CALIFORNIA CITY
Episode 7 Transcript: Open Secret
EPISODE 7 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 am in business, I don't wanna say anything about Silver Saddle. Ok? No don’t, don’t do that.
TOM MANEY: Well, first of all, we've never misrepresented — we just don't do it. You know, I mean, I, that's, that's the way I live my life.
EMILY GUERIN: My takeaway is that either they really don't know what the sales people are saying, or they're totally bullshitting us.
KEN DONNEY: You hear me Tom? I'm talking to you right now, Tom Maney. Shame on you.
EMILY GUERIN: Do you feel bad that you brought people there?
BEN PEREZ: Very bad. I feel very bad.
COUNTRY MUSIC SWELLS, SOUND OF BAR
EMILY GUERIN: If you don’t count the American Legion and the VFW, California City is a one-bar town. The bar is inside a Chinese restaurant called the Green Tea Garden.
They have a wood-paneled jukebox that plays mostly country, although James and I picked Jewel and TLC off playlists written in Sharpie. We shot pool in the neon glow of red Budweiser signs. We drank what passed for craft beer. We noticed the 20-year old cigarette burns on the red carpet.
Part of the reason we hung out there so much was that, on our first day in town, we’d gotten a tip that the woman who owned the Green Tea Garden knew a lot about Silver Saddle.
SOUND OF JAMES INTRODUCING HIMSELF TO JOHN DAVIDSON
It was James who’d gotten the tip. He was hanging out in the park on election day in 2018, and he started talking to this guy named John Davidson, who’d just got done voting. His big issue was the gas tax: he didn’t want to pay more to drive his truck. He was in his 50s, ex-Air Force, his eyes hidden behind sunglasses and his hair hidden beneath a trucker hat. He had a handlebar moustache. No hiding that.
JAMES KIM: And, yeah, how would you describe California City?
JOHN DAVIDSON: It’s a small town, small community, out in the middle of nowhere. laughs. Not much to do out here, not unless you’re riding a dirt bike or playing sports.
EMILY GUERIN: John thought California City was going to shit. Which, we noticed, was a common opinion among the older white people in town.
JAMES KIM: And, what has changed since you’ve lived here?
JAMES DAVIDSON: They allowed Section 8 in. Ruined the city.
JAMES KIM: Can you elaborate?
JOHN DAVIDSON: Back in ‘95, when I came out here, the crime was very low. But now that they allowed Section 8 in… it’s caused a lot of problems. It is a small community and you don’t have that much law enforcement.
JAMES KIM: And then the other thing we heard a lot about is this place called Silver Saddle Ranch. Do you know anything about it?
JOHN DAVIDSON: Yeah, I think it’s a corrupted place. laughs.
JAMES KIM: Why do you say that?
JOHN DAVIDSON: It’s a real estate scheme. You know. Selling properties, promising that there’s gonna be improvements, the city is growing and all that, and nothing ever happens so people default on their taxes on the property, and guess who re-purchases it when it goes into foreclosure? Who do you think purchases it?
JAMES KIM: They do.
JOHN DAVIDSON: There you go.
JAMES KIM: Yeah.
EMILY GUERIN: At the time, James and I did not understand what John was talking about. But we do now.
When James asked him if he’d be willing to talk any further, he put his key in the ignition.
SOUND OF CAR STARTING
And he muttered, “Naw, I’m good. It’s a small town they might take me out.”
JAMES KIM: One thing though, I have to say, every time, like, a conversation heads in that direction, people get afraid to talk. Why is that?
JOHN DAVIDSON: It’s just a small town, people know everybody.
EMILY GUERIN: And then came the tip.
JOHN DAVIDSON: — Green Tea garden. Talk to them.
JAMES KIM: Green Tea Garden?
JOHN DAVIDSON: That lady has been there for a long time.
JAMES KIM: Interesting, okay.
EMILY GUERIN: We went that same night. We went late and the place was nearly empty. We sat down at a booth and we ordered cream cheese wontons. A thin woman in a boxy sweatshirt and loose jeans came over to deliver them. Cathy Yip, she owned the place. We started chatting, and after a minute or so, I did what I always do.
EMILY GUERIN: So this is our gear, this is my microphone. It likes to be close to people, cause then it, you know, it’s just how it works...
