The brochure showed a lake surrounded by snow-capped peaks, with horses gamboling about in the meadow. It looked like the place Elena and Larry Crossgrove dreamed of: a little ranch of their own. They were sold before they ever stepped foot on the land.

Four years later, the Crossgroves' bank account is as dry as the gray dust of the San Luis Valley. They've poured their life savings into a piece of property that's worth just a fraction of what they've spent. And there may be nothing they can do about it.

The developers who sold the Crossgroves the land recently lost a lawsuit charging them with deceptive sales practices at another project 200 miles away. Partners Larry Hall and Craig Hammond promptly filed for bankruptcy.

Since then, the Colorado Real Estate Commission has put the Wild Horse Ranch Association out of business for selling land without first registering it with the state. Under Colorado law, any such sale could constitute a felony.

Commission investigators have turned over their files on Hall, the lead partner, to the attorney general's office for possible disciplinary action. "We've done what we can do," says commission deputy director Harry Reagan.

Not so fast, responds Roberta Earley, the Crossgroves' Colorado Springs lawyer. If the commission had really done its job, she says, Hall and Hammond would have been caught sooner.

The developers may have run afoul of the state bureaucracy, but they have done nothing wrong, says their lawyer, Mark MacDonnell. Although there have been a few misunderstandings, MacDonnell adds, by and large buyers have been pleased with their property.

Not the Crossgroves.

"For only a few dollars a month, you can own part of the Colorado dream." For decades ads in newspapers, magazines and even the backs of comic books made that promise.

It sounded too good to be true, but suckers still mailed in their money--usually from out-of-state, and frequently without ever seeing the land they were buying. As often as not, they made payments for a few years and then gave up the property--especially after visiting the land and discovering that the lush green pastures and aspen-lined streams depicted in the ads were really windblown prairie. Or finding out there was no potable water or electricity--and no access road to the promised land.

The property would then revert back to the seller, who would peddle it to the next would-be rancher. Or sell it cheap to the next developer. Whole subdivisions were sometimes sold and resold that way.

There were other scams, such as the near-legendary land-contract sales. In those cases, the buyers received contracts but not the deeds to their land. If they got behind even a payment or two, the seller would take back the land. Since their contracts were rarely recorded, the buyers were at the mercy of unscrupulous developers.

Then there were the sellers who not only kept possession of the land titles but later mortgaged them. Buyers might make payments for ten or fifteen years, only to discover that rather than own the land, they had a whole new mortgage to pay off.

But there wasn't much they could do about it. Even if they found lawyers to take their cases, the attorneys wanted money. Often, disappointed buyers decided the fight wasn't worth it.

In 1972 the Colorado Legislature passed a bill determining that the sale of any piece of property less than 35 acres in size would be regulated by the county commissioners or municipal zoning agencies; anything above would be regulated by the Colorado Real Estate Commission. The 35-acre cutoff was an arbitrary figure, but it gave rise to a booming business in 35-acre (and up) ranchette subdivisions across the state. Developers who didn't want to deal with county commissions, which might require such novelties as land-use planning, simply made their lots larger.

A decade later, the legislature finally began taking steps to clean up the sale of raw land--property with no utilities in place. Most important was the requirement that ranchette subdivision developers register their projects with the Real Estate Commission and get its approval of their plans. As part of that registration process, the commission would check the title to the land and ask developers to make--in writing--certain disclosures regarding access to electricity and water, any taxes owed, the status of access roads and any encumbrances on the title.

The developer didn't necessarily have to provide water and electricity, but at least the buyers would know what they were getting. Selling unregistered land became a felony punishable by up to a year in prison and a $100,000 fine. And unless they were registered with the commission, land-sales contracts also were prohibited.

But the resource-limited Real Estate Commission still had to hear about unregistered land deals before it could do anything about them--and the very remoteness of places like the San Luis Valley insulated land scams from much scrutiny by the Denver-based agency.

In the spring of 1991 the Crossgroves were living in Hoehne, a small town near Trinidad, when Elena saw the advertisement in the Denver Post: "Wild horse ranch for sale. Cheap."

They had moved to Colorado a year before after selling their home in Utah. They had $64,000 in the bank and a dream of owning a small ranch. Elena called the number in the ad.

A few days later she received the brochure with photographs of horses, the lake and snow-capped peaks. The accompanying letter thanked the Crossgroves for their interest in the Wild Horse Ranch subdivision near Alamosa. There were good access roads and electricity available, the letter promised; the land itself had plenty of grass for livestock and was "water rich."

