Previously on California City, real estate is the basis of all wealth, period, and we thought it was the golden opportunity and we're going to make millions off of it. You know, whether we are immigrants and that we start in America, we cannot imagine just happened to us.

I don't know. Maybe I have the charisma that my need supposed to be for my future. And now I lose my future. I lose hope. You're ready, James. Let's do it at 53. Time to go.

By the time James and I confronted the president of Silver Saddle Ranch and Club, Tom Chaney, I've been reporting on California City on and off for almost three years. James, I had been to Silver Saddle before just to check it out. We even bought souvenir mugs with cash, obviously, because we didn't want them to have our credit card information. But today we were talking to the man in charge, Tom Máni.

We'd obsessed about this interview for days. My senior producer and I even roleplayed she was Tom and I was me. So I was ready, but I was still nervous.

How are you feeling now about Tom's interview? I have my left arm up because I'm sweating and I need to air up my armpit. What I'm telling you just I don't want to get, like, sweat stains before we even get there. Oh, man.

So we turned right out of the parking lot of the best western, which is the only hotel in California city. We drove to the edge of town and we kept going into the desert. It had rained the night before in the air, tasted clean and cold.

It's really beautiful right now. It just looks like a Western film with the white clouds and the slightly rainy clouds in the sky.

As we drove away from town, I thought about everyone who had ever made this drive over the past 60 years Nat Mendelson, Catherine Efford, all the thousands of ups, Ken Donnis, undercover investigators, Marion Decru, Ben Perez and Tom Máni. As we got closer, we saw the road snaking up Gallileo Hill, we saw the model homes in that weird half built neighborhood, we saw the cottonwoods and the sycamores, the crowd, the shore of Lake Máni.

We rolled down our windows and we smelled the patrica. Shit about cigarette's. Now I'm starting to get nervous. Oh, the you on cigarettes would be that, and because now we're turning to go into the silver saddle. So here's what I knew about Tom Máni at this point, I knew Tom was 79. I knew he was a lawyer. I knew that today he was the president of Silver Saddle. But I knew in the 70s he'd worked for Great Western cities and I knew he'd been pretty high up the senior vice president and general counsel.

I knew Tom was there during the Federal Trade Commission investigation. I knew he blamed Nat Mendelson for all the problems. I knew Tom and Ken. Donny had both signed the FTC settlement. Their signatures were both on page 21, just centimetres apart. I knew Tom and his business partners had bought a lot of land from Great Western cities after it went bankrupt in 1984. I knew they bought Silver Saddle Ranch and I knew they kept selling land. I knew that.

Tom, in other words, was the link to the past.

I knew Tom had once lived in Carmel, California, in a four bedroom house with six fireplaces, a sauna and a view of the sea. I knew his wife, Sharon, was an abstract painter, and I knew Tom now lived in Lancaster, California, in a five bedroom house with only four fireplaces, stone floors and a view of the desert. But there were things I didn't know.

I didn't know Tom Mahoney's intentions. Did he believe what his salespeople were saying?

Did he believe that his land banking project really was a good investment? Did he believe that 60 year old refrain the California city was on the verge of booming?

Or was he just trying to make as much money as he could? The only way he knew how. I'm Emily Guerin and welcome back to California City, Episode five.

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.

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 is black and brown people that we can do is be happy.

Subscribe to the California Report magazine podcast for those only in California stories. There's a couple of nice cars, administrative office, do you think that's where we should go? Um, let's meet him at the lobby. I don't think they would assume we'd go to the administrative office. Silver Saddle Ranch and Club was closed for the winter.

So there wasn't really anyone around. When James and I drove in past the unmanned guardhouse, the only cars in the parking lot were a couple of pickup trucks and a bright red Tesla, which I would later learn was Tom's. As we walked up to the clubhouse, a black cat named Midnite came up and rubbed against my legs.

Got that cat is always here.

I mean, like I can face. Thank you. We have an appointment with Debbie. Yes, ma'am. OK. Hi there. Hey. Hi. How are you? Tall Thomas. I'm Emily. This is my colleague James. Nice to meet you.

Tom had been reluctant to talk to us. He told his director of operations, Debbie Nicastro, that he thought we were going to make Silver Saddle look bad. But she convinced him.

She told me she appreciated ethical, investigative, unbiased journalism. Thanks for breakfast here.

We actually had some of the best Western, but thank you. Now, do you want more coffee?

There was an entire untouched buffet station set up in the empty dining room.

Apparently for us, it was actually a little baffling how welcoming they were given what we were there to do and what we were about to ask them. We sat down and Tom began swiping on his phone, looking at pictures of the ranch right now from a helicopter.

I had asked Tom and Debbie if I could record our conversation, and they said yes, but I would learn later that they, too, had recorded our conversation secretly.