CATHY YIP: You gonna ask me a question or some shit?
EMILY GUERIN: Yeah, James’ll ask you I’ll just hold it.
JAMES KIM: Yeah, I guess I could ask you, would you…
EMILY GUERIN: Will you tell us your name first?
JAMES KIM: Wait, hold on, do you feel comfortable doing this?
EMILY GUERIN: This is the only tape I have of Cathy. Because once I pulled out my mic, and we started asking her about Silver Saddle, she started backing away from the table and waving her hands in front of her.
CATHY YIP: Wait a minute, I am in business, I don't wanna say anything about Silver Saddle. Ok? No, don’t, don’t do that.
EMILY GUERIN: It was going to be a lot harder than we thought to get people to talk about Silver Saddle. And I think that’s part of the reason they’ve managed to stay in business for so long. They’re kind of an open secret.
I’m Emily Guerin, and welcome to California City, episode six.
MUSIC SWELLS, THEN FADES
BREAK
MUSIC AND SOUND OF BAR
EMILY GUERIN: Cathy Yip didn’t want to talk to us about Silver Saddle. But she kept feeding us names of people who might. And one Thursday night, at the bar, Cathy cornered a woman who was playing pool and instructed her to tell us everything she knew.
SOUND OF INTERVIEW IN BACKGROUND
So the three of us went out back and we stood in the wet alley beneath the streetlight. It was cold, and she was shivering in a thin cotton sweatshirt. She was pretty drunk, and I felt kind of slimy to be interviewing her at all. This isn’t what she sounds like, by the way. She asked us to distort her voice.
EMILY GUERIN: So what should we know about Silver Saddle?
WOMAN: I've been here for a long time and I know they're pretty scandalous. As far as, they try to sell people land which they cannot re-sell, because it's out in the f… the middle of … nowhere. I really want to cuss, I’m sorry.
EMILY GUERIN: That’s okay, you can say whatever you want.
WOMAN: No, no I’m not gonna cuss.
EMILY GUERIN: And I could tell this woman did want to talk to us. But it also felt like she was holding something back.
WOMAN: Because it is a small-knit community. And so everybody knows everybody. So, you never know, if you talk to somebody, if you're gonna be beat up. Or ostracized. Or whatever… cus this is such a small-knit community.
And then she backed away from the microphone and silently mouthed, “I’m done.”
This kept happening.
MUSIC SWELLS
It happened at a diner at the California City airport called Foxy’s Landing. A waitress there once told me she served salespeople coffee as they pushed paperwork on potential clients. She thought it was weird, but it was none of her business.
SOUND OF DIRT CRUNCHING, STEPS, HIKING
It happened on top of a butte, on a hike with a woman who knows the name of, like, every single Mojave desert plant. Although she agreed to an interview, she later asked me not to use her name. She reminded me: she had to live in California City. She had a daughter. She was afraid of the repercussions of being seen as someone who would talk to a reporter about Silver Saddle.
It was starting to feel like no one was willing to talk about Silver Saddle, unless they were drunk or anonymous or both.
Until one night at the Green Tea Garden. When Cathy gave us another name: Theresa Grimshaw.
Theresa’s a real estate agent who specialized in selling land in California City. Her Zillow page says, “I believe in honesty and fair dealing, not only with my clients, but with everyone connected in a real estate transaction. Theresa says she gets lots of calls from unhappy people who bought land at Silver Saddle.
THERESA GRIMSHAW: I probably get a call a day.
EMILY GUERIN: Are you serious?
THERESA GRIMSHAW: Yeah.
EMILY GUERIN: Wow. That's way more than I thought you were gonna say.
EMILY GUERIN: She gently tells them that yes, although she is a real estate agent, she cannot sell their land.
EMILY GUERIN: So you're saying there's almost no resale market for the lots that Silver Saddle is selling?
THERESA GRIMSHAW: Yes, yes. That's what I'm saying.
EMILY GUERIN: Do you feel like the buyers knew that going into it, based on your conversations with them?
THERESA GRIMSHAW: No... But most of them, believe it or not, they appreciate my honesty. I've had very few if anybody get angry at me for telling them my opinion.