But the letter also warned that the brochure was misleading. "These photos do not adequately show the spectacular western beauty and magnificent scenery of this area," it chirped.

The Crossgroves arranged to meet Craig Hammond, one of the developers, in Alamosa. "He said to bring a cashier's check for $900, just in case we thought we might like to own the ranch," Elena recalls. In the meantime, they checked with agriculture experts at Colorado State University, who told them their plan to raise sheep and New Zealand white rabbits could work.

The Crossgroves hooked up with Hammond in the parking lot of a Holiday Inn. At his urging, they hopped in his car for the drive to the Wild Horse Ranch.

The route took them down the Old Blanca Highway past a wildlife refuge; Hammond pointed out the Great Sand Dunes in the distance. And there was the Sangre de Cristo range as promised, although the mountains looked a lot more distant than they had in the brochure.

The land itself was more disappointing. It wasn't in the mountains, nor was it a grassy plain inhabited by wild horses. Instead, it was flat as a pancake, covered with knee-high rabbitbrush--a tough, gray-green bush of no particular use--and home to jackrabbits and coyotes.

Still, as Hammond pointed out, it was the prettiest of the hundred 37-acre parcels that made up the subdivision. And there was a pond on the property where deer came to drink; a flock of ducks paddled around on its surface.

There also was a good access road, "that he said we could name anything we wanted," Elena recalls, "like Bunny Lane because we were going to raise rabbits.

"We asked him, `Where's the electricity?' He pointed to a power line about a quarter of a mile away and said it would cost $4,000, maybe $5,000, to bring a line to the property." On a map of the land, Hammond scribbled the word "electricity" at the spot where the power pole stood.

Then, Elena says, he turned on the old hard sell. "He kept saying that this was the last piece of property in the subdivision and that he had another buyer...if we didn't take it today, it would be gone."

The Crossgroves talked it over. Although the land wasn't what they'd expected, it was cheap--only $7,500. And with each day that passed, their dream wasn't getting any closer. Larry was already 57, a little old for starting a sheep ranch.

Hammond said that if they gave him a down payment of at least 15 percent of the asking price, they would receive a warranty deed, which guarantees title to the land, and title insurance in sixty days. They decided to trust him. They knew they should have done more checking, Elena says, but they didn't want to chance losing the land.

The Crossgroves handed over a cashier's check for $2,100 on April 20, 1991. The remainder was due in a year.

They started getting ready to move to their property. On weekends and when they could find the time during the week, they'd drive to their land and prepare for the big day.

They planted trees--twenty firs and ten poplars--and built a barn to house the rabbits they planned to buy. They bought a Ford tractor. And they purchased a generator to provide electricity until Public Service Company could hook them up. When they'd called PSC, they'd been told it would be thirty to sixty days before someone could get out to their property.

In the meantime, they paid $2,500 to drill a well and install a septic system. They put down another $5,000 on a double-wide mobile home and soon moved in with their nine-year-old daughter.

The moment Larry started the generator, Elena knew she wouldn't want to live with it for long. The noise scared her. She could hardly wait for the power company to show up.

Then the PSC workman came and gave them the bad news. "He said, `Whoever told you $4,000 to $5,000 lied to you,'" Elena recalls. "He said it was going to cost at least $25,000."

The pole they say Hammond marked on the map led to a high-voltage diversified line that could not be tapped for residential use, the PSC employee told them. The line the Crossgroves needed was more than a mile away--and a lot more expensive to reach.

But the bad news didn't stop there. When the generator caught fire, they had to put it out with snow because they couldn't get water from the well without electricity. After that, a neighbor allowed them access to his artesian well, but that meant hauling about thirty gallons of water several hundred yards every day. And when Larry broke his leg, Elena had to do all the hauling herself.

The winter was starting as one of the coldest on record, and all the trees they'd planted died. The Crossgroves spent their first Christmas and New Year's as ranchers in a motel, because they had no heat. Elena cried the whole time, while Larry did his best to assure her that their dream would still become a reality.

They contacted an attorney, who took one look at their Wild Horse paperwork and said it was such a mess they'd have to put up $10,000 for him to file a lawsuit. And the ground they owned wasn't worth that much, he cautioned.

He did note one curiosity: The Crossgroves hadn't received either the warranty deed or the title insurance they'd been promised by the developers. They did have an unsigned promissory note--but it said their property was actually a lot in the Longhorn Ranch subdivision in Las Animas County.

Hall and Hammond and their general partnership, the Wild Horse Ranch Association, first ran into trouble with the Real Estate Commission in May 1991, according to deputy director Reagan. That's when the commission received information that the developers were selling lots in an unregistered project called Longhorn Ranch Phase III, a subdivision between La Junta and Trinidad in Las Animas County.

