By Emily Guerin and Gabriel Dunatov | KPCC/LAist
For decades, salespeople at a remote resort in the Mojave Desert have allegedly used high pressure sales tactics to sell land to thousands of people throughout California, including many in Filipino, Chinese and Latino communities.
Now, the California Department of Business Oversight has accused the company of fraud and illegal land sales, and shut it down.
Since 2011, Silver Saddle Ranch & Club sold empty desert land to more than 2,000 people, and brought in more than $30 million, according to the Department of Business Oversight (DBO), a state government office that regulates financial transactions.
We have been reporting on this story for nearly three years and have interviewed more than 150 people. Our reporting – like the DBO’s — found that many buyers were drawn in by a trusted friend or family member who invited them to spend a free weekend at Silver Saddle. Others said they “won” the getaway from a raffle at a grocery store.
However they learned about it, they soon made the long drive through the Mojave Desert to Silver Saddle Ranch, located on the edge of the town of California City.
Many buyers we spoke to told us they were unaware there was a mandatory sales presentation and tour.
They explained that on the final morning of their stay at the resort, sales agents separated visitors by ethnicity, then pitched each group on the idea of “landbanking,” an arrangement in which a large group of people jointly own a piece of undeveloped land. The land in question, approximately 1,000 acres of empty desert around Silver Saddle Ranch, was “in the path of a new gold rush,” according to a brochure filed in court documents. According to those we interviewed, salespeople claimed successful businessmen like Paul Allen, the co-founder of Microsoft, and Elon Musk, CEO of Tesla and SpaceX, had invested or were considering investing in the area.
“Paul Allen (co-founder of Microsoft) is expanding his interests into the area with his new Stratolaunch Space Flight Co.,” the Silver Saddle brochure claimed. “Also, Sir Richard Branson (Virgin Atlantic Airlines, Virgin Galactic, and the Virgin Group) declares … ‘Mojave is the Silicon Valley of the Space industry.’ These are only two of the many mega-entrepreneurs and business leaders NOW doing business in this dynamic area.”
“That was kinda like their whole appeal,” said Rheana Robles of El Cajon, CA, who visited Silver Saddle with her parents in 2016. “‘It may be worthless now but it’s gonna be worth a lot of money later.’”
After the presentation, salespeople packed visitors into vans and showed them model homes in a partially built neighborhood nearby, according to Robles and other buyers we interviewed. According to the DBO documents filed in court, salespeople falsely claimed the area was connected to water, electricity and telephone utilities.
Then, salespeople brought everyone back to Silver Saddle to close the deal.
Benjamin Perez of Milpitas, CA said that Marian Ducreux, a saleswoman and now co-defendant in the DBO’s lawsuit, convinced him to invest over $31,000 — which he’d been saving to open a food truck — by assuring him he’d double his money in a year. Ducreux denies this.
Perez referred multiple friends to Silver Saddle. Eventually, when he emailed Silver Saddle asking for a refund, Ducreux texted him and threatened to sue him for defamation.
According to the DBO, hundreds of people had experiences similar to Perez’s.
“The defendants used high-pressure sales tactics and false information to sell the investments,” according to a press release the DBO issued when announcing the lawsuit. “They threatened investors who later complained with lawsuits and financial harm.”
Many buyers spoke English as a second language and did not understand what they signed, according to the DBO’s complaint.
Silver Saddle’s president, Thomas Maney, was involved with a similar land sales business in the 1970s. His former employer, Great Western Cities (GWC), sold vacant land in California City, and was sued by the Federal Trade Commission for “false, misleading and deceptive practices.” The company agreed to a settlement that involved an almost $4 million refund, the largest in FTC history at the time. Maney was GWC’s senior vice president and general counsel at the time, and signed the judgement himself.
The DBO’s lawsuit against Silver Saddle is ongoing and awaiting a trial date. Those who need more information can contact Robert Lux, the DBO’s senior counsel: [email protected]. Regulatory Resolutions, the company managing the ranch property and business while the case proceeds, has a web page devoted to the case with a “frequently asked questions” page. You can also reach reporter Emily Guerin at [email protected], or listen to our podcast, California City, at laist.com/californiacity. California City is an LAist Studios production, co-distributed by LA Times Studios.