EMILY GUERIN: We were talking in her real estate office, an echoey building on California City Boulevard. The wind kept rattling the windows. Theresa’s long grey hair was wrapped around her shoulders like a shawl. She looked small and cold in her big office chair.
THERESA GRIMSHAW: laughs. I wanted to put a sign out there telling people, do your due diligence, beware. Caveat emptor. You know, buyer beware.
EMILY GUERIN: What would the sign look like?
THERESA GRIMSHAW: laughs. It would have been at least four by eight. It would have been, you know, like, bright yellow with big letters on it.
MUSIC FADES
EMILY GUERIN: I wonder what would’ve happened if Theresa’s sign had been up when Ben Perez was driving out to Silver Saddle. A big yellow and black sign, 4 feet by 8 feet. Like you might see at a construction site.
A sign warning you not to buy land out here, from a woman who sells land out here.
Maybe Ben would’ve turned to his buddy Clifford and asked, what the hell is that?
Maybe Clifford would’ve ignored him, just brushed him off.
But we’ll never know, because Theresa never built that sign.
THERESA GRIMSHAW: You don't want to say something and end up not being able to find your body somewhere. There's a lot of land out there. Because there's been a reputation up here in the high desert, too, of places for people to just dump bodies.
EMILY GUERIN: I said this once, but I’m gonna say it again: I talked to A LOT of people in California City. And no one ever accused anyone affiliated with Silver Saddle of a violent crime. Ever.
But I understand why Theresa feels scared. California City does feel kind of lawless. A police sergeant here told me they do find bodies out in the desert occasionally, along with trash and stolen cars and other things people want to disappear.
Dateline did a story last year about the town’s eight unsolved murders. And on the outskirts of town, there’s three billboards that a mother put up admonishing the police to solve her daughter’s murder.
EMILY GUERIN: Do you feel like a lot of people in town know what Silver Saddle is doing and how they operate?
THERESA GRIMSHAW: Oh, yes. Everybody knows. Yes. But the thing is is, what they're doing isn't, as far as we know, is not illegal.
EMILY GUERIN: The police sergeant I’d talked to said he had no idea about Silver Saddle. “I don’t get involved in real estate,” he told me.
But there was one California City cop who had been suspicious of them.
A guy named Steve Colerick.
Steve grew up in Arizona, but he visited California City a ton as a kid, because his grandparents owned the concrete plant in town. He told me it was idyllic back in the 60s and 70s, before Great Western Cities declared bankruptcy and the city began to fall apart.
In the early 80s, Steve became a cop in California City. And it didn’t take long before he started hearing rumors about Silver Saddle from one of the older guys on the police force.
STEVE COLERICK: He came right out and said that Silver Saddle was a, was a scam. And I’ll admit, I, up to that point, I didn’t pay attention to that stuff. I didn’t care. It didn’t interest me. If they weren’t selling drugs or gang banging, I didn’t care.
EMILY GUERIN: For years, Steve didn’t think about Silver Saddle.
But that changed around the time his infant grandson died, two days after Easter, in 2002.
The historical society offered to build a little memorial to the baby boy along this old wagon trail
that once ran through town. It’s mostly been paved over, but Steve had heard that way out in the desert, the ruts were still there, worn into the dirt by heavy wagon wheels more than 100 years ago.
For some reason, Steve became obsessed with finding these ruts. He told me, it just seemed like something I needed to do.
STEVE COLERICK: I got on my dirt bike and I started riding. I’m going, “I gotta find this, this trail. Where’s the ruts at? I couldn’t find the ruts.”
EMILY GUERIN: Steve criss-crossed the empty plain on his Honda, searching for a thing that almost no one else cared to find.
And over time, his obsession morphed into something larger: the history of California City.
Steve began collecting old ads, articles and documents about Nat Mendelsohn and the town’s early pioneers.
He had an entire white bankers box full of the stuff, and he brought it to my room at the Best Western on one of my visits, and began rifling through it.
SOUNDS OF RIFLING, STEVE TALKING UNDER HIS BREATH
Steve is a meaty guy with small eyes, big ears and divots on the sides of his head from years of wearing his sunglasses too tight. He has a retired cop buzz cut and a gray moustache that you can almost hear as he talks.
STEVE COLERICK: This is for you.