And looking back on it, I think this moment with Tom swiping on his phone, maybe that was when he started recording. I kept trying to start the interview, but he kept interrupting to show me pictures.

So I just want to thank you both in advance for being willing to do this. And it's a good one, too. That is a good one.

Tom is pretty ripped for his age. He was wearing a short sleeved polo shirt and I think I saw a tattoo peeking out on his right arm.

Debbie sat next to him looking like a middle aged Farrah Fawcett with bangles and tight jeans. I was still sweaty. My palms were all clammy on the microphone because I was nervous that Tom would get angry or yell or kick us out. But it wasn't like that. It was worse. It was quiet. It was calm. Tom never raised his voice. He didn't need to because according to him, he'd done nothing wrong.

Well, first of all, we've never misrepresented. We just don't do it. You know, I mean, this is the way I live my life. We never had any any problems, did we? Do you know, we didn't have any none.

But we knew they knew that wasn't true. So James and I started walking Tom and Debbie through the complaints we'd heard about Silver Saddle.

And so when they come to the ranch, they're unaware that there's going to be a sales.

That's not true. Actually, there is a I wish I had the marketing material with me. It's made very, very, very clear that you are coming for a sales presentation and that's going to be at least a 90 minute tour. Yeah, that is required.

It's a requirement of you coming.

It's a requirement if you come to make sure Tom rejected the accusation that Silver Saddle targets people who don't speak English.

Well, I just think that's a terrible thing to say. It's like we're you know, Hispanics are more than 50 percent. Of the population in California to say, oh, you're selling to people who don't speak English. I mean, there are a lot of people like that in California.

It's the majority, actually, actually, about 20 percent of Californians don't speak English well. And either way, that wasn't my point. My point was that there is a difference between running a business that caters to certain kinds of people and targeting them with a confusing sales pitch bottom, denied that to our salespeople.

All spoke their languages so they understood what they were buying and some of the primary documents we translated into their languages.

It just seems like there are a not insignificant number of people that just don't really understand what they're buying.

I I don't know if that's true or not, a lot of people had told me about these kind of wild claims that the real estate agents make during the sales pitch. So I asked him about that.

I've talked to multiple people who said I bought this because I was told I would double my money in a year.

I mean, that's that's what someone God forbid we would never do, that they'd be fired on the spot if we heard it.

Definitely nobody's ever told us that Silver Saddle is a long term investment. They said long term, like, how long term are we talking about?

We don't know.

But we say long term, I swear, I tried to pin them down on how long long term was like decades in the future, 10, 20 years, probably.

Yeah, I, I, I agree with that. I was getting nowhere. So I asked them about the high pressure tactics that sales agents like Marion Decru supposedly use, which Tom also denied.

We never give anybody a bad time. If they don't buy, we shake their hand just like everybody else and give them their gifts and away they go.

Tom made me feel like everything was crystal clear. He made me doubt myself, doubt everything that I had learned, which was a lot. So I got specific. I opened my manila folder and I slid Debbie and Tom a copy of the text messages that Marion had sent Ben after he'd begun trying to get his money back, the one where she'd said, quote, You emailed the company bad about me. I treated you right. And now you're telling people I lied.

I will sue you for defamation of character and false accusations if you will not stop this.

Well, she's an independent contractor. If somebody said something about her that she felt was defamatory and false, I guess she has a right to do it. What do you mean? She's an independent contractor. She's not. And they're not employees here. None of these are my sales are these are licensed real estate agents and they are independent contractors. So are you saying that you're not responsible for their sort of their behavior or the way they interact with their customer or their clients?

Well, they have to follow our rules or they can't work for us. Debbie looked over the text message for another minute or so. Well, I talked about Ben and then she pushed it away and looked me straight in the eye. I'll tell you right now, I do not think Marianne wrote this. So do you think that he's she's making this up? I'm just saying I don't think no, I can't speculate as to what this is. I'm just saying I don't when I read this, I don't think Marianne wrote it, but Marianne did write it.

She told me so. And when Debbie asked her about it later, she admitted it. The interview went on like this for three hours. Tom denied he sold land for up to one hundred times what it's worth, what they're buying more than just the land. He denied silverside all had anything in common with great Western cities, even though a series of different companies. Actually, he denied that his vision for the future of California city had anything to do with not Mendelson's.

You don't you don't think so? No. But by the end, Tom and Debbie switched tactics. They acknowledged that there are could be problems at Silver Saddle, but they weren't to blame. Their customers were the two thousand or so people who'd bought shares of the land banking project for nearly 60 million dollars.

Well, if you're talking to people who want to get out of the deal, they may see all kinds of things you never know they want out. Right? Right. So what do you saying I'm saying they may not they may exaggerate their claims, you know. It looks like somebody with this car and something goes wrong with it and he says all this went wrong, that went wrong, this went wrong. This car's no good. I want my money back.

