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[00:00:00]

For over 100 years, UCLA extension has helped people shape brighter futures through the power of education, choose from thousands of continuing education courses and explore endless possibilities for quarter start September 28th and roll now at UCLA extension dot edu. Previously on California City, wait a minute, I am in business, I don't want to see anything of a that, OK? No, don't, don't, don't do that.

[00:00:28]

Well, first of all, we've never misrepresented. We just don't do it, you know? I mean, it's just the way I live my life.

[00:00:34]

My take away is that either they really don't know what the sales people are saying or they're totally bullshitting us. You hear me, Tom? I'm talking to you right now. Shame on you. Do you feel bad that you brought people there very bad.

[00:00:52]

I feel very bad. If you don't count the American Legion and the VFW California city is a one bar town, the bar is inside a Chinese restaurant called the Green Teagarden. They have a wood paneled jukebox that plays mostly country. Although James and I picked Jewel and TLC off playlist written in Sharpie, we shot pool in the neon glow of red Budweiser signs. We drank expired craft beer. We noticed the 20 year old cigarette burns on the red carpet.

[00:01:29]

Part of the reason and we hung out there so much was that on our first day in town, we'd gotten a tip that the woman who owned the Green Tea Garden knew a lot about Silver Saddle.

[00:01:39]

It was James who'd gotten the tip. He was hanging out in the park on Election Day in twenty eighteen, and he started talking to this guy named John Davidson, who just got done voting. His big issue was the gas tax. He didn't want to pay more to drive his truck. He was in his 50s ex air force, his eyes hidden behind sunglasses and his hair hidden beneath the trucker hat. He had a handlebar mustache, no hiding that and.

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Yeah, how would you describe California City? Um, it's a small town, small community in the middle of nowhere. Not much to do out here unless you're on a dirt bike or playing sports.

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John thought California City was going to shit, which we noticed was a common opinion among the older white people in town.

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And what has changed since you've lived here? Mm hmm. They allowed Section eight in room. The city. Can you elaborate? Back in 95, when I came out here, the crime was very low. Yeah. And now that they allowed Section eight and it's caused a lot of problems, it is a small community and you don't have that much law enforcement. And then the other thing we heard a lot about is this place called Silver Saddle Ranch.

[00:02:55]

Do you know anything about it? Yeah, I think it's a corrupted place. Why do you say that? So it's a real estate scheme, you know, selling properties, promising that there's going to be improvements, the city's growing and all that, and nothing ever happened. So people default on their taxes, on the property and guess who repurchased it once it goes in foreclosure? Who do you think purchase it? They do. There you go.

[00:03:17]

Yeah, at the time, James and I did not understand what John was talking about, but we do now. When James asked him if he'd be willing to talk any further, he put his key in the ignition and he muttered, Nah, I'm good. It's a small town. They might take me out.

[00:03:33]

I have to say is that like every time a conversation heads in that direction, people get afraid to talk. Why is that? That's just a small town. People know everybody. And then came the tenth. There's a very Teagarden talk to them. Green Teegarden. He's been there for a long time. Interesting. OK. We went that same night, we went late, and the place was nearly empty. We sat down at a booth and we ordered cream cheese wontons, a thin woman and a boxy sweatshirt and loose jeans came over to deliver them.

[00:04:14]

CATHY Yep, she owned the place. We started chatting and after a minute or so, I did what I always do. So this is our gear. This is my microphone. Likes to be close to people because in it, you know, it's just how are you going to ask me a question or some shit? Yeah, James will ask you. I'll just hold it. Yeah. I guess I could ask you, would you would you tell us your name first.

[00:04:38]

Wait, hold on. Oh. Do you feel comfortable doing.

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This is the only tape I have of Cathy, because once I pulled out my mic and we started asking her about Silver Saddle, she started backing away from the table and waving her hands in front of her. Wait a minute.

[00:04:52]

I am in business. I don't want to say anything of a show. Is that OK? No, don't, don't. Don't do that. So. It was going to be a lot harder than we thought to get people to talk about Silver Saddle, and I think that's part of the reason they've managed to stay in business for so long. They're kind of an open secret. I'm Emily Guerin and welcome to California City Episode six. For over 100 years, UCLA extension has helped people shape brighter futures to the power of education.