The commission had not received any complaints from buyers. "But the concern is that nobody had looked into the titles," says Reagan. "And they weren't making the disclosures or telling buyers about the right to rescind." That right gave buyers five days to back out of contracts.

It was a first offense for the Wild Horse Ranch Association, so the commission asked the developers to register the remaining lots and give the commission jurisdiction over previous sales in case there was a dispute. Hall and Hammond agreed to the conditions, although four months passed before they were able to satisfy the commission that they were in compliance.

Attorney Earley first met with Larry Hall and his lawyer in spring 1991, almost exactly when the Crossgroves were giving their first payment to Hammond. At the time, Earley represented Pat and Alan Walters, a couple who owned the ranch next to the Longhorn Ranch subdivision.

Hall is their nephew.
Hall and Hammond had been selling lots at the subdivision with maps showing an access road easement that ran across the Walters property--really a trail the couple used once or twice a week to care for the cattle.

Such easements are worth a lot of money--none of which had been offered to the Walterses. Hall had simply graded the trail and let his buyers start using it. Their traffic raised a lot of dust, and the city folks in the country subdivision were not real good about closing the livestock gates. In fact, someone even cut down the gates when he decided they were too much trouble to use. As a result, a rancher who'd been paying the Walterses to use their land for his cattle quit the lease.

Earley hoped to get a settlement for her clients, but Hall wasn't budging. "His lawyer said we didn't have a case," Earley recalls. He told her that Hall thought his relatives ought to let him use the land.

But in 1992, Earley won an injunction to stop the traffic. The road was chained off, angering subdivision landowners. One man told the lawyer it was "like coming home to find someone else has parked in your driveway."

The Walterses weren't about to quit. They began collecting information about other land deals made by their nephew's Wild Horse Ranch partnership. "They're real principled people," Earley says. "The kind you find a lot in that part of the country. If somebody was being hurt, they wanted to put a stop to it."

The Walterses had contacted the Real Estate Commission in 1991, but it moved too slowly for their liking. They'd also gotten in touch with the Las Animas district attorney, Earley says, "but got told that the DA didn't have the manpower for an investigation."

The Walterses did. They found people who'd invested their savings in Wild Horse properties based on nothing more than the photographs in the brochures. They had no idea that what they owned was a hunk of inhospitable prairie.

Sue Frickey of Albuquerque, for example, had bought land in the same area as the Crossgroves. She'd received a "property owners' fact sheet" stating that there was legal access to the property by private and county roads. But when Frickey decided to sell the property, the Alamosa realtor she'd contacted to do the deal told her there was no access to her land.

For a year, the Crossgroves had been pouring their savings into their land. But the 200 head of sheep lasted only until the spring of 1992, when the couple sold them because they couldn't keep hauling enough water. And they gave the rabbits away.

When a second generator burned out, they purchased a solar system from a traveling salesman for $5,000. At least it gave them electricity, although not enough to run their well pump. They conserved electricity, which meant a lot of candlelight dinners, "which I used to think of as romantic, but not anymore," Elena says.

The couple finally realized why no one else was trying to live on that portion of the Wild Horse subdivision--the land that developers had said was going so fast.

They tried to find work off the ranch, but it wasn't easy. They weren't comfortable leaving their daughter at home without a telephone and with only iffy utilities. Larry eventually got a job working in an oil-change garage for minimum wage. They could get by, but their savings were dwindling fast.

They thought about selling the land, but a realtor told them it was only worth $50 an acre--about $1,850. They'd put down more than that as a down payment and then invested thousands more in their dream.

Elena was in the kitchen washing dishes in a bucket when Hammond arrived on April 20, 1992, exactly a year after they'd handed him the down payment. In the intervening months she'd called him many times, but he'd never returned the call. Now she didn't even want to let him in the trailer.

But Larry said maybe they'd be able to talk. "He didn't want to listen," Elena says of Hammond. "He just wanted the money or he was going to take the land."

The couple pointed out that they hadn't received the promised warranty deed or title insurance. "He changed his tune," Elena recalls, "and said we could pay him the interest and have more time."

They had more time, but they also soon had more trouble. A neighboring landowner reported that the shared access road was more than half on his property. Instead of naming the road Bunny Lane, the Crossgroves would be lucky to retain any access on that road at all.

The Crossgroves finally took their complaints to the Real Estate Commission in June 1993. Investigator Janelle Tyree was sent to look into the charges.