Yeah. In many, you know, whether it be financial, you know, it's an emotional sale. Oh, my God, I want to do this. You know, we've all gone through that. I mean, I'll speak for myself. Oh, what did I just do? Why did I you know, I went to buy a Volkswagen. I just bought a Mercedes. You know, why did I do that? Now I'm locked in. OK, there's but there is buyer's remorse.

And they blamed their salespeople, too. Debbie was essentially saying that if Tom had done anything wrong, it was being too trusting.

Tom had been really been taken advantage of by a lot of employees here. His vision is very, very real. He's brilliant as to his ideas and how he structures things. And you start trusting and putting faith in people.

And sometimes that bite you just you know, we're taking a very hard look at everything that we're doing to make sure that we can eliminate as much of these problems as you're mentioning.

They can eliminate as much of these problems as I'm mentioning.

After three hours, we stumbled out into the early spring sunlight. We said goodbye to midnight and we tried to make sense of what had just happened.

That was like the nicest confrontational interview I've ever done. Yeah, I was going to say that, too. It was even the tough questions. They were smiling through them. Yeah, my takeaway is that either they really don't know what the sales people are saying or they're totally bullshitting us.

We drove back into town. James bought cigarettes and I hit up the only coffee shop in California city, the McDonald's, then we turned left on California City Boulevard and we headed back to L.A.. Too tired to talk. When I got home, I took a shower. I made some soup and I collapsed on the couch. I feel like maybe they're not as bad as I thought they were. I don't know.

I guess I started to feel like, you know, I guess if you think about it as like a long term investment, I mean, I wouldn't do that, but.

It it doesn't seem like that ridiculous. So many people had told me they felt like Silver Saddle had scammed them. What if they were wrong? What if I was wrong? It is incredibly disorienting when you think you know something, but then someone insists that you're wrong and they say it over and over and over in the calmest possible way until you begin to think maybe this person is right. I feel like this happens a lot in America right now, but I think I'm particularly susceptible to it.

I think it's why I ended up getting married. I was on the fence, but my boyfriend at the time was convinced and convincing. Eleven months later, we split up. But honestly, I knew the moment he proposed that it was a bad idea. I went through with it because at that point in my life, it was just easier to say yes than to say no. And I wanted it to be true. I needed someone to help me make sense of what had just happened with Tom and Debbie, and the only person I thought might be able to provide some semblance of clarity was Kanani.

I was going to a convicted murderer for advice. That's after a break. Well, so I sat down with Tom Máni and I did, yeah, I did this and all my family did he remember me, Ken being Ken wanted to talk exclusively about the issue that concerned him, his big FCTC settlement from 1977.

Ken had made sure the agreement covered all of great Western cities, successors and subsidiaries forever. But Tom didn't think it applied to Silver Saddle, which I thought was weird because Tom had continued using Ken's warning label on Silver Saddles contracts, the one that said the value of this land is uncertain. Do not count on an increase in value.

OK, but as Silver Saddle bound by that FDC judgment, you don't.

You don't think so? No.

OK, I just totally different.

Even though series of different companies actually OK, even though you could be viewed as us as a successor company because you had worked for Great Western.

Not really a totally different subject. I would love to get him on the witness stand in federal court. Oh, that's great stuff right there.

I told Ken about how Tom had been so calm and confident as he denied everything and how it left me feeling so confused. So, Emily.

So, Emily, may I just say congratulations. You've just been exposed to a first class snake oil artist straight up. Trust me, he knows whatever act he's putting on, you know, really.

So you think he's just kind of bullshitting me?

You hear me, Tom? I'm talking to you right now. Kaminey, shame on you. I know it's kind of weird, but Ken's a little pep talk did help. Afterwards, I went back and I read all the transcripts of all the interviews I'd done with people who bought into Silver Saddle. The Vietnamese refugee who trusted California's laws would protect him from scams, the home health nurse who had to choose between paying silver saddle and buying chicken, eggs and milk.

The young dad fresh out of jail with only a thousand dollars in the bank and a fussy baby in his arms. All of us were confused after we left Silver Saddle and honestly, I started to wonder if that was intentional, maybe Tom and his sales agents tried to make people feel this way because that's how Ben Perez felt to when he came back from Silver Saddle in July 2017.

He told me he couldn't tell what was real and what was a lie, which is how he ended up ensnaring his friends.

Marion had told Ben not to worry. All he needed to do was invite his friends and he'd make a bunch of money.

She told me like, this is super easy, guys, just 10 people. And then you're going to get 20000 plus additional ten thousand dollars.

But when Ben talks about this, there's a lot of inconsistencies in his story.

