CALIFORNIA CITY: EPISODE 8The Reckoning
Silver Saddle gets shut down and accused of fraud. Will the company - and the dream Ben Perez believed - survive? California City is a limited series with 8 episodes. Show support by subscribing wherever you get your podcasts. California City sponsors include: Sun Basket is offering $35 off your order when you go right now to SUNBASKET.com/calcity and enter promo code calcity at checkout. Try SimpliSafe today at SimpliSafe.com/CALCITY. You get free shipping and a 60-day risk free trial. There’s nothing to lose.

EPISODE 8 TRANSCRIPT

Note: California City is a podcast for a reason. You can read the transcript below, but the story is meant to be listened to. The host and a team of producers worked hard to make the podcast sound its best, and this transcript can’t capture all the voices, emotion, intonation and atmosphere in the original audio. If you’d like to quote this podcast, please check the corresponding audio first.

EMILY GUERIN: Previously on California City.

MUSIC

CATHY YIP: Oh wait a minute I'm in business I don't wanna say anything about Silver Saddle. Ok? No don’t, don’t do that.

LEE SMITH: What do I want to say, in Kern County, you know, this is, not really a secret.

THERESA GRIMSHAW: But the thing is, what they're doing isn't, as far as we know, is not illegal.

SOUND OF HIGHWAY, CAR DOOR SLAM

EMILY GUERIN: At 10 am, on Wednesday September 25, 2019, eleven people gathered in the parking lot of an industrial office park next to the airport runway in Burbank, California.

There were four employees of a company called Regulatory Resolutions, all wearing suits. Three California Highway Patrol officers, in beige uniforms with guns on their hips. Two investigators for the California Department of Business Oversight. One locksmith. And one computer forensic specialist named Joe.

They opened a door to a long hallway, and all eleven of them walked up a flight of carpeted stairs. They stopped outside a cheap-looking wooden door. There were two pieces of paper taped to it. One had a Microsoft Word clip-art smiley face giving a disembodied thumbs up. It read, “Ahh.. you made it! See...that wasn’t so bad now, was it?” The other sign said, “Welcome to Silver Saddle!” It was the company’s headquarters.

Meanwhile, managers at three different banks received an email from Regulatory Resolutions instructing them to freeze all of Silver Saddle’s bank accounts.

And 113 miles away, four CHP officers, two employees of Regulatory Resolutions, and another locksmith drove past Galileo Hill, past the gatehouse, and down the long driveway that leads to Silver Saddle Ranch.



It had been 61 years since Nat Mendelsohn started selling the dream of California City.

EMILY GUERIN: But when you went was there anything there at the time?

KATHRYN EFFORD: No! No it was just dirt.

ALEX MENDELSOHN: It’s gonna be wonderful he was very optimistic and very excited about it.

EMILY GUERIN: Forty eight years since The Nader’s Raiders called it “the big lie.”

DALLON COX: If you profit at the expense of those who are being duped then you’re evil. Literally there is an evilness to that.

EMILY GUERIN: Forty two years since Ken Donney tried to stop it.

KEN DONNEY: They prey on what we all share in humanity, which is our wishful thinking.

EMILY GUERIN: Thirty four years since Tom Maney started Silver Saddle.

EMILY GUERIN: So what are you saying?

TOM MANEY: I’m saying they may exaggerate their claims.

EMILY GUERIN: And more than 2 years since Ben Perez got home after a long, strange weekend and realized all he wanted was to get his money back.

BEN PEREZ: I feel like I lose hope. My dream is not gonna happen anymore.

EMILY GUERIN: It was another warm, sunny day in Southern California and Silver Saddle was getting shut down.

I’m Emily Guerin, and welcome to the final episode of California City.

BREAK

EMILY GUERIN: Regulatory Resolutions ran the raid on Silver Saddle that day. They’re what’s called a court-appointed receiver. They’re a company that takes control of other companies that are being sued, and they run them while the case is proceeding.

MUSIC

Getting a receiver appointed is kind of a big deal. It means the judge thinks the state is likely to win their case. It also means a judge thinks the company being sued will keep harming people unless they’re shut down.

MUSIC

EMILY GUERIN: Regulatory Resolutions wrote a detailed report of what happened on September 25. It’s kind of a play by play. And I have spent a lot of time with this document. And I also talked to someone who was there that day. But he only agreed to talk to me if I didn’t reveal his name.

