Santa Monica Files Suit to Stop ‘Consumer Scam’

The official-looking notices struck fear in the hearts of many Westside homeowners.

For a moment, John and Rose Morgan thought their Santa Monica home, a lifetime’s investment, was being threatened. In Culver City, Abigail Renteria thought she could be fined thousands of dollars if she did not obey the notice.

The computerized mailer, allegedly sent to nearly 5,000 Westside residents, told homeowners that failure to file homestead exemptions could cost them up to $60,000. It offered to begin processing exemptions if the recipient sent in fees that ranged from $15 to $60, according to recipients and authorities.

Santa Monica city attorneys now say the notices were part of a “despicable consumer scam” that “preys upon homeowners’ fears” that they can lose their homes if they do not file homestead declarations.

The wording of the notices and the name used, L. A. County Recording Service, made recipients think the notices came from a government agency, the city contended in a civil suit filed in Superior Court last week.

A preliminary injunction put a halt to the operation.

Homestead exemptions protect part of a homeowner’s investment in his house. However, city attorneys say, that protection exists whether or not the homeowner files a homestead declaration with the county.

By Tuesday, a week after the first mailers went out on the Westside, more than 400 people had sent in money in response, City Atty. Robert Myers said. All envelopes have been impounded by Santa Monica police and will be returned to their owners.

“The notices are very official looking,” police Sgt. Barney Melekian said. “Each individual amount of money (solicited) was so low that you’re inclined to pay. That’s what they were gambling on.”

No Criminal Charges

Myers said he was not planning to file criminal charges against Robert W. Winfield, who set up the L. A. County Recording Service. He said Winfield was cooperating with the city and agreed to both the injunction and the impounding of the responses that were mailed to his rented postal box.

Winfield’s attorney, Elliot Stanford, said his client did not intend to do anything fraudulent. He said Winfield was only offering a homestead filing service and was unaware of how the offer should have been worded.

“If he were really trying to do something he knew was wrong, he would have opened a P. O. box miles away, under a fictitious name,” Stanford said. Instead, he rented a mail box near his home and filed the proper “fictitious business” papers, Stanford said.

In an effort to prevent Californians from being misled about who is offering homestead services, state legislation going into effect on Jan. 1 prohibits the use of the words county and state in offering a homestead filing service.

The city this week broadened its investigation to include two other companies that were sending out similar but “much more detailed” notices involving homesteads, Myers said. He cautioned it was still not clear whether the other notices violated any laws.

Calls From Consumers

The city attorney’s office was alerted to Winfield’s operation by calls from confused consumers.

John Haremski, who owns the private post-box rental service that Winfield used, said that in just one day about 30 homeowners, most elderly or living on low incomes, came into the office asking about the notices they had received.

“All that came in were visibly distraught, in tears, terrified that they would lose their homes,” Haremski said in papers filed with the city’s suit. “One woman who came in . . . broke down in tears when I assured her that she would not in fact lose her home.”

When John and Rose Morgan received the notice, they said they immediately “knew something was funny” and sought help from a neighbor who happens to work in the city attorney’s office.

But, Rose Morgan said, she and her husband were at first alarmed at what they thought was the prospect of losing their home of 23 years.

‘That’s All We Have’

“We were upset, all right,” she said. “When it’s your home, it frightens you. We put everything, our lives, in our little house. That’s all we have.”

Neither Abigail Renteria nor her husband, Flumencio, speaks English, heightening the confusion they experienced at receiving the notice.

“I told him (her husband) to go pay, because we didn’t want problems and since it seemed to be a letter from the government,” Abigail Renteria said.

But the Renteria couple was told by a city official that the notices were not official and did not have to be paid.

Santa Monica resident Fred Schmid says he rushed to pay the $20 fee, thinking the notice had come from a government agency.

“If I’d had half my smarts that day, I’d had realized it was something different,” said Schmid, 66. “But it looked so darned official that I fell for it.”