The couple told Tyree that Hammond had misrepresented the cost of getting electricity to their property. They showed her the map where he'd written "electricity" on the spot where the power pole is located about 2,000 feet from their property.

But Hammond told Tyree that the writing simply indicated he'd told the Crossgroves there was electricity available somewhere along the county road just north of the subdivision. "Hammond stated that he has always told buyers or potential buyers to call Public Service to check on the availability for themselves," Tyree wrote in her report. It was not completed until April 1994, nearly a year after the Crossgroves made their complaint.

As for the question of access, Tyree determined that the Crossgroves had another route to their land, although it was in poor condition, and had yet to be denied access to the first road. "The actual physical location of the road the Crossgroves use apparently has never been surveyed," Tyree wrote. "Larry Hall apparently cut the roads himself with a road grader."

And the Crossgroves' deed, she said, was being held until they made a final payment. "Hammond claims that the Crossgroves came up with their allegations only after receiving demand for payment," Tyree wrote.

When the investigator told the Crossgroves there didn't appear to be sufficient evidence to support their charges, they started writing other landowners.

"We have responded to many phone and letter inquiries from out-of-state owners," Tyree reported. "All persons who have indicated that they have a complaint have been encouraged to put their complaints in writing and sent them to this office." The only person who did, Tyree added, was Wayne Mattingly, who bought his land in 1986 and says he was told that electricity was readily available.

In May 1994, the board of the Real Estate Commission decided not to take action on the Crossgroves' complaint.

According to deputy director Reagan, there simply wasn't enough evidence. "It was a sort of `he said, she said,' thing," he says.

More important, the board decided it didn't have jurisdiction over the case because of a couple of loopholes in the statutes.

The subdivision where the Crossgroves bought land--the Mustang Division of the Wild Horse Ranch Association--had been sold out in the 1980s. The lot purchased by the couple was a foreclosed property which had been taken back from the original buyers. As such, the resale of the property didn't fall under the subdivision statutes requiring written disclosures.

There was another hurdle: Hall was the only partner with a real estate license. And although he was selling property on behalf of the partnership, Hammond represented the action as a personal sale, one that didn't require a license. Therefore, the Real Estate Commission had no jurisdiction.

Attorney Earley added the Crossgroves' case to her load last October. She'd been told of their predicament by the Walterses, who'd driven to the San Luis Valley to check things out for themselves. She'd read Tyree's report. But none of it prepared Earley for what she saw at Wild Horse Ranch.

"We spent about five hours there, videotaping the place," she recalls. "Elena showed where she had to haul the water. Where the sheep had been. The barn that used to have the rabbits."

And they'd made one more small improvement to the property. Their well was still worthless, but a plumber had helped them put a pipe between their neighbor's artesian well and their house. Although the water had to run continuously, at least they had indoor plumbing.

"I really felt for them," Earley says. "They had this dream, but now they had nothing. They were thinking about just leaving. Giving up."

In December Earley won the Walterses' lawsuit against the Wild Horse partners. The jury agreed with each of their contentions: that Hall and Hammond had engaged in deceptive trade practices, trespass and willful misrepresentation. The judgment against the partners was for $244,000, plus attorney fees of $78,000. "I don't think they believed that any attorney would take the case," she says. "They were really ticked off when we won."

When Earley had subpoenaed the partners' records, she'd found warranty deeds in some files that had never been recorded, as well as other cases of Hammond selling property without a license.

And as the case went on, she heard more stories from landowners who discovered there was no access to their property. Or found that electricity wasn't as available as had been represented. Or discovered that the land wasn't what the buyer expected. No mountains. No aspen. No streams. Just rabbitbrush and dirt.

After winning the first case, Earley warned the partners that she had another five lawsuits coming down the pike. And for good measure, she'd sent their brochures to the Federal Trade Commission along with photographs of the actual property.

Hall and Hammond declared bankruptcy in U.S. Bankruptcy Court in Denver in early January, claiming the Walters judgment had pushed them into insolvency. Although the Crossgroves still owed them money, the partners listed the couple and all the other people who had bought land from them as potential creditors. "They admitted at a hearing that they were concerned that these other people might sue," Earley says.

She also complained to the commission that Hall and Hammond were again selling unregistered land in a Las Animas County project known as Cone Mountain. This second offense resulted in a February 8 decision by the Real Estate Commission's board to reject the partners' development application, effectively putting them out of business. The partners have sixty days to file an appeal.