SOUND OF WALKING AND KEYCHAIN CLINKING

EMILY GUERIN: Just after 10 a.m., the group opened the door and they walked inside. They found seven women and one man busy packing up 37 file cabinets worth of documents. There were boxes everywhere. Apparently they had been preparing to close the Burbank office and move everything out to California City.

One of the guys who worked for Regulatory Resolutions cooly told all the employees:

EMILY GUERIN IN DISTORTED VOICE: Everybody remain calm.

Step away from your computers.

And leave your phones on your desks.

Come with us to the breakroom.

There’s a lawsuit against Silver Saddle.

Just give me a few minutes, we need to take care of a few things.

EMILY GUERIN: The CHP officers swept the office. They looked for all the possible exits and made sure no one could sneak out a harddrive or a file folder. The locksmith changed the locks. Joe, the computer forensic specialist, began copying harddrives, emails, spreadsheets and bank statements. Then, Regulatory Resolutions began pulling people out of the break room one by one to see who knew what. After questioning them, they escorted the employees back to their desks so they could collect their coffee mugs, their sweaters, any pictures of their kids.

The team opened the file cabinets. Drawers. They opened boxes. They scanned any document that seemed interesting, and labeled what office it had come from. They worked late. They ordered sandwiches. They came in early. They worked late again.

Out in California City, Silver Saddle Ranch was nearly deserted when the authorities arrived. There were just six employees there, mostly the people who took care of the animals: 12 goats, 12 sheep, 5 chickens, 4 horses, 2 ponies, 2 burros, 2 alpacas, 2 peacocks, one llama and 4 cats, including the cat I met, Midnight.

CAT MEOWING

EMILY GUERIN: They made arrangements to move most of the animals off-site, and feed the ones that stayed behind. Then a locksmith changed the exterior locks on all the buildings. The front gate was chained shut and a makeshift plywood sign was left leaning against it. It read, in green spray paint, “No Trespassing. State Authorized Access Only.”

And then, they all left.

This raid was two years in the making. In mid-2017, this state agency called the California Department of Business Oversight received its first complaint about Silver Saddle.

The DBO regulates a lot of different financial transactions: student loans, mortgages, banks and securities. And they told me the complaint they received was from someone who had won a raffle at at Filipino grocery store. This person had gotten a call inviting them to a buffet dinner, and there, they’d been invited to spend a free weekend at Silver Saddle, where they said they were pressured into spending a bunch of money. So the DBO investigated, and came to the conclusion that Silver Saddle was selling unlicensed securities.

Okay, so let me just explain this: remember how when Ben Perez bought his share of the landbanking project, he spent $31,540? Well, when I looked at his paperwork, I realized it wasn’t a lump sum: there were a bunch of smaller charges, including $2000 to this thing called “the Capital Improvement Fund.”

And in a letter Tom Maney wrote to investors that would later wind up in court documents, he said that this fund would be used to develop the empty desert land that surrounds the ranch. But the DBO decided that the Capital Improvement Fund was actually a security -- it was something of value that you can trade, like stocks. And the DBO said Silver Saddle didn’t have a permit to sell securities.

So, in May 2018 -- one month after I began my research for this podcast -- the DBO told Silver Saddle to stop. Stop selling the Capital Improvement Fund. And stop saying untrue or misleading things about it.

In other words, the DBO wasn’t going after Silver Saddle over land sales. Because land sales isn’t what they enforce. But they could sink their teeth into this other thing: the Capital Improvement Fund.

They explained all this when I called them. And after we hung up, we went our separate ways.

I was investigating. They were investigating.

MUSIC

Silver Saddle did stop selling the Capital Improvement Fund. But they kept right on selling the landbanking project, according to the DBO.

It felt like a slap on the wrist.

So I was totally caught off guard when the email appeared in my inbox in September 2019 saying the DBO was shutting down Silver Saddle completely.

I was really curious what had changed, but DBO investigators wouldn’t talk to me. So I asked someone else, someone who was working on the case. And he told me that maybe the fact that I had been digging around had put Silver Saddle on the DBO’s radar. There was, as he put it, starting to be a drum beat.