When I asked him if he invited his friends to Silver Saddle before or after, he decided it was a scam. At first he said after, but then he said he'd been 50/50 at the time. When I asked him if he warned his friends not to buy anything, he said yes, but then he said no.

And when I asked him how long it took him to realize he'd made a huge mistake, his answer ranged from a few days to a few weeks. I realized I had seen Ben as just one thing, a victim, but of course, like everything in this story, it's more complicated. So I went to meet one of the people that Ben had brought out, Silver Saddle, his friend Michael always kind of let it all over. Oh, don't worry about it.

Usually never lets you. It was pouring in. The wind chimes outside his door were banging around in gusts of wind. There was so much water.

When I got inside, Michael offered me cold water, Jamison Coke or Nescafe. I said yes to the next cafe and we sat down at his kitchen table.

My name is Michael Burns and I'm from Union City and I happened to go when I went to Sidesaddle Ranch about a year ago, if I'm not mistaken. Silver Saddle. Silver Saddle. I'm sorry. Silver Saddle Ranch. How'd you find out about it? Well, Benjamin is a good friend of mine. And he said, hey, what are you guys doing this weekend when you guys come with me to this resort? I know. So sure. Why not?

I have nothing planned. But at that time, though, he didn't tell me about it was an investment thing.

Michael is kind of like Ben's big brother. And he said he immediately got a weird vibe from Silver Saddle, how he's been acting before the tour.

Tell you the truth, Ben was acting kind of fidgety, fidgety, yeah, he wasn't his normal self, you know, his relaxed state.

Michael sat through the sales pitch and thought to himself, these people are liars. So afterwards, he pulled Ben aside and he kind of reprimanded him.

Why the hell did you do this? Why are you so stupid and kind of thing like that? Why don't you think this over? But, you know, at the other side, I actually just didn't want to make him feel so bad because he did invest a lot of his money and he really believed in this endeavor. He did, yes. How could you tell?

Because he's actually he actually asked more friends to actually go to this resort place and invest.

He didn't just stop with us. He didn't give up.

Ben says he brought at least eight friends to solve or settle in at least three. But in fact and Decru told me at least five of Ben's referrals spent money. It took Ben nine weeks to make up his mind about Silver Saddle by mid-September, 2017. He began emailing company management, trying to get his money back and saying he thought he'd been scammed. That's when Marion threatened to sue him if he didn't shut up. I asked him if he felt like he was complicit.

Do you feel like because you invited people, you helped Silver Saddle get more people into the scam? Mm. Now, nothing that we. OK, because I could see somebody who was like looking at it from the outside being like, wait, Ben is a victim, but he also made other people victims, do you know what I mean? Yeah.

It wasn't a tragedy that occurred, it wasn't a failure then, did it, he knew in order to get his money back, his friends had to buy in. Do you feel bad that you brought people there very bad. I feel very bad. I thought a lot about how this all makes me feel about Ben. He's complicated based on everything I've learned about Silver Saddle from dozens of people who visited or bought in. I do think Silver Saddle took advantage of him.

I think they deliberately confused him with their sales pitch. And I think they convinced him and his friends to lure even more people into their web.

But I also think Ben knew what he was doing. He felt like something wasn't right, but he invited people there anyway. And he didn't warn everyone. He just warned his family. I think he was self-interested and I think he was just trying to get his money back. I know that's what he's wanted this whole time.

I really hope to get that money that I'm seeking sell to everyone to help me. Yeah, I don't know what to do.

I've been doing this since day one, and, you know, and yeah, you know, no one can help me. I don't know where to go.

When I first started reporting this story, I figured no one in California city knew about Silver Saddle. How else could something this bad have gone on for so long? But the more time I spent there, the more naive I realized I'd been. The people in town do know about Silver Saddle and they talk about it as if it's run by the mob. It's not. But that's the level of fear that people have when they talk about it.

You never know if you talk to somebody, it's going to be beat up and ostracized or whatever, because this is such a small knit community. Wait a minute.

I am in business. I don't want to say anything of a suicide, OK? No, don't don't don't do that.

So you don't want to say something and end up not being able to find your body somewhere because there's been a reputation up here in the high desert to places for people to just dump bodies.

I want to be clear, as far as I know, no one from Silver Saddle or Great Western City's ever murdered anyone or buried bodies in the desert.

But it does seem like everyone in town knows that something sketchy is going on out there, because whenever I asked about it, they wouldn't talk. And I think that's part of how this thing has been happening for 60 years. It's an open secret. That's next time on California City.

California City is written and reported by me, Emily Guerin, R-1 champion Knicks and James Kim that our sound design, production and story editing. Mike Kessler is our editor, fact checking and additional production by Gabriel Donatos, mixing by our engineer Valentino Ribeira, original music by Andrew Eappen. 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.

California City is a production of last studios.