Original Palos Verdes Developer a Crook?

Maureen Megowan, a Realtor with Remax Estate Properties, provides an article in a series titled "South Bay History Tidbits."

In November 1913, Mr. Frank Vanderlip had acquired approx. 16,000 acres of the Rancho de los Palos Verdes. He had grand plans to develop the Palos Verdes Peninsula; however World War I curtailed his plans.

In 1921, a real estate developer named E.G. Lewis acquired an option to purchase the entire 16,000 acres. His first acquisition was the Palos Verdes Project, which would constitute the future City of Palos Verdes Estates and part of the MIraleste area of the current day City of Rancho Palos Verdes.The community was called Palos Verdes Estates and consisted of 3225 acres.

Mr. Lewis was an entrepreneur and a visionary and was the founding father of two model cities, University City in Missouri ( founded by Mr. Lewis in 1904 in conjunction with the 1904 World's Fair) and Atascadero, California ( founded as a utopian colony by Mr. Lewis in 1913 ) . He was also a successful magazine publisher and investor where he made a fortune, but unfortunately later in his life disgruntled investors filed numerous lawsuits against him.

Mr. Lewis had plans to raise $35 million to develop the property by syndicating interests to investors. Mr. Lewis, unfortunately had a checkered past and had been accused of fraud in several previous investment schemes, including oil wells, almond tree farming, and a magazine. On March 30, 1922, the Los Angeles Examiner published a telegram it had received:

"Suggest you investigate E.G. Lewis before running any more of his adds(sic) if you honestly wish to protect your readers. In one set of circulars he holds out gigantic promises and in another set he sidesteps past due obligations to his thousands of old oil investors. In my opinion he is paying for his big Palos Verdes advertising campaign with money diverted from investments in his huge unsuccessful doodlebug oil promotion in Montana."

The cable was signed J.E. McDonald. His history with Lewis was unclear, but he appeared to be a previous victim. After Lewis'' schemes for Trust Indenture Notes met with distrust by The Title Insurance and Trust Company of Los Angeles in February 1923, Mr. Vanderlip stepped back in and a new real estate trust financed by some 4,000 investors was created, and the revived Palos Verdes Project was again under the financial management of Vanderlip.

Mr. Lewis was sued for $20 million by previous investors and in 1925 he declared bankruptcy. In 1927, he was sentenced to six years in federal prison. He was paroled in 1931 but was sent back to prison for violating parole. Released again in 1935, he returned to Atascadero, where he spent the rest of his life as a penniless recluse and died in 1950.

For more local history , go to my web page http://www.southbayhistory.com located on my website http://www.maureenmegowan.com .