Transient Charged After Admitting He Set Laguna Blaze : Arson: Jose Soto Martinez confesses after arrest for lighting three small fires in Fullerton. He says he was trying to commune with a demon.

SANTA ANA —  A 26-year-old transient was charged with arson Friday after telling investigators he started the $528-million Laguna Beach fire last October in an effort to commune with a demon.

Jose Soto Martinez, who authorities said confessed to sparking the Oct. 27 fire after being arrested for lighting three small fires in Fullerton, was being held without bail in the Orange County Jail.

At an afternoon press conference, law enforcement officials said Martinez “willfully and maliciously” set the blaze that, in a matter of a few hours, left the scenic beach community resembling a war zone.

In announcing the filing of charges against Martinez, Orange County Dist. Atty. Michael R. Capizzi said the felony complaint in-volves “four counts of arson of interest to thousands, if not millions, of people here in Orange County and Southern California.”

Joining officials from the district attorney’s office were representatives from the Laguna Beach police and fire departments, the Orange County Fire Department and the Fullerton police and fire departments. Fullerton authorities arrested Martinez Sept. 16 in connection with three fires in and around an apartment complex.

During questioning after the arrest, Martinez told investigators he was also responsible for other “big fires” in the area, according to court documents. Martinez identified an Aug. 5 brush fire on Green River Drive near Anaheim. He later made statements implicating himself in the Laguna fire, law enforcement sources said.

Sources also confirmed that Martinez told police he set the fire to conjure up a demon king named “Gotam.”

An illegal immigrant and transient who had $8.12 in his pockets when he was arrested, Martinez remains a mystery.

Official records indicate he has a previous arrest in San Diego County for first-degree burglary as a teen-ager, but was tried and convicted as an adult and sentenced to four years behind bars. According to Orange County jail booking records, he claimed he had AIDS and had attempted suicide.

Until his arrest for the Fullerton fires, he had not been considered as a possible suspect by Laguna investigators, authorities said.

“It was like kicking a rock and finding a gold nugget,” Fullerton fire official John Clark said, noting the role luck might have played in the case.

Martinez is scheduled to be arraigned Monday. If convicted of all four counts of arson, he would face a maximum of 30 years imprisonment.

At the same press conference, authorities also announced that they are seeking information from a man identified only as Mike, who apparently stayed with Martinez the night before the Laguna fire. They are also seeking people who might have driven Martinez away from Laguna Beach after the fire.

When asked if Martinez was believed to have acted alone, Capizzi said authorities had the man they believe is “responsible” for the blaze.

Earlier Friday, investigators initially said they had regarded Martinez as merely a suspect they wanted to question. They acknowledged that it was not uncommon for people, particularly firebugs, to claim responsibility for large fires.

But Martinez’s knowledge of details surrounding the start of the fire added credibility to his claims, investigators said. He led investigators to the exact location where the fire started. He also said he used matches--and not an accelerant--and that, too, is consistent with investigators’ findings.

“We take everybody seriously that comes up with something like this--short of the ones that were beamed out of the spaceship,” said Dan Runnestrand, chief investigator for the Orange County Fire Department.

Powered by Santa Ana winds, the October fire raced up Laguna Canyon and engulfed hillside homes overlooking the heart of Laguna Beach. As firefighters from around Southern California converged on the beach community, it took on a surreal appearance, with helicopters darting about overhead, fatigue-clad troops in the streets, and residents, cut off by closed highways, frantically trying to return to the community via boat to save their homes.

At the height of the fire, flames consumed an average of 45 acres and four homes per minute.

“We are very pleased with the fact that we have a solid suspect in custody,” said Laguna Beach Police Chief Neil J. Purcell Jr., adding that it had been a “very trying situation the entire year for these people” who lost their homes.

“Most importantly, I think this will help bring about closure to many of the victims,” who could do little but watch helplessly as the fire scorched more than 14,000 acres and destroyed or severely damaged 441 homes, Purcell said.

Fullerton police arrested Martinez two weeks ago after police said he admitted he set fires behind a community college district administration office and in the laundry room of an adjacent apartment complex.

The fires occurred over a two-hour span on the morning of Sept. 16. Just after the third fire was spotted, a group of college employees surrounded Martinez, who was hiding in some bushes, and ordered him to step forward. He sheepishly appeared with a cigarette lighter in his hand and quietly accompanied those who had caught him with his head in his hands, as if he was in a daze.

Ron Beeler, the physical plant director for Fullerton College, gently led Martinez away by the shirt collar.

“He was very passive,” Beeler said. “He didn’t try to make a move.”

Tucked in the back of his trousers was a hunting knife, police said.

Martinez readily admitted to setting the fires. Asked by police whether he set the Fullerton fires, he said, “Yeah. That’s my job.”

The college employees who caught Martinez were struck not only by his meek demeanor, but also by his appearance.

“I’ve seen some street people and some down-and-outers, but this guy did not look like a transient,” said Tony Haynes, manager of the Hillcrest Glen Apartments, where a fire was set in the laundry room of the complex. “He didn’t say anything. He didn’t make a run for it. It’s almost like he wanted to be caught.”

Martinez’s arrest and statements to police resurrected an investigation that had all but petered out for a lack of fresh leads.

After going through the painstaking process of tracking down some 500 dead-end leads, investigators had lost hope of ever solving the case. The arrest, at least temporarily, has investigators believing they will be able to close the book on one of the costliest fires in state history.

“With all fires, unless you have the suspect early on, you can only hope that something comes up,” Runnestrand said.

Said Capizzi, “It’s common in so many investigations that you have to look for that break. That break occurred.”

Capizzi refused to discuss the type or extent of evidence implicating Martinez. He said investigators are still trying to piece together Martinez’s background, including his whereabouts before and after the fire.

Little is known about Martinez. In 1986, he was charged with burglary of an inhabited dwelling, exhibiting a deadly weapon in a threatening manner and giving false information to a police officer.

He pleaded guilty to the burglary charge and was sentenced to four years at a California Youth Authority detention facility, although he faced up to six years.

Just 18 years old at the time, Martinez had been in the United States only eight months, having come from his hometown of Tijuana, according to court documents filed in San Diego County. Martinez said at the time that his mother, Teresa Saille Higuera, lived in Tijuana.

In a financial declaration filed with the court, Martinez said he had $2 in cash to his name, was unemployed and had no assets.

As preliminary as the case is, the prospect of someone coming to justice for the fire prompted a combustible mixture of anger and relief from Laguna Beach residents and city officials. Despite its reputation as a tolerant and politically liberal enclave with many artists, residents and officials alike sounded off Friday.

“If this man is indeed guilty, I am greatly relieved that his days of starting fires are over,” said City Councilman Robert F. Gentry. “This is obviously a man with some mental illness and maybe there’s going to be a chance of some therapy. But my primary feeling is that he’s off the street, he can’t light his matches anymore and bring devastation to another community.”

“They ought to hang the bastard,” said Joyce Wippler, whose elderly parents lost their home in the fire. “It’s frustrating because no matter what they do to (Martinez), it will never replace the things that people lost.”

Times staff writers Rebecca Trounson, Lee Romney and Tony Perry contributed to this report. QUIET ARREST: Martinez was “like a lamb,” witnesses remember. A35

REWARD?: Man who detained suspect may have earned $50,000. A36