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Fracturing of American Dream

There are risks involved in every investment. But when fraud allegedly is committed against an unwitting group of investors, one expects regulators, government agencies and elected officials to pay keen attention. And when the alleged fraud involves some 2,500 victims and millions of dollars in life savings, scrutiny is hardly enough. Any action that falls short of the following is unacceptable: a timely halt to the alleged swindle, prompt investigations and a reasonable means of recovering lost investment if fraud is proven.

Somehow, in a purported Southern California land swindle that began in 1978, none of that seems to have occurred until now.

The Los Angeles district attorney’s office now alleges in seven felony charges that millionaire developer Marshall Redman, through several firms he controlled, sold land to Latino families from blue-collar neighborhoods. For the investors, the proposition seemed like the American Dream: affordable land for future homes. Redman is accused of having sold 2,500 undeveloped properties in Kern, Los Angeles and San Bernardino counties at prices ranging from $19,900 to $39,900. Few buyers got what they paid for, according to a six-month Times review.

Authorities allege that many of the unsophisticated buyers received no title insurance and no title search and were sold land that was zoned exclusively for business or industry. Prosecutors claim that Redman sold land he didn’t own (in one case in the middle of a freeway) and sold the same parcels to several investors.

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Redman’s attorney claims that his client was the victim of bad legal advice.

Prosecutors allege that the investors were promised water and sewer hookups, telephone service and electricity. In many instances, none of those services were provided. Now, about 250 families live on those High Desert properties, enduring extremes of temperatures in impoverished conditions.

What’s equally bad, however, is the footdragging. Despite more than 100 inquiries and complaints to six government agencies, authorities took 13 years to file a lawsuit to bring a halt to the alleged land scam. Zoning officials in Los Angeles and Kern counties simply cited Redman for building and subdivision violations. State regulators revoked Redman’s real estate license in 1973 but did little more. Kern County officials were prepared to prosecute in 1981, and didn’t. The Los Angeles County Consumer Affairs Department took three years to turn the case over to prosecutors.

But Kern and Los Angeles counties were quick to cite Redman’s buyers for building homes without permits. L.A. County Supervisor Mike Antonovich, like many others, is now voicing his outrage over the alleged swindle. He says he doesn’t recall being asked to investigate the living conditions of the investors. But Antonovich does recall helping create a task force that cited Redman’s investors and forced some off the land they thought they owned.

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Now there are calls for a warning system against land frauds, plans to prevent such alleged scams, offers of legal aid, and more. Too bad it’s all about a decade late in coming.


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