SOFT DRUM BEAT

EMILY GUERIN: Silver Saddle was getting shut down. And there was a court hearing coming up. It was Silver Saddle’s chance to appeal. To make their case before a judge that they didn’t need Regulatory Resolutions taking control of their company. Of their 37 file cabinets, their 16 bank accounts, or their dozen sheep.

So of course I had to go. That’s after a break.

BREAK

MUSIC

EMILY GUERIN: The hearing was on October 16 at the San Diego County Superior Court. I got there early, and I sat in the front row of the courtroom as people filed in.

At the front of the seating area, there was this bailiff in uniform who paced back and forth. She barked at people to put away their phones and take off their sunglasses. And if they didn’t understand what she was saying, she just yelled louder and slower, until someone translated. Once all 42 seats were taken, she began turning people away.

At 1:30 PM, Judge Joel Woelfeil walked in in his long black robe and we all stood. He sat and we sat. Two men remained standing, facing the judge: the lawyer for the DBO, in a light grey suit, and the lawyer for Tom Maney, in a charcoal one. There was another lawyer on the phone. He didn’t mute himself, so everyone could hear his loud breathing.

Tom Maney’s lawyer argued that a court-appointed receiver was unnecessary. Shutting down Silver Saddle would do more harm than good. And there was no evidence of a cover up. The DBO’s lawyer disagreed. He said there were “suspicious transfers” of money. He said Silver Saddle had squandered tens of millions of dollars. He said they lied, and targeted unsophisticated consumers.

Then it was the judge's turn. He sided with the DBO. In order to protect the public, Silver Saddle needed to stay closed, and Regulatory Resolutions kept in charge. The whole thing maybe lasted 20 minutes. Everyone got up and filed out to the hallway.

SOUND OF MICROPHONE BEING TURNED ON, SOFT RUSTLING

EMILY GUERIN: I tried to catch the DBO’s lawyer.

EMILY GUERIN: Hi, are you with the DBO?

DBO LAWYER: Yes.

EMILY GUERIN: I’m Emily Guerin, I’m a reporter.

DBO LAWYER: Yeah, I can’t make any comments to you today

EMILY GUERIN: OK.

EMILY GUERIN: I didn’t know it then, but the DBO lawyer knew exactly who I was. He’d listened to my interview with Tom Maney, the one that Tom had secretly recorded. It had been on a computer in the Burbank office.

DBO LAWYER: Nice meeting you.

EMILY GUERIN: Thanks.

SOUND OF WALKING

EMILY GUERIN: Outside the courtroom, people were huddled together in groups, and their voices echoed off the hard stone floors. As I tried to decide who to talk to, a woman in a pretty silk scarf came up to me.

SOUND OF VOICES TALKING IN CROWDED HALLWAY

LIANHUI ZHOU: Hello.

EMILY GUERIN: Hi.

LIANHUI ZHOU: I'm Chinese investor.

EMILY GUERIN: Oh, okay, I'm Emily. I'm a reporter.

LIANHUI ZHOU: Nice to meet you.

EMILY GUERIN:Yeah, nice to meet you too.

LIANHUI ZHOU: My English — not good. I just can speak some.

EMILY GUERIN: Okay!

LIANHUI ZHOU: So, I want to let my friend interpret for me.

EMILY GUERIN: Okay.

EMILY GUERIN: Lianhui Zhou had driven all the way from Orange County. Her interpreter friend David Dai was also Silver Saddle investor. He wore a suit for the occasion.

DAVID DAI: How are you?

EMILY GUERIN: Good, how are you? I'm Emily.

DAVID DAI: Emily? David.

EMILY GUERIN: Nice to meet you, David. Do you mind if I record?

EMILY GUERIN: And through David, Lianhui started telling me about how a Silver Saddle sales agent had pressured her into buying a share of the landbanking project.

LIANHUI ZHOU: speaking Chinese.

DAVID DAI: Ok, she just said, at a time, they sold those land, they say you know, there are water, there are sewage, there are road, it's built, but now, there are nothing there.

EMILY GUERIN: And you couldn't cancel it.

DAVID DAI: You cannot. Once you cancel...

LIANHUI ZHOU: I call them, but, they said no.

EMILY GUERIN: So you don't think it's a good investment, you don't think you'll ever be able to make money off of it, you just want your money back.

DAVID DAI: We want the money back now.

EMILY GUERIN: By this point, a small group had gathered around us. At least one person was filming me. David turned to speak to them, kind of like a preacher addressing his congregation.

