SAN DIEGO -- Every good lie has at least a bit of truth, and nobody knows that better than Larry Smith.

"I don't agree to be on camera, and I'm not public", he said the day last July when the I Team tried to ask him about his scheme.

He's a con artist who rips his scam right out of the pages of the history books, preying on modern day victims in fear of losing their homes to foreclosure.

Last July, the I-Team first exposed Smith, profiling four victims who had turned over thousands of dollars to him, with no results.

After that story aired, we were contacted by Rheanne Guevarra.

"It hurts so bad because I worked hard for that money, and it's all gone," she says.

She proves what the I-Team suspected; Smith has taken his scheme across state lines, into Arizona and Nevada. He targeted 3 homes owned by Guevarra in Las Vegas.

"Per property, it's $7,500," she points out, money wasted on a false promise. She handed over $25,000 total to Smith after attending a seminar in a Las Vegas office park. A hundred other people also attended the seminar.

"I've been saving this money since day one," she says, "it's basically my son's college fund."

Larry Smith's lie is the promise to save her properties from foreclosure and to make her sovereign, like an independent country. No bank or government official can trespass on her property. It seems like nonsense, but it's based on truth.

What's most intriguing is how Larry Smith lures his victims. He uses something called a Spanish land grant, a document intended to protect the property rights of the earliest American settlers. The first land grant in San Diego dates back to 1823.

"It was the Mexican government that actually granted this," points out Stephen Colston, an associate professor of history at San Diego State University.

"This is where you see the Ranchos with thousands of acres."

The land grants were given to loyal subjects of Mexico and Spain as rewards. After the U.S.-Mexico War, the U.S. Government agreed to honor those property rights, including 32 land grants in San Diego and hundreds in other southwestern states. This is the inspiration for Larry Smith's scheme.

Smith does his homework. The I-Team finds that he copied public documents from the late 1800's, listing old land grant properties. He then uses those documents to convince struggling homeowners he can sell them what he calls a "United States Land Patent."

"He just seemed to have all the answers," says Guevarra.

Smith will flirt or use sex to entice women to hand him their money. Guevarra has a text message from him, saying he needs a massage to improve his mood so he can create a good document. But those Smith documents don't prevent foreclosure, making tough times even tougher.

"They end up taking the individual's money, preying on the people already experiencing financial hardship," says Keith Slotter Special Agent in Charge of the local FBI.

Land grants have not been given in California since about 1846, says Professor Colston. Even back then, con artists just like Larry Smith were selling phony land grants, with the same results.

"Will any of these papers prevent a bank from foreclosing?" I-Team reporter Lauren Reynolds asks the Professor.

His answer is simple, "No."

The 10News I-Team has been in touch with law enforcement regarding Smith and his land grant scheme. While they will not talk to us on the record, reliable sources confirm local and federal agencies are "very aware" of his trail of victims.