[00:05:31]

They offered thousands of continuing education courses for career advancement and personal growth, choose subjects ranging from entertainment and digital technology to business education, and explore endless possibilities this fall and learn from anywhere. Fall quarter starts September 28th. And right now at UCLA Extension Dunedoo, Edu.

[00:05:51]

I'm Sasha Khokha, host of the California Report magazine. Take a road trip for your ears to meet the real people who make the Golden State unique.

[00:06:00]

I'm the kissing disc jockey, gets one hundred miles in any direction from here to a large town where you can buy groceries. I think the most radical thing as black and brown people that we can do is be happy.

[00:06:13]

Subscribe to the California Report magazine podcast for those only in California stories. Kathy didn't want to talk to us about Silver Saddle, but she kept feeding us names of people who might. And one Thursday night at the bar, Kathy cornered a woman who was playing pool and instructed her to tell us everything she knew. So the three of us went out back and we stood in the wet alley beneath the streetlight.

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It was cold and she was shivering in a thin cotton sweatshirt. She was pretty drunk and I felt kind of slimy to be interviewing her at all. This isn't what she sounds like, by the way. She asked us to distort her voice.

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So what should we know about Silver Saddle?

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I've been here for a long time and I know they're pretty scandalous as far as to try to sell people land, which they cannot resell because it's out in the middle of nowhere. I really want to curse. I'm sorry. You can say whatever you want.

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No more going because and I could tell this woman did want to talk to us, but it also felt like she was holding something back because it is a small knit community.

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And so everybody knows everybody. So you never know if you talk to somebody, if you're going to be beat up or ostracized or whatever, because this is such a small knit community. And then she backed away from the microphone and silently mouthed, I'm done. This kept happening. It happened at a diner at the California city airport called Foxy's Landing, a waitress there once told me she served salespeople coffee as they pushed paperwork on potential clients. She thought it was weird, but it was none of her business.

[00:08:20]

It happened on top of a boot on a hike with a woman who knows the name of like every single Mojave Desert planet. Although she agreed to an interview, she later asked me not to use her name. She reminded me she had to live in California city. She had a daughter. She was afraid of the repercussions of being seen as someone who would talk to a reporter about Silver Saddle.

[00:08:45]

It was starting to feel like no one was willing to talk about Silver Saddle unless they were drunk or anonymous or both. Until one night at the Green Tea Garden, when Cathy gave us another name, Teresa Grimshaw. Teresa is a real estate agent who specializes in selling land in California City, her Zillow page says, I believe in honesty and fair dealing, not only with my clients, but with everyone connected in a real estate transaction.

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Teresa says she gets lots of calls from unhappy people who bought land at Silver Saddle.

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I probably get a call a day. Are you serious? Yeah, well, that's way more than I thought you were going to say. She gently tells them that, yes, although she is a real estate agent, she cannot sell their land.

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So you're saying there's almost no resale market for the lots that Silver Saddle is selling?

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Yes. Yes, that's what I'm saying.

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Do you feel like the buyers knew that going into it based on your conversations with them?

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No, but most of them, believe it or not, they appreciate my honesty. I've had very few, if any, buddy get angry at me for telling them my opinion. We were talking in her real estate office and echoey building on California City Boulevard. The wind kept rattling the windows. Theresa's long gray hair was wrapped around her shoulders like a shawl. She looked small and cold and her big office chair.

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I wanted to put a sign out there telling people, Do your due diligence, beware. Caveat emptor, buyer beware.

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What would the sign look like? It would have been at least four by eight.

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It would have been and like bright yellow with big letters on it.

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I wonder what would have happened if Theresa Sign had been up when Ben Perez was driving out to Silver Saddle, a big yellow and black sign, four feet by eight feet, like you might see at a construction site. A sign warning you not to buy land out here from a woman who sells land out here. Maybe Ben would have turned to his buddy Clifford and asked, what the hell is that? Maybe Clifford would have ignored him, just brushed him off.

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But we'll never know because Teresa never built that sign. You don't want to say something and end up not being able to find your body somewhere. There's a lot of land out there because there's been a reputation up here in the high desert to places for people to just dump bodies.

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I said this once, but I'm going to say it again. I talked to a lot of people in California city and no one ever accused anyone affiliated with Silver Saddle of a violent crime ever. But I understand why Theresa feels scared, California City does feel kind of lawless. A police sergeant here told me they do find bodies out in the desert occasionally along with trash and stolen cars and other things. People want to disappear. Dateline did a story last year about the town's eight unsolved murders and on the outskirts of town, there's three billboards that a mother put up admonishing the police to solve her daughter's murder.