DAVID DAI: Absolutely. Everybody?

CROWD: Yes.

DAVID DAI: Everybody?

CROWD: Yes.

JINDAO HE: speaking Chinese

DAVID DAI: Yeah, that means, we want our money back, that's the Chinese.

EMILY GUERIN: That man yelling out was Jindao He. His eyes were big, and they flashed beneath his bushy eyebrows. His mortified teenage daughter hid behind his shoulder as David translated.

JINDAO HE: speaking Chinese

DAVID DAI: They are the cheaters and they are, you know, they cheated on us. He wants to stop, stop them from cheating again and cheating the different people.

JINDAO HE: Thank you.

EMILY GUERIN: OK thank you for talking.

JINDAO HE: Thank you.

EMILY GUERIN: No, thank you.

LAUGHING

MUSIC

EMILY GUERIN: David told me he’d learned the hard way not to trust America’s laws.

DAVID DAI: You know what, we are immigrants...And we thought in America, we cannot imagine this happen to us.

EMILY GUERIN: How come?

DAVID DAI: Very naive.

EMILY GUERIN: You think so?

DAVID DAI: Yeah. Yeah. And we think everything's law and order, and we have so much trust in those business peoples, and that they give a good presentation.

EMILY GUERIN: Does it make you think differently about America?

DAVID DAI: I would not say different, I will say add more experience. I know America better.

MUSIC

SOUND OF PHONE DIALING

BEN PEREZ: Hello?

EMILY GUERIN: Hey Ben!

BEN PEREZ: Hi Emily.

EMILY GUERIN: Hi can you hear me ok?

BEN PEREZ: Yes.

EMILY GUERIN: Ok, cool. Um, so what did you think when you saw this, um, press release about Silver Saddle being shut down, like how did you feel?

BEN PEREZ: I feel like you know, a sense of relief that it’s finally over.

EMILY GUERIN: It had been over two years since Ben’s trip to Silver Saddle. Two years since he’d signed away his food truck money.

BEN PEREZ: It’s been a long time. Like, I feel super hopeless.

EMILY GUERIN: But do you feel any better now knowing that like you might get it back?

BEN PEREZ: Hopefully yeah. Laughs.

EMILY GUERIN: Yeah, you don't you don't, I'm not convinced.

BEN PEREZ: laughs I don't know.

EMILY GUERIN: Yeah.

BEN PEREZ: Yeah.



MUSIC

EMILY GUERIN: Ben was not confident that the lawsuit would help him. Not nearly as confident as David and his group. And, reading through court documents, I could see why.

Silver Saddle’s finances were a mess. Years had passed without any basic accounting at all. Their books were so disorganized, the DBO’s fraud examiner determined it must be deliberate -- Silver Saddle must have been transferring money between multiple accounts to make it difficult to trace. Most of the money, the fraud examiner found, was gone. A lot of it was used to pay sales agents. Marian Ducreux had been making $300,000 a year, according to the DBO.

All that was left was the ranch itself, and all the things that had been left behind, including: two American flags. Two projector screens. Four booster seats. Eight broken paddle boats. Fifteen fake wine bottles. One cowboy statue. One jackalope. And one hot dog roaster.

The DBO wants Silver Saddle to give all the investors their money back. But how? Even if they sold the ranch, and sold the vacant land that remained, it wouldn’t generate enough money to pay everyone back in full. Because the land was, “near-worthless real estate”, as the DBO put it.

They said people like Ben Perez had paid around 100 times more than what it was really worth. A hundred times!

But in the courtroom in San Diego, Tom Maney’s lawyer proposed a solution: the people who’d bought into Silver Saddle could take over the ranch from Tom Maney and run it themselves.

David and Lianhui did not like that idea one bit.

LIANHUI ZHOU: speaking Chinese

DAVID DAI: She just, you know, said, what they want is, do not do anything just, you know, take the land, take the ranch, then, you know... We're done. This is not right way. This is not the correct legal action at all.

EMILY GUERIN: They didn’t want anything to do with Silver Saddle. They just wanted as much money back as possible. And given the charges against Silver Saddle, and the dozens of investors I’d talked to, I assumed most people felt this way. But then I met Antonio Garcia.

