Apparently I rented a house from someone who doesn't own the house I'm in and the real owners called the cops and said that there were squat...

Question

Apparently I rented a house from someone who doesn't own the house I'm in and the real owners called the cops and said that there were squatters in their house. The cops threatened to arrest me if i didn't leave. Do i have to leave and lose out on the money I've invested

Answer

Yes, unless there are some very unusual facts. If this was done without the real owners' knowledge, then they are victims of the same scammer who victimized you. It would not be just to make the owners let you stay when they never gave you permission to move in. Your position would be stronger if they knew this was going on and let it happen -- or even if they found out about it after the fact but failed to take reasonable steps to protect their rights.

Reporting you as squatters is pretty much what they had to do. It would be better if they asked you to move out on your own first. Perhaps that's what they did. But the law doesn't require it. So if they didn't help create the problem, they were allowed to do what you describe.

You do have rights against the person who supposedly rented the house to you. Most people who do this sort of thing either don't have enough money to make them worth suing or have hidden it so well that you might never track it down. But renting you a house she didn't own likely involved one or more serious crimes as well. You should complain about her to your local police and/or prosecutors.

Good luck.