EMILY GUERIN: What is this?
STEVE COLERICK: I wrote that.
EMILY GUERIN: Steve pulled out a piece of yellow lined notebook paper.
EMILY GUERIN: Is this your little timeline of who owned what and when?
STEVE COLERICK: Yeah, this was my first sketch that I did. Um.
EMILY GUERIN: It was a hand-written timeline of all the major events in the history of California City.
In the 1950s, when Nat Mendeloshn started selling land.
In the 70s, when his company got sold to the Hunt Brothers.
EMILY GUERIN: And it goes to Great Western Cities?
STEVE COLERICK: Right.
EMILY GUERIN: And then you have this whole period of class action lawsuits and Ralph Nader?
EMILY GUERIN: Also in the 70s, you have the lawsuits and the investigations.
And then in the 80s, Silver Saddle’s creation.
When Steve was making this timeline, he wasn’t totally sure if Silver Saddle had anything to do with Great Western Cities or not. They seemed kind of similar, but he just didn’t know.
So he started asking around. Quietly. He wasn’t building a case, but he said it kind of felt that way.
STEVE COLERICK: Had to be careful on what questions I asked. Cause I didn’t, sometimes I didn’t know who was who. And there was, most of the time I didn’t ask questions, I tried to find out the answers on my own.
EMILY GUERIN: One day, Steve talked to one of Silver Saddle’s owners. This guy named Jim Quiggle, who died before I got a chance to meet him. He worked with Tom Maney for years. And Steve said the guy just seemed... evasive. Which Steve thought was weird. I mean, most people, when they talk about history, they want to share what they know.
Steve became the police chief in California City in 2008. And after that, he asked two of his detectives to talk to the Kern County district attorney about how to investigate Silver Saddle.
And Steve says the DA told him, don’t even waste your time.
STEVE COLERICK: There was no way our department, if there was a crime, had the resources to do a financial white collar investigation like that.
EMILY GUERIN: Plus, Steve says no one complained about Silver Saddle to the police department. There was no victim. And without a victim, he didn’t have a case.
So Steve let it go.
And then in 2011, he retired. He focused on his rock collection. His dachshunds. And his wagon-wheel ruts.
But I could tell it bothered Steve. It seemed like he regretted not doing more.
He told me once, back in April 2018:
STEVE COLERICK: Emily, I think after a while, you resign yourself to what fight you can win, and what fight you can do more damage to yourself if you try to push the issue.
EMILY GUERIN: A few months later, James tried to ask him again about his regrets. But something had changed.
JAMES KIM: Yeah, so, you know, going back on the phone conversation that you had with Emily, I thought I, you know, heard that you did have some sort of regrets about not looking into them of sorts.
STEVE COLERICK: I didn't lose any sleep over it. If, if that's what you're asking.
JAMES KIM: I mean, with you, um, would you say that Silver Saddle was doing any sort of suspicious activity?
STEVE COLERICK: I never had any personal knowledge of that.
EMILY GUERIN: Suddenly, he made Silver Saddle out to be this fun after work hang out.
STEVE COLERICK: Looking back on it, what I remember is countless Christmas parties, retirement parties. And it was nice, good food. Really good food. Good atmosphere. Lot of fun. Lot of dancing. That’s, that’s what I remember. That’s probably what I’ll choose to remember.
EMILY GUERIN: What he’ll choose to remember.
I’m still struggling to make sense of what he did next: he handed me his bankers box of documents, and he told me to make copies of whatever I wanted. He said he trusted me.
STEVE COLERICK: You’re more than welcome for me to leave this, I can leave this here and you guys can just go through it.
EMILY GUERIN: Oh, like overnight, and we can bring it back?
STEVE COLERICK: Yeah, I trust you.
EMILY GUERIN: Okay.
EMILY GUERIN: He said he was glad I was looking into Silver Saddle. He said I was one of the good ones.
But then, he started ignoring me. He stopped answering my calls and texts. The last time we talked, it was only because he butt dialed me on Thanksgiving from Catalina Island. It was our last interaction.
MUSIC SWELLS
I was starting to think the town itself was the problem. It was too small, too insular, too gossipy.
Nobody here was going to put themselves on the line.
I needed to find people who had less at stake.
