Scam artists charged with stealing homes from troubled homeowners

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LOS ANGELES (AP) - The head of a San Diego company and three others were arrested in a scheme that duped hundreds of homeowners facing foreclosure out of the deeds to their houses and thousands of dollars in cash, authorities said Thursday.

Troubled homeowners - most of them Spanish-speaking immigrants - in San Diego, Riverside, San Bernardino and Los Angeles counties were lured to foreclosure rescue seminars and conned into signing over title to their homes with the purpose of establishing their property as a federal land grant.

The scam claimed to save homeowners' properties, but had no legal basis, state Attorney General Jerry Brown said Thursday.

"There hasn't been a legitimate use of the land grant since the conclusion of the Mexican-American war," Brown said in a statement. "If some fast talking scam artist offers a quick escape from foreclosure using archaic documents, be extremely suspicious."

Late Wednesday, FBI and investigators from the San Diego County district attorney's office arrested William Hutchings, 62, his wife, Xiaoke Li, 43, both of San Diego, at a real estate seminar; Edgar Martinez, 30, and Diego Gil, 38. It was not immediately clear where Li and Martinez lived.

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The defendants were being held in jail and couldn't be reached for comment. It was not immediately clear if they had hired lawyers. They were scheduled to appear Friday in San Diego County Superior Court.

An arrest warrant was also issued for Hutchings' former wife, Shawna Landis, 29, of Sorrento Valley.

All face multiple counts of conspiracy, grand theft and deceitful practices as foreclosure consultants, authorities said.

Prosecutors have also taken steps to freeze the defendants' assets and bank accounts, while Brown's office on Thursday sought an injunction and penalties against the company through which the scam was operated.

"These transactions were illegal and left the victims even worse off than they were before," said San Diego County District Attorney Bonnie Dumanis.

Authorities identified Hutchings as the "ringleader" of the scheme.

According to the civil complaint filed by Brown, Hutchings and the other defendants operated through a series of limited liability corporations: Federal Land Grant Co., Land Grant Services, and KBS Resources.

Nearly 350 properties were transferred to Federal Land Grant or one of its affiliates and at least 60 homeowners lost their homes to foreclosures.

Homeowners who attended the foreclosure rescue seminars were told that they could keep lenders from taking over their properties if they signed over the grant deeds on their homes to one of the corporations, which then would record a land grant on the property, according to court documents.

Some homeowners who fell for the scam paid up to $10,000 to place their home in a land grant. Others paid at least $500 up front and then made monthly rent payments to continue living in the property, authorities said.

The land-grant scheme failed to protect homeowners, who often were evicted once they completed the foreclosure process, authorities said.

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

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