MUSIC

EMILY GUERIN: Antonio was standing at the opposite end of the courthouse hallway from David and Lianhui’s group. He was a large man in a baggy suit with a bluetooth in his ear. And he was standing very close to Tom Maney’s lawyer, surrounded by a group of people who were listening intently.

ANTONIO GARCIA: And in the 2,000 people that are members or investors, there are people there, there are doctors, there are accountants, that can run this place, to make it good.

MUSIC

EMILY GUERIN: They were discussing the proposal Tom Maney’s lawyer had made earlier in the courtroom. Antonio said that he had a large group of people who all wanted to take over the ranch from Tom Maney.

ANTONIO GARCIA: But if we have control, we would make the money back that we invested.

EMILY GUERIN: Antonio said all he needed was to convince the court that everyone who had bought into Silver Saddle was on the same page. So Tom Maney’s lawyer had an idea.

MARK HIRAIDE: Maybe a survey might be helpful.

ANTONIO GARCIA: Yeah, we'll do a survey, and we'll send it to everybody.

MARK HIRAIDE: OK.

EMILY GUERIN: I realized I’d talked to Antonio before on the phone. I’d asked Debbie Nicastro, the woman we’d interviewed with Tom Maney, for the names of some people who were happy with Silver Saddle. It made me wonder if maybe Antonio and Tom Maney were working together. That, and the way Antonio was talking to Tom’s lawyer. Standing so close. Speaking so calmly.

EMILY GUERIN: Are you driving back somewhere right now?

ANTONIO GARCIA: Um...we’re going to have a meeting someplace.

EMILY GUERIN: Ok. I mean, can I come?

ANTONIO GARCIA: Uh, where are we going after this?

EMILY GUERIN: I introduced myself, and Antonio told me if I wanted to keep talking, I could meet him at a restaurant a few miles away from the court house.

SOUND OF CAR DOOR CLOSING

EMILY GUERIN: I’m going into Erlinda’s Filipino Cuisine and Ice Cream parlor.

EMILY GUERIN: Antonio was sitting around a table with a few people I recognized from the hallway. They’d already eaten, and the table was littered with styrofoam plates and dirty napkins. An older man offered to buy me something to eat.

OLDER MAN: You might like. It’s sweet.

EMILY GUERIN: What is it called?

OLDER MAN: It’s called Halo Halo?

EMILY GUERIN: Oh! I’ve always wanted to try that actually.

WOMAN: What ice cream do you want?

EMILY GUERIN: Is there like green tea? Or Thai tea? They have Thai tea. I’ll have green tea ice cream.

OLDER MAN: Green tea, I think they have.

EMILY GUERIN: The older man plopped a huge plastic cup of ice cream, coconut and sweet red beans in front of me. I tried, semi-successfully, to eat it with one hand while I held the microphone with the other. I mentioned I’d been talking to David at the courthouse.

ANTONIO GARCIA: That's the guy who doesn't like us, he is contrary to what we're doing. He will tell you that we were not honest and all that stuff, blah, blah, blah, whatever.

EMILY GUERIN: Antonio told me that Silver Saddle, and all the land around it, still had a lot of potential. It was going to be worth something someday. He had what I think Kathryn Efford would call, the vision.

ANTONIO GARCIA: It's a good location for many of the high, high tech industries. There was at one time, talk about Virgin Airlines using it as a place to develop their space program. That in itself alone brings a lot of value.

EMILY GUERIN: He said there could be a hemp farm there. Or a field of solar panels. Or a water park. The land already had water and power.

ANTONIO GARCIA: But remember, Las Vegas was a desert before it became Las Vegas.

EMILY GUERIN: On one hand, you had the people who were mad at Tom Maney. The ones who blamed him. The ones who want nothing to do with the land and they just want their money back. And then there were the people who see a future for Silver Saddle and for California City. People like Antonio, who explained it all to me absentmindedly as he picked at the food on his plate, chewing as he spoke.

ANTONIO GARCIA: We acknowledge the fact there is some mismanagement of the money.

EMILY GUERIN: So are you, do you blame him? Are you mad at him or angry in any way?

ANTONIO GARCIA: No. Uh uh. They're mad at him because of what?

EMILY GUERIN: Uh, I think they feel like he and the sales people lied about the value of the land and and pressured them and, you know, told them they would make a lot of money overnight and then they didn't.

