ANTELOPE VALLEY LAND FOCUS OF SUIT; CLASS ACTION ALLEGES EIC FRAUD.

Byline: The Associated Press

Two San Francisco Bay Area real estate brokers are facing allegations of fraudulently selling hundreds of acres of undeveloped Antelope Valley desert to thousands of U.S. and foreign investors.

Chen C. Wang, head of Redwood City-based EIC Group, and his wife, Victoria Rebisoff Wang, have faced dozens of lawsuits filed on behalf of angry American and Asian investors, according to a report in the San Francisco Examiner.

Most of the lawsuits were settled before reaching trial, but the largest one yet was filed last week in Los Angeles Superior Court, a class action on behalf of 5,000 investors in California, Taiwan and the Philippines.

The suit accuses the Wangs and EIC of a 17-year scam to defraud small investors out of $200 million in life savings from Individual Retirement Accounts.

``It's outrageous that they were targeting people's retirement funds with promises of enormous (investment) returns,'' said Bill DeGarmo, an attorney at Belli, McLean & DeGarmo, the San Francisco law firm that filed the class action. ``We've yet to find anybody who has made money on this, other than Mr. Wang himself.''

The Wangs and their attorney have declined to comment on the allegations, aside from calling the class action ``a very frivolous lawsuit.''

Speaking to the Examiner from his office, Chen Wang added, ``This is a country of laws, and we have to be very careful (in commenting on legal matters).''

One investor in the class-action suit is Bonnie Silver, a 54-year-old secretary who lives and works in Santa Clara. She heard about EIC five years ago through a close friend who worked there.

Dazzled by the company's sales pitch, Silver flew down to the Antelope Valley to tour the desert with EIC representatives. Driving past Joshua trees and sagebrush, they gushed about the region's economic future. They showed her a busy shopping center, the freeway, new housing developments, Edwards Air Force Base.

``It was a boomtown - extremely impressive,'' Silver said.

A few days later, she wrote EIC a $20,000 check as a down payment toward a 25 percent undivided interest in eight acres of desert land in Kern County. She also sent the company $198 a month as payment toward the rest of the land and $784 in property taxes.

But Silver ran into trouble two years ago when she tried to sell back the property to EIC, which had promised to buy back the land at any time, she said. Several letters and telephone calls to EIC were never returned, she said.

``I feel very ripped off,'' Silver said. ``I'm not a wealthy person. I'm a single woman in my 50s, worrying how I'm going to survive retirement. That $20,000 is a lot of money to me.''

Wang, a self-made businessman, came to the United States 40 years ago as a poor Taiwanese immigrant. The scholarship student earned an MBA from the University of California at Berkeley, then landed a sales job at IBM Corp. He left IBM in 1968 after scraping together $3,000 to start EIC Group, a real estate broker firm. By the 1990s, Wang boasted that privately held EIC had $100 million in assets.

According to the class-action suit, EIC salespeople used ``boiler room'' telemarketing pitches and tours of the Antelope Valley, convincing clients to sign investment contracts for part ownership in hundreds of acres.

They weren't told the land holds little value in its current undeveloped state, the complaint alleges. According to the state Department of Real Estate, none of the property is zoned for development. There are no paved streets, sewage, electricity or water services. Much of the land sits in hazardous flood areas.

To entice clients, the salespeople inflated the value of the land by five to 10 times its real worth, according to the lawsuit. They also promised investment returns of 25 percent to 30 percent a year, the suit alleges.

The investors grew suspicious when they never received title to the property or saw the land being developed.

EIC continued to sell the desert properties even after the Department of Real Estate issued an opinion last year warning the company that it could not claim the land has ``investment merit'' or ``future appreciation potential.''

``That land is desolate,'' said Kevin McLean, one of the class-action attorneys. ``It's certainly not going to jump in value the way they portray it.''

Business people familiar with Wang say his marketing operations appear highly professional, from dynamic sales training sessions to glossy brochures on EIC Group. Its slogan: ``Creating Wealth From the Ground Up.''

Typically, investors forked over $10,000 to $30,000 for small parcels. A few poured big cash into the alleged land swindle.