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Do you feel like a lot of people in town know what Silver Saddle is doing and how they operate? Oh, yes, everybody knows. Yes.

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But the thing is, is what they're doing is, as far as we know, is not illegal.

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The police sergeant I talked to said he had no idea about Silver Saddle. I don't get involved in real estate, he told me. But there was one California city cop who had been suspicious of them, a guy named Steve Kolaric.

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Steve grew up in Arizona, but he visited California City a ton as a kid because his grandparents owned the concrete plant in town. He told me it was idyllic back in the 60s and 70s before Great Western cities declared bankruptcy and the city began to fall apart in the early 80s. Steve became a cop in California city and it didn't take long before he started hearing rumors about Silver Saddle from one of the older guys on the police force. He came right out and said that Silver Saddle was was was a scale.

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You know, I'll admit, I up to that point, I didn't pay attention to that stuff. I didn't care. It didn't interest me that they weren't selling drugs or gang banging. I didn't care for years. Steve didn't think about Silver Saddle, but that changed around the time his infant grandson died two days after Easter in 2002. The historical society offered to build a little memorial to the baby boy along this old wagon trail that once ran through town, it's mostly been paved over, but Steve had heard that way out in the desert, the ruts were still there, worn into the dirt by heavy wagon wheels more than 100 years ago.

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For some reason, Steve became obsessed with finding these ruts. He told me it just seemed like something I needed to do.

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Got on my dirt bike and I started writing and I got to find this trail was the ruts that I couldn't find the ruts. Steve Criss crossed the empty plane on his Honda, searching for a thing that almost no one else cared to find, and over time, his obsession morphed into something larger. The history of California city. Steve began collecting old ads, articles and documents about Nat Mendelson and the town's early pioneers. He had an entire white banker's box full of the stuff and he brought it to my room at the best western on one of my visits and began rifling through it most.

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Steve is a media guy, small eyes, big ears and divots on the sides of his head from years of wearing his sunglasses to type, he has a retired cop buzzcut and a gray mustache that you can almost hear as he talks.

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This is for you. What is this?

[00:15:14]

I wrote that Steve pulled out a piece of yellow line notebook paper. Is this your little timeline of who owned what and when? Yeah, this was my first sketch that I did.

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It was a handwritten timeline of all the major events in the history of California city in the 1950s, when not Mendelson started selling land in the 70s when his company got sold to the Hunt Brothers.

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And it goes to great Western cities. And then you have this whole period of class action lawsuits.

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And Ralph Nader also in the 70s, you have the lawsuits and the investigations. And then in the 80s, Silver Saddles creation. When Steve was making this timeline, he wasn't totally sure if Silver Saddle had anything to do with great Western cities or not. They seemed kind of similar, but he just didn't know. So he started asking around quietly. He wasn't building a case, but he said it kind of felt that way, had to be careful.

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And what questions I asked because I didn't sometimes I didn't know who to. And there was most of the time I didn't ask questions. I tried to find out the answers on my own. One day Steve talked to one of Silverstone's owners, this guy named Jim Quiggle, who died before I got a chance to meet him. He worked with Tom Máni for years. And Steve said the guy just seemed evasive, which Steve thought was weird. I mean, most people, when they talk about history, they want to share what they know.

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Steve became the police chief in California city in 2008, and after that, he has two of his detectives to talk to the Kern County district attorney about how to investigate Silver Saddle. And Steve says the D.A. told him, don't even waste your time. There was no way out of it. There was a crime, had the resources to do a financial White-Collar investigation like that.

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Plus, Steve says no one complained about Silver Saddle to the police department. There was no victim without a victim. He didn't have a case. So Steve, let it go, and then in 2011, he retired, he focused on his rock collection, his dioxins and his wagon wheel Rut's. But I could tell it bothered Steve, it seemed like he regretted not doing more. He told me once back in April. Twenty eighteen.

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Emily, I think after a while you resigned yourself to what fight you can win and what fight you can do more damage to yourself if you try to push the issue. A few months later, James tried to ask him again about his regrets, but something had changed. Yeah, so, you know, going back on the phone conversation you had with Emily, I thought I, you know, heard that you did have some sort of regrets about not looking into them of sorts.