ANTONIO GARCIA: They were not told that they were going to make money overnight, they were told that they will make money as soon as it is developed. The promise to make money is later on in the future.

EMILY GUERIN: In other words, Silver Saddle was a long-term investment, just like Tom Maney had told me. Long. Term. It was so familiar.

EMILY GUERIN: And are you... affiliated with Tom Maney or Marian or Silver Saddle in any way?

ANTONIO GARCIA: No. No.

CARLOS NOVELO: Totally separated.

EMILY GUERIN: Okay.

ANTONIO GARCIA: Anything that you heard otherwise is, is not true.

EMILY GUERIN: After an hour and a half, my halo halo was a melted gloppy syrup. Antonio was done picking at his food, and the other people with him seemed restless about their long drives home. I shook their hands and I ordered a styrofoam container of mung bean stew to go. I took it outside and I ate it on the curb as the sun set over the empty parking lot.

MUSIC

EMILY GUERIN: In the weeks after I met Antonio, I kept asking myself the same question I had about Nat Mendelsohn and Tom Maney: what are Antonio’s intentions? I decided to ask one more person: Darryl Horowitt. Antonio had hired him to represent all the people who bought into Silver Saddle, but for reasons that are too complicated to explain, he’s no longer representing them.

DARRYL HOROWITT: I can't describe any attorney-client communications, but I can tell you that when I worked with them, there was no indication they were working with Mr. Maney.

EMILY GUERIN: Except, the Department of Business Oversight does have an indication that Antonio is working with Mr. Maney. I found it in some court documents. It was a quote from an email that Marian Ducreux had written to one of her clients. She was suggesting that the client elect Antonio as the official representative of the people who had bought into Silver Saddle.

“Please vote for the following people,” she’d written, “they are all members of our team.”

I still don’t know if Antonio was working with Silver Saddle. But either way, Darryl seemed to be trying to distance himself from him.

DARRYL HOROWITT: Look, hope springs eternal for a lot of these people. They have this romantic notion that it's going to be something. If just given the chance, it will, it will happen. And, again, it's never going to. You and I rationally can look at it and realize it probably isn't ever going to happen. Why do people believe things that they know are believed to be false? It's because we have a default to truth. We want to believe people are telling us the truth.

MUSIC

KATHRYN EFFORD: Real estate is the basis of all wealth. Period. Worldwide, basis of all wealth. Kings, queens and wars are fought over her. If she’s dirt, someone’s gonna die for that piece of dirt. That’s just the way it is.

KATHRYN’S VOICE FADES INTO MUSIC

EMILY GUERIN: All the DBO’s findings and evidence show that what Silver Saddle sold, at the price they sold it for, is a bad investment. “By any measure, such pricing was astronomical and not supported by any market metric,” reads the receiver’s report.

So why do people like Antonio still believe?

I think it’s because what Silver Saddle’s salespeople were selling -- what sales people in California City have sold for decades in some form or another -- is a particularly beguiling dream.

A dream that, through blood and sweat and a little luck, we can make the desert into our garden.

California owes its very existence to this dream. Our dams. Our aqueducts. Our fields of almonds. Our herds of cattle. Our freeways. Our cities. We made the desert bloom. We turned dust into gold. So why not in California City? Why not one in more place?

MUSIC SWELLS AND FADES

EMILY GUERIN: By mid-August, Ben Perez had been out of work for five months. The pandemic had forced Google to close its campus in early March, and so with no Googlers to cook for, Ben got sent home. He’s on unemployment now. His mom, his three brothers, and his sister still live together. Ben still sleeps on the couch.

The case against Silver Saddle was on hold for months because of coronavirus. It’s nowhere near finished.

But Regulatory Resolutions has been busy. They’re selling off Silver Saddle’s assets, which is something the court has allowed them to do to try to generate as much money as possible for people like David, Lianhui and Ben.

They sold one horse for $2500. They sold 12 sheep and 10 goats for $500. Now, they’re trying to sell the Ranch itself, and the thousand acres of empty land that surrounds it, for $2.5 million. Which is...a fraction of what Silver Saddle claimed it was worth.

If the sale goes through, Ben Perez will get less than $1,300 back. He spent more than $31,000.

Antonio Garcia, of course, hates this idea.

He thinks the Ranch is worth way more than $2.5 million.

He thinks Regulatory Resolutions just doesn't understand its potential.

