Kern County Seeks Fees to Combat Land Fraud

Inspired by what law enforcement officials say was a decades-long scheme by developer Marshall Redman, Kern County officials are pushing a plan to levy new fees to pay for an early warning system against land fraud.

If successful, Kern would become only the fourth county in California--joining Los Angeles, Santa Clara and San Diego counties--to take advantage of a new law authorizing local prosecutors to charge an additional $2 in real estate recording fees to pay for what often are time-consuming and expensive investigations.

“Lord knows we can use the help,” said Kern County Supervisor Steve Perez, whose panel must first approve the plan. “Chasing down these people takes money.”

The law grew out of concern about the impact of land and home equity fraud in California. A study by the San Francisco-based Consumers Union estimated that in 1993 and 1994 in Los Angeles County alone, residents lost more than $183 million in such scams.

“Statewide, the annual loss reaches into the hundreds of millions--maybe more,” said Norma Paz Garcia, the attorney who wrote the report.

The legislation, sponsored by state Sen. Teresa Hughes (D-Inglewood), offers counties new autonomy to actively pursue real estate fraud rather than rely on regulatory agencies such as the Department of Real Estate, which has been criticized by consumer advocates as ineffective in policing against land sale crimes.

“We’re giving local prosecutors more firepower to go after real estate fraud,” Hughes said of the law, which took effect in January. “This is not violent crime, but it’s still terrible because most people’s life savings go into the acquisition of a home or property.”

In recent months, Kern officials have cited budget frustrations for their inability to move more effectively against Redman. The 67-year-old developer faces trial on theft and fraud charges in what authorities say was a massive scheme involving the sale of 2,500 parcels of raw High Desert land to working-class Latinos, as many as 250 of whom now live scattered across the Antelope Valley without water or other utilities. Redman has pleaded not guilty.

“We’ve got a lot of land here in Kern County,” said Assistant Dist. Atty. C.M. “Bud” Starr II. “Most of it’s raw land, which brings about a different kind of fraud than you have in big cities. Raw land fraud is a rural county kind of thing. It takes a certain expertise to combat it.”

The law allows supervisors to create the fund by placing a $2 surcharge on the recording of some financing documents associated with a property sale, including trust deeds, notices of default and notices of conveyance.

In Los Angeles County, the law this year enabled prosecutors to start a new real estate fraud unit--complete with three prosecutors and five investigators.

Deputy Dist. Atty. Don Tamura, who heads the new unit, says the county expects to bring in up to $2 million annually from the fund--money that will be split 60%-40% between prosecutors and law enforcement. Tamura hopes to eventually hire as many as 10 district attorneys and 10 investigators to pursue cases involving lender fraud, home equity and land fraud.