So I thought back to that weird tax default foreclosure thing that John Davidson had told James about in the park. Maybe Silver Saddle had a paper trail. I decided to find it.
That’s after a break.
MUSIC FADES
BREAK
The Kern County Administrative Offices are in Bakersfield, at the very bottom of the Central Valley. They’re next to the railroad tracks and across from the convention center, where you can see a Kiss concert, or a monster truck rally, or “The Bachelor” live on stage.
I know Bakersfield gets a bad rap, but I love it. It reminds me of all the small Great Plains cities that I used to hang out in when I lived in North Dakota. The railroads. The dust. The cattle and coal.
The county assessor’s office is on the third floor. I signed my name on the visitor’s sheet, and I walked down a long carpeted hallway to a small office.
SOUND OF DOOR, WALKING
EMILY GUERIN: Thank you.
SOUND OF MOVEMENT
LEE SMITH: Yeah, we're sitting in my office, my name’s Lee Smith I’m the assistant assessor. I'm with Emily…
EMILY GUERIN: Guerin .
LEE SMITH: Guerin. And, and I’m waiting for questions.
EMILY GUERIN: Ok, Ok. So. Um...Have you heard of Silver Saddle?
LEE SMITH: Oh, yeah, they've been around for a long time.
EMILY GUERIN: Okay, and, like, what do you know about them?
LEE SMITH: Um, well, umm…
EMILY GUERIN: Lee Smith reminded me of a Sunday School teacher. Sweet, and afraid to piss anyone off. He had been working for the assessor for as long as I’ve been alive. I asked him when he first noticed something unusual about land sales in California City.
EMILY GUERIN: When was the first time you sort of started thinking that like, it was a different kind of market than, say Bakersfield?
LEE SMITH: Pretty early on. Pretty early on.
EMILY GUERIN: Because what were you seeing even back then?
LEE SMITH: It’s what we're seeing today.
EMILY GUERIN: What Lee Smith was seeing — back then, and today — was Silver Saddle selling the same pieces of land over and over.
The way it worked was: somebody would buy a lot from Silver Saddle for anywhere from 10 to 40 thousand dollars.
And then, after a few years, they’d realize it was just a bad investment. So, they’d stop paying their property taxes and the county would take possession and auction it off.
And at these auctions, Silver Saddle would buy the land back, for like $500. And they’d turn it around and sell it again.
EMILY GUERIN: So when you see this over and over... does it like raise any red flags for you?
LEE SMITH: Um... that's a good question. Um. Um. Me, could you describe what you …
EMILY GUERIN: What a red flag means?
LEE SMITH: What a red flag means?
EMILY GUERIN: Like, are they running some kind of land scam where they're ripping people off and deceiving them about the value of the land?
LEE SMITH: Um… That's a good question.
EMILY GUERIN: That good question... is one that state investigators would ask themselves later on.
LEE SMITH: Yeah, that’s a good question, um.
EMILY GUERIN: “That’s a good question” is what Lee Smith said when he got uncomfortable. He smiled and shifted in his seat, crossing and re-crossing his legs.
LEE SMITH: You know, the assessor's office has its role, and our role is to assess the value, we aren't necessarily an enforcement entity, we're just there to value the property… So if you're, you’re asking me if I think it's fraudulent, that's, that's really not my role….
EMILY GUERIN: Like, I don’t know, I guess it just seems interesting that like, the people who would notice the trend, like your office, can't, can't necessarily, like, do something about it.
LEE SMITH: … Umm...
EMILY GUERIN: Like, if you worried...
LEE SMITH: Ok ok, now that's a good question. And, and, I mean, so, so, okay, so this is, you know, kind of the question I have for somebody who says, do something about it. So, what would we, what would you suggest?
EMILY GUERIN: I mean, you could contact the DA, they have, like, a consumer complaints division.
LEE SMITH: And, and, and, and a lot of people do do that.
EMILY GUERIN: But Lee didn’t contact the DA. He wasn’t one of those people. It wasn’t his job.
LEE SMITH: What do I want to say, in Kern County, you know, this is, this is, this not, not really a secret, you know, I mean, it’s, it’s, it’s, it’s, it’s, you know, it’s been going on.