He thinks they don’t have the vision.

And he’s still trying to convince the judge that he and all the other people who bought into Silver Saddle should run the ranch themselves.

That’s how they’ll make all their money back.

SOUND OF WIND BLOWING, EMILY TESTING HER MICROPHONE, FOOTSTEPS ON GRAVEL

EMILY GUERIN: I decided to come back to California City one more time. I guess I just wanted to see it in the age of coronavirus. See if anything has changed. Honestly it looks just as quiet as it normally does.

I drove out here to Silver Saddle and was just shocked again by how far away it is. I mean, California City is already so remote and Silver Saddle is in the most remote part of California City.

That plywood sign with the green spray paint sign is gone. Instead there's an actual "keep out no trespassing" sign, but I know the road to Galileo Hill is still public, so, I drove up here and put the e-break on, and now I'm just standing out here.

It's windy today and the birds are drafting. Ravens or maybe they're crows. There's a mylar balloon blowing around in a creosote bush. And there's a billboard for the Galileo Project, the landbanking project that Ben Perez and thousands of other people bought into. The billboard blew over at some point. It's just sitting there on the ground, faded in the sun.

It's been a long time. I feel like it's been a really first time since I first came to this place.

I think if I were in charge of selling land here, I’d focus on the silence. I mean it is a stunning thing to experience. Where else within 100 miles of Los Angeles, can you hear absolutely nothing man-made, just the wind?

California City is unlike anywhere else I have ever been. And I think it’s because Nat Mendelsohn’s dream failed to come true. If he hadn’t dreamed so big, and come up so short, California City would be... I don't know, unmemorable. I mean It would just be any other sunbelt suburb. It wouldn’t be a place where you can just belt out Karaoke, and then wander home, still singing, on curving, moonlit roads. It wouldn’t be a place where you can spend a cool spring morning on top of a man made waterfall, hearing thrushes sing. It wouldn’t be a place where you can trace the tracks of long-gone wagons across the windswept ground. And it wouldn’t be a place where you can drive to the top of Galileo Hill, and stare out at the beautiful nothingness.

The nothingness is what makes the anything possible.

FOOTSTEPS WALKING, MUSIC SWELLING

CAR DOOR OPENING, CAR BEEPING, DOOR CLOSING

MAN’S VOICE: Good?

EMILY GUERIN: I'm good.

WIND BLOWING, MUSIC

More Episodes
From This Episode
A familiar sales pitchCarlos Novelo and Antonio Garcia, who say they bought into Silver Saddle, claim the place has potential. They want other investors like Ben Perez to all take over the ranch together and run it themselves. In this PowerPoint, which they present at meetings of Silver Saddle investors and owners around California and Nevada, they distance themselves from the company's owner, Tom Maney. Their discussion of the ranch’s potential sounds strikingly similar to the talking points used by Silver Saddle’s salespeople.
Chava Sanchez/KPCCSilver Saddle: no trespassing!After the California Department of Business Oversight sued Silver Saddle, the court appointed a receiver who took control of the company and shut down the ranch and its headquarters in Burbank, CA.
San Diego County Superior CourtThe DBO makes its caseIn this civil complaint, the California Department of Business Oversight alleges that Silver Saddle, saleswoman Marian Ducreux, owner Tom Maney and other defendants committed fraud and sold unlicensed securities.
San Diego County Superior CourtSilver Saddle “drastically overpriced” the Galileo ProjectThe California Department of Business Oversight alleges Silver Saddle “deeply misled” investors about the value of its landbanking project. They paid up to $31,990 for their investment, but the shares were worth approximately $337.59, according to an investigator with the state’s Department of Real Estate.
San Diego County Superior CourtSilver Saddle targets Asian investorsThe DBO submitted numerous company records as part of its lawsuit against Silver Saddle, including a 2005 memorandum written for owner Tom Maney that explained why Silver Saddle targets Asians.
San Diego County Superior Court“Make it difficult to trace how investor money was spent”When DBO experts analyzed Silver Saddle’s finances, they found that many bank accounts had low balances and the accounting records were difficult to interpret. Lisa Medina, a senior corporation examiner at the DBO, believes this was an attempt to make it difficult to trace how money was spent.
Emily GuerinYou made it to Silver Saddle!This sign is taped to the door of Silver Saddle’s office in Burbank, California.
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