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I didn't lose any sleep over it, if that's what you're asking. I mean, with you, would you say that Silverside was doing any sort of suspicious activity? I never had any personal knowledge of that.

[00:18:29]

Suddenly, he made silverside allowed to be this fun after working out, looking back on it, what I remember is countless Christmas parties, retirement parties, and it's nice, good food, really good food, good atmosphere, wonderful love dancing. That's that's what I remember. That's probably what I'll choose to remember, what he'll choose to remember.

[00:18:58]

I'm still struggling to make sense of what he did next. He handed me his banker's box of documents and he told me to make copies of whatever I wanted. He said he trusted me.

[00:19:08]

You're more than welcome for me to leave this. I can leave this here. And you guys can just go through, oh, like overnight and we can bring you back. I trust you, OK?

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He said he was glad I was looking into Silver Saddle. He said I was one of the good ones. But then he started ignoring me. He stopped answering my calls and texts the last time we talked, it was only because he butt dialed me on Thanksgiving from Catalina Island. It was our last interaction. I was starting to think the town itself was the problem, it was too small to insular, too gossipy, nobody here was going to put themselves on the line.

[00:19:49]

I needed to find people who had less at stake, so I thought back to that weird tax default foreclosure thing that John Davidson had told James about in the park, maybe Silver Saddle had a paper trail. I decided to find it. That's after a break. Here's the thing about home security companies most trap you with high prices, tricky contracts and lousy customer support.

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[00:22:25]

The Kern County administrative offices are in Bakersfield at the very bottom of the Central Valley there, next to the railroad tracks and across from the convention center where you can see a KISS concert or a monster truck rally or the bachelor live on stage. I know Bakersfield gets a bad rap, but I love it. It reminds me of all the small Great Plains cities that I used to hang out in when I lived in North Dakota. The railroads, the dust, the cattle and the coal.

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The county assessor's office is on the third floor. I signed my name on the visitor's sheet and I walked down a long carpeted hallway to a small office.

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Thank you. You're welcome. Yeah, we're sitting in my office, my name's Lee Smith, I'm the assistant assessor and I'm with Emily Guerin guaran and and I'm waiting for questions.

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OK, so have you heard of silverside?

[00:23:25]

Oh, yeah. They've been around for a long time. OK, and, um, like, what do you know about them?

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Um, well, Lee Smith reminded me of a Sunday school teacher, sweet and afraid to piss anyone off. He'd been working for the assessor for as long as I'd been alive. I asked him when he first noticed something unusual about land sales in California city.

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When was the first time you sort of started thinking that like it was a different kind of market than, say, Bakersfield?

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Um, pretty early on, pretty early on, because what were you seeing even back then?

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What we're seeing today? But Lee Smith was seen back then and today with Silver Saddle selling the same pieces of land over and over, the way it worked was somebody would buy a lot from Silver Saddle for anywhere from 10 to 40 thousand dollars. And then after a few years, they'd realize it was just a bad investment so they'd stop paying their property taxes and the county would take possession and auction it off. And at these auctions, Silver Saddle would buy the land back for like five hundred dollars and they turn it around and sell it again.

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So when you see this over and over, does it raise any red flags for you? That's a good question. Could you describe what you mean, what a red flag or a red flag means, like are they running some kind of land scam where they're ripping people off and deceiving them about the value of the land? Yes, that's a good question. That good question is one that state investigators would ask themselves later on.

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Yeah, that's a good question.

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That's a good question is what Lee Smith said when he got uncomfortable. He smiled and shifted in his seat, crossing and recrossing his legs.

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You know, the assessor's office has its role, and our role is to assess the value. We aren't necessarily an enforcement entity. We're just there to value the property. So if you're asking me if I think it's fraudulent, that's that's really not my role again.

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And I guess it's just interesting that, like the people who had noticed the trend, like your office can't can't necessarily, like, do something about it. Like, if you worry that that's a good question, you know, and and I mean, so, OK, so so this is, you know, kind of a question I have for somebody who says do something about it. So what would we what would you suggest? I mean, you could contact the D.A. They have like a consumer complaints division.

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And and a lot of people do do that. But Lee didn't contact the D.A. He wasn't one of those people. It wasn't his job. What do I want to say in Kern County? You know, this is this is not a not really a secret, you know? I mean, it's it's it's it's it's you know, it's been going on like everybody knows. This is what happens in California city. Yeah.

