, facilitating sales events and provided investors with a free nights stay and tours of the ranch.. But even if the sale goes through, it won't generate nearly enough money to make all the investors whole. Lets assume Investor A invests $200, Investor B invests $500, and Investor C invests $300 for a total of $1,000 invested. The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors. A lot of it was used to pay sales agents. lawsuit on September 9, 2019 against Defendants. The listing is available here: https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/. What You Should Know About This Year's 'Constant Bloom', You Need Child Care For Your Baby. The Receiver also filed a Response to the Motion to Intervene filed by Antonio Garcia and Carlos Novelo. March 9, 2022 Motion to Approve Sale of Galileo Project Land Filed. A sale will eliminate substantial ongoing expenses. The case status is Disposed - Dismissed. Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors fractional interests. And lets assume the receivership has $100 to distribute to the investors. Receivers Notice of Final Claim Determinations and Proposed Distribution. Insperity, the payroll provider, will issue W-2s to former employees by January 31, 2020 via either U.S. mail or electronic delivery. The receiver moved to expedite the sale. The Galileo Project property has been listed for $919,746. Family Says Mental Health System Failed Their Son, A Los Angeles Family Seeks Answers And Accountability After Black Mom Dies In Childbirth. Accordingly, he filed a Motion for Approval of Proposed Distribution Method and Procedures with the Court asking for permission to make a first distribution. The allegations against the defendants include that they: Ben Perez is one of the more than 2,000 people who invested money with Silver Saddle. While we have carefully considered the concerns raised by these investors, they do not have legal standing to object to the sale of the Ranch. Between 2011 and 2019, Silver Saddle made more than $56 million. The Receiver has received several inquiries concerning W-2s from former employees. It had been going on for years. By 1970, Mendelsohn had 3,000 salesmen and 24 sales offices around the world. The developer of California City, Nat Mendelsohn, built hundreds of miles of roads through the empty desert. All of the defendants are affiliated with Silver Saddle Ranch & Club, a remote desert resort in California City about an hour and a half north of L.A., where salespeople offered free weekend vacations to Latino, Filipino and Chinese consumers in exchange for sitting through a high-pressure sales pitch. We just don't do it. Even with the reduced water rates, we expect water will continue to be a substantial expense and all other expenses will continue e.g., electricity, labor, and insurance. When Kidder Matthews began marketing the Silver Saddle property, the company developed a sales brochure and highlighted the resorts features, including a host of amenities. B. Gordon and Exhibits, https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/, https://www.loopnet.com/Listing/Rutgers-Rd-Kennedy-Blvd-California-City-CA/20743529/. For example, to date the Receiver has paid $285,580 for water alone. But by the late 1960s, people who had bought land in California City were starting to realize that the growth they'd been promised wasn't happening. The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors. Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors fractional interests. The ranch and the property were initially marketed in May under real estate company Kidder Matthews, with Teresia Knight and Greg Myers as the listing agents. This case was filed in San Diego County Superior Courts, San Diego Central Courthouse located in San Diego, California. As such, while we have carefully considered the concerns raised by these investors, they do not have legal standing to object to the sale. Silver Saddle Ranch & Club Inc :: Superior Court of California, County of Los Angeles :: State Civil Lawsuit No. My 8-episode investigative podcast, California City, seeks to answer that question, as well as a bunch of others that came up over the course of my reporting. If no objections are filed with the Court, the Receiver will promptly file a proposed Order approving the Receivers claim determinations. The Receiver determined that it is necessary to reopen the sales process and allow all interested parties to present their best and final offers. On April 15, 2022, the Court held a hearing on the Receivers Motion to Approve the Sale of the Galileo Project Land. At the same time the Receiver accepted an offer to purchase the Silver Saddle Ranch, he accepted an offer to purchase the Galileo Project Land. Both properties are located in Cal Citys Second Community. The Attorney Generals office didnt immediately respond to a request for comment. 4, 2022), Gordon Decl. This will involve (1) calculating each investors claim and then (2) dividing this by the aggregate amount of all investor claims to get a pro rata figure which (3) will be multiplied by the amount available for distribution. SACRAMENTO - The Department of Business Oversight announced Oct. 1 that a state judge has granted its request to shut down an alleged investment fraud that collected more than $30 million from illegal land sales and other charges associated with the Silver Saddle Ranch & Club in California City. 7. Silver Saddle Ranch & Club, Inc. Summary: This case is a class action lawsuit against Silver Saddle Ranch & Club, Inc. for violations of consumer fraud. The current sales brochure for the Ranch and the Galileo Project can be found in the Documents section of this webpage. One offer fell too low beneath the listing price. The case status is Not Classified By Court. For decades, real estate developers have sold a dream here: if you buy land now, youll be rich one day. Prosecutors charged Thomas Maney, the 83 year-old owner of Silver Saddle, Marian Ducreux, 68, one of the companys top sales people, and seven other former sales agents, managers and employees of the ranch in late May. This class action lawsuit was filed on 01/25/2022 in Orange County Superior Court. An escrow account was opened on Sept. 29 with a $100,000 deposit. But in an interview, Maney told me he and Silver Saddle have nothing in common with Nat Mendelsohn or Great Western Cities. SILVER SADDLE TARGETED A VERY SPECIFIC TYPE OF CUSTOMER: LATINO, FILIPINO AND CHINESE PEOPLE, MOST OF WHOM LIVED IN CALIFORNIA AND OFTEN SPOKE ENGLISH AS A SECOND LANGUAGE. As the Receiver, it is Mr. McNamaras job to identify, pursue, collect, and preserve the assets of the Receivership Estate while the lawsuit proceeds. Our complaint services are free and our team of expert mediators will assist in resolving complaints with businesses. The Receiver selected Kidder Mathews as the real estate brokers to market the Ranch property, and the listing went active on May 8, 2020. Any response must be filed before the hearing. No, the Ranch was permanently closed and recently sold to a third party pursuant to a This will ensure the sales process is healthy and will maximize the sales price, which is in the best interest of the Receivership Estate. A 1969 newspaper ad for the real estate training program that Nat Mendelsohn used to sell so much land, "Land for sale" signs litter the empty desert in California City. The idea was that the land would appreciate in value, and when it did, all the co-owners could sell it to a developer and make a lot of money. The Courts decision means that when the sale closes, the Silver Saddle investors will no longer have an interest in the Galileo Project Land. The second offer was made by Jones the night of Sunday, Sept. 13 for $1.8 million, with an $800,000 offer for the Project property. They sued Mendelsohn's company, which was then known as Great Western Cities. The case status is Other. The Galileo Project property is listed for $919,746. Please notify us immediately if your mailing address has changed. According to a written declaration from Knight, the listing agent, she and her partner attempted to contact Jones multiple times and spoke with him twice. Importantly, the Receiver intends to request the Court authorize that the Galileo lands be conveyed with a clear title and free of the Galileo investors fractional interests. Last year, the Receiver sought the Courts permission to approve the sale of land owned by Receivership Defendant High Plains Mesa Holdings, LP, for $4,100,000.
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