For Earley, that's too little, too late. She contends that some members of the commission seem intent on protecting Hall and Hammond. As evidence, she cites the case of another developer, Timothy O'Riley, who used to own the subdivision at Longhorn Ranch. The commission went after him for selling unregistered land; after several unsuccessful attempts to get him to comply, O'Riley was eventually brought before a judge who found him in contempt. The judge ordered O'Riley to leave the state and not return--or he'd have to serve his sentence. O'Riley left, and no one has seen him since.

"We hear he's in jail in another state for the same thing," Reagan says.
Earley says her investigations showed that much of the partners' land was sold sight unseen. And most of it is still unoccupied, awaiting its owners.

"I just kept thinking," she says, "what would happen to someone who sinks their money into this property thinking that someday they will retire in the Colorado mountains? Then they come out and find they're stuck with a piece of prairie where they can't even get normal things like electricity or water or roads."

Earley now must fight to have the bankruptcy stay lifted so that the Crossgroves' lawsuit can go forward. She's concerned that it happen before April, when the Crossgroves must pay three years in back taxes or let their land go to a person who bought it.

Because the Crossgroves' name wasn't recorded on a warranty deed--which they still have not received--they didn't get tax notices. The total bill is about $1,000.

They don't have it.

Craig Hammond didn't respond to telephone messages from Westword. Larry Hall called on his lawyer, Mark MacDonnell, to answer for him.

"He's kind of pissy this afternoon," MacDonnell says. But, he adds, his clients have done nothing illegal.

"Hey, Adams State College [in Alamosa], where I went to school, had a picture of Mount Blanca on the cover," MacDonnell says. "You should have seen the reaction of kids from New Jersey and New York who came to school and found themselves in the middle of a desert."

He concedes that Hall and Hammond should have registered the Cone Mountain project. "They thought that they had it structured so that they did not need to register," he says. In his response to commission investigator Tyree, Hall said the restructuring was "a ridiculous plan he never carried out."

The unrecorded warranty deeds were due in part to sloppy bookkeeping and in part to agreements with some buyers to hold the deeds in escrow until final payments, MacDonnell adds. But he says he is unaware of any complaints about deceptive sales practices. "They're not selling the land sight unseen," MacDonnell says. "They're looking and they're buying. And I must have talked to fifty people who are tickled with their land."

Reece Oldham, for example. The California resident bought two parcels of land from the partners after seeing pictures of the actual property and says he has no complaints. Oldham had been looking into purchasing Colorado land for about four years when he bought his property from the Wild Horse Ranch partnership.

"They've been aboveboard in all our dealings," says Oldham, who plans to farm his 75 acres after his retirement in a few years.

MacDonnell says his clients plan to appeal the commission's decision and its attack on Hall's license. They contend that they need to be able to sell their property--free and clear of the Walters judgment or any other lawsuits--in order to satisfy their creditors.

There's some legal precedent for that argument, and the bankruptcy judge may agree. If he does, his decision would negate the commission's action. The Wild Horse Ranch would be back in business.

Deputy director Reagan says his agency will contest any such decision, but he agrees that the commission might lose.

In the meantime, the commission contacted the Las Animas district attorney regarding the possibility of filing felony charges. "But there was no action," Reagan says. "We've contacted numerous district attorneys on these sorts of cases and don't get much response. They've got bigger fish to fry, I guess."

The commission also sent a letter to the Wild Horse Ranch partners, reminding them that selling unregistered land is a felony.

It's a fairly standard form letter, Reagan says. In fact, the commission recently sent a similar letter to a California developer who was selling unregistered land in the San Luis Valley.

The commission had heard about those sales from a district attorney in California who'd received complaints that the land was not as advertised. To date, the commission has been unable to determine exactly what land the developer is selling, or where. Still, Reagan says, they sent the developer a cease-and-desist order and a copy of the state regulations spelling out the felony consequences.

But the land sales continue. In recent years Colorado has seen a 50 to 75 percent jump in registrations of ranchette subdivisions. And although complaints have not kept pace, that could be in part because some owners have yet to see their property. Developers working like Hall and Hammond reach hundreds of thousands of potential buyers by running land-for-sale ads in such national publications as USA Today and the Wall Street Journal.

"And, of course, it's all `in the shadow of the Sangre de Cristos,'" Reagan laughs.

The San Luis Valley is particularly popular, because every square acre has already been platted for development. Since platting can be expensive, San Luis Valley projects keep costs low--and turnover on land ownership high. "Which is why we keep seeing the same land being registered here, over and over again," Reagan says.

And why they keep seeing complaints about the same pieces of property, from people who've fallen for the same old lines. "We keep urging people not to buy property sight unseen and to check it out thoroughly," Reagan says.

"But there's a whole new generation of buyers who are coming of age. And they don't always listen.


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