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And it was true. Everyone I talked to at the assessor's office that day knew that Silver Saddle was selling the same pieces of land over and over.

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The nice lady who helped me log into the property records database.

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She knew, she whispered to me, it happens a lot out there in the desert. The chief appraiser she knew, too, she told me she regularly sees people buying empty desert land for more than 10 times what she thinks it's worth.

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The Kern County treasurer and tax collector Jordan Kaufman, he also knew he runs the tax auctions.

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And for years he's watched Silver Saddle by its own land back for a couple hundred bucks.

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He actually got a law passed recently closing that loophole. But the law didn't stop Silver Saddle from selling a confusing desert real estate investment to unsuspecting people like Ben Perez.

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Is there anything that you could do about it as the tax collector?

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Not really. I mean, I focus on what my sort of constitutional duty is in the state of California, which is to, you know, get properties back and revenue producing status however I can, whether it's through a tax sale or just the normal collection of taxes.

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I wanted to know if it's not the job of the tax collector or the assessor to report or investigate the possibility of fraud. Then whose job is it? I went to the district attorney in charge of white collar crime in Kern County. He said he'd only received two complaints ever about Silver Saddle and he'd forwarded one of them to the California Department of Real Estate.

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So I asked the California Department of Real Estate, and they said they'd received 17 complaints since 1984, but nothing had come of it. They'd closed all 17 without taking any disciplinary action against Silver Saddle.

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That got me wondering about the Federal Trade Commission, the FTC told me they received 14 complaints about Silver Saddle since 2014.

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But as far as I can tell, they didn't act on any of them. I told Ken Darney about this and it really pissed him off, my alma mater has dropped the ball on this second. I'm talking to you guys and gals.

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His phone cut out, but he said, I'm talking to you guys and gals at the FTC. You really did drop the ball. You should have stopped this a long time ago.

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Ken demanded. I ask the FTC what had happened, what went wrong, why hadn't they enforced their big 1977 court judgment against Great Western cities, the one that Ken believed applied to Silver Saddle. So I did. And they wrote back and said, no comment. There was one last place to look, the Mojave Desert News. It's the only newspaper based in California City, and when I was there in the fall of twenty eighteen, there was only one reporter covering the city, this guy named Kane Wickham, who goes by Citizen Kane.

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And it was immediately apparent to me talking to Kane why the Mojave Desert News had not investigated Silver Saddle.

[00:30:22]

The former publisher had worked with Tom Máni for years.

[00:30:26]

He was one of Tom's former business partners. He was that guy Steve Kolaric had said seemed evasive. Kane once stealthily took pictures of me and James at a California city council meeting with a zoom lens, and he sent them to us later. I had no idea what to make of it. I was no longer surprised that something so bad had been going on in California city for so long, the people who are suspicious of Silver Saddle were afraid to speak up or they didn't have the time or the money or the bandwidth to investigate or they didn't think it was their job or their jurisdiction.

[00:31:08]

Which honestly made me feel tired and jaded and kind of sad. And then on October 1st, 2019, at 11, 26 a.m., an email appeared in my inbox, it read, California Department of Business Oversight sues to stop 30 million dollars.

[00:31:29]

Silver Saddle Ranch Investment Fraud. I scanned it, I saw phrases like illegal land sales, high pressure sales tactics and false promises. I saw Marion, Decru and Tasmania's names, I saw Silver Saddle and Great Western cities. I stood up at my desk and I ran and my socks over to my editor and I blurted out, oh, my God, they're finally getting shut down. That's next time on the final episode of California City. One small correction, since we fact check this story, the California Department of Real Estate received three additional complaints about Silver Saddle.

[00:32:11]

One resulted in disciplinary action against the company.

[00:32:17]

California City is written and reported by me. Emily Guerin, R-1 champion Knicks and James Kim did our sound design, production and story editing. Mike Kessler is our editor. Fact checking and additional production by Gabriel Donetta of mixing by our engineer Valentino Rivera. Original music by Andrew Eappen.

[00:32:44]

The Jane and Ron Olson Center for Investigative Reporting helped make California City possible. Ron Olson is an honorary trustee for Southern California Public Radio. The Olsson's do not have any editorial input on the stories we cover.

[00:33:01]

California City is a production of L.A. ISD studios. Let's get those heels off your feet for you. How's that feel?

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