EMILY GUERIN: Like, everybody knows, this is what happens in California City?
LEE SMITH: Yeah. laughs.
EMILY GUERIN: And it was true: everyone I talked to at the assessor’s office that day knew that Silver Saddle was selling the same pieces of land over and over.
MUSIC
The nice lady who helped me log into the property records database? She knew. She whispered to me, it happens a lot out there in the desert.
The chief appraiser? She knew, too. She told me she regularly sees people buying empty desert land for more than ten times what she thinks it’s worth.
The Kern County treasurer and tax collector, Jordan Kaufmann? He also knew. He runs the tax auctions, and for years he’s watched Silver Saddle buy its own land back for a couple hundred bucks. He actually got a law passed recently, closing that loophole. But the law didn’t stop Silver Saddle from selling a confusing desert real estate investment to unsuspecting people like Ben Perez.
EMILY GUERIN: Is there anything that you could do about it as the tax collector?
JORDAN KAUFMANN: Uhh... Not really, I mean. I, I focus on what my sort of constitutional duty is in the state of California, which is to, you know, get properties back in revenue producing status, however I can, whether it’s through a tax sale or just a normal collection of taxes.
EMILY GUERIN: Mh hm.
EMILY GUERIN: I wanted to know — if it’s not the job of the tax collector, or the assessor, to report or investigate the possibility of fraud, then whose job is it?
I went to the district attorney in charge of white collar crime in Kern County. He said
he’d only received two complaints, ever, about Silver Saddle. And he’d forwarded one of them to the California Department of Real Estate.
So I asked the California Department of Real Estate. And they said they’d received 17 complaints since 1984. But nothing had come of it: they’d closed all 17 without taking any disciplinary action against Silver Saddle.
That got me wondering about the Federal Trade Commission.
The FTC told me they’d received 14 complaints about Silver Saddle since 2014. But as far as I can tell, they didn’t act on any of them.
I told Ken Donney about this, and it really pissed him off.
KEN DONNEY: My alma mater has dropped the ball on this, big time.
EMILY GUERIN: Mh hm.
KEN DONNEY: Yeah, I’m talking to you guys and gals…
FADES
EMILY GUERIN: His phone cut out, but he said, “I’m talking to you, guys and gals at the FTC. You really did drop the ball. You should’ve stopped this a long time ago.”
Ken demanded I ask the FTC what had happened. What went wrong? Why hadn’t they enforced their big 1977 court judgement against Great Western Cities — the one that Ken believed applied to Silver Saddle?
So I did.
And they wrote back and said, no comment.
There was one last place to look. The Mojave Desert News. It’s the only newspaper based in California City. And when I was there, in the Fall of 2018, there was only one reporter covering the city: this guy named Kane Wickham, who goes by Citizen Kane.
And it was immediately apparent to me, talking to Kane, why the Mojave Desert News had not investigated Silver Saddle: the former publisher had worked with Tom Maney for years. He was one of Tom’s former business partners.
He was that guy Steve Colerick had said seemed evasive.
Kane once stealthily took pictures of me and James at a California City council meeting with his zoom lens, and he sent them to us later. I had no idea what to make of it.
I was no longer surprised that something so bad had been going on in California City for so long.
The people who were suspicious of Silver Saddle were afraid to speak up.
Or, they didn’t have the time, or the money, or the bandwidth to investigate.
Or, they didn’t think it was their job.
Or their jurisdiction.
Sigh. Which, honestly, made me feel tired, and jaded, and kind of sad.
And then, on October 1st, 2019, at 11:26 a.m., an email appeared in my inbox.
It read: California Department of Business Oversight Sues to Stop $30 million Silver Saddle Ranch Investment Fraud.
I scanned it. I saw phrases like “illegal land sales,” “high pressure sales tactics,” and “false promises.” I saw Marian Ducreux and Tom Maney’s names. I saw Silver Saddle and Great Western Cities.
I stood up at my desk and I ran, in my socks, over to my editor and I blurted out, oh my god, they’re finally getting shut down.
That’s next time on the final episode of California City.
MUSIC FADES
CORRECTION: Since we fact-checked this story, the California Department of Real Estate received 3 additional complaints about Silver Saddle. One resulted in disciplinary action against the company.
