CA Attorney General Catches Foreclosure Rescue Scam Artists

The office of California Attorney General Edmund G. Brown says it has shut down a team of scam artists that acquired deeds to hundreds of homes in foreclosure by convincing desperate consumers to place their property in a ‘land grant,’ a phony and worthless real estate document.

Federal Land Grant Co., a San Diego-based business run by Bill Hutchings, his wife Xiaoke Li and former wife Shawna Landis, tricked desperate homeowners into believing that they could protect their homes from foreclosure by deeding their property to ‘federal land grants.’ Land grant transfers, used hundreds of years ago when the U.S. was still acquiring land from other countries, are no longer recognized by any court or county assessor.

‘There hasn't been a legitimate use of the land grant since the conclusion of the Mexican-American War,’ Brown points out. ‘If some fast-talking scam artist offers a quick escape from foreclosure using archaic documents, be extremely suspicious.’

Federal Land Grant required homeowners to pay up to $10,000 to put their property in a so-called land grant that the company claimed would prevent foreclosure. Federal Land Grant also tricked homeowners into signing over the deed to their home and paying the company rent.

At least two Riverside County Superior Court judges, when faced with foreclosure sales involving so-called land grants, did not give any consideration to the deeds and issued eviction orders sought by the lender, the attorney general's office notes.

In addition to filing a complaint for an injunction and penalties against Federal Land Grant, the attorney general has obtained a restraining order to halt the defendants' illegal activities and an asset freeze so that the company's money can be used to refund consumers. A hearing for the preliminary injunction is set for June 5.

Source: California Attorney General's Office

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