Following Three Bells Winery money trail helps explain why DA, FBI are interested in Estate

April 3, 2008


Angry investors wondering where their money went after funding Estate Financial of Paso Robles may be on the road to an eventual explanation.

Whether that translates into returns for those who have put money into Estate is yet to be learned. What is known is that millions of investor dollars have apparently been misappropriated, misspent, or misdirected, according to an investigation by

Now, law enforcement investigators from the San Luis Obispo County District Attorney’s office and the FBI have finally entered the picture with a “preliminary inquiry” into a growing litany of fraud allegations leveled by an ever-widening group of individuals. Joint interviews with investors are being conducted by the two agencies, according to some who have shared information.

Deputy District Attorney Steve VonDohlen confirmed the interviews: “We are talking to some of the plaintiffs, and the FBI,” he said this week. “It’s a preliminary inquiry. We are mindful that some of these complainants are well over 65 years of age. There may, or may not be, criminal wrongdoing here.”

Criminal or not, many of the financial transactions of Estate Financial principals Karen Guth, her son, Joshua Yaguda, and others with access to the lending company’s money, are interesting if confusing. As a result, the money trail often becomes tangled. (Information for this article was gathered from court documents, interviews with investors and lenders alike, and a variety of informed sources. Guth declined comment when contacted by telephone Thursday.)

Trying to answer questions about how money moved once it was invested with Guth, focused on the funding and construction of Three Bells Winery in Paso Robles. The probe discovered critical inconsistencies in many documents; identical names buried within a potpourri of limited liability companies; and questionable use of Estate Financial funds intended for development of the Paso Robles winery.

In 2006, Estate Financial President Guth and her vice president, Yaguda, under the name Third Press Partners LLC, and Al D’Amico, as Signature Homes LLC, became financially equal partners in Three Bells LLC. An operating agreement between the three holds Guth and Yaguda responsible for day-to-day management and record keeping of the winery project.

Three Bells LLC borrowed $3,665,720 from Estate Financial to construct the winery. Of that total amount, Estate Financial doled out approximately $1.4 million for actual building and other facility construction.

D’Amico allegedly snagged more than $1.2 million for his own personal use. Guth filed bankruptcy, claiming $6,199,929 in liabilities on the project and noting her failure, as an owner of the winery, to stay current on her loan payments.

“The question is, how you can foreclose on a property for $6 million when the construction loan was for $3.7 million, and the actual construction cost was only $1.5 million?” wondered one involved party who asked to remain unnamed.

Three Bells LLC filed a lawsuit June 18, 2007, against its non-managing partner, Signature Homes LLC; D’Amico individually; and D’Amico’s Town and Country Landscaping LLC, alleging fraud, intentional misrepresentation, conversion, breach of fiduciary duty, and imposition of constructive trust. The latter allegation suggested that D’Amico used his position as construction manager to rent equipment, purchase sod, and hire supervisors for property other than the winery.

“Yes, I am involved in both sides of the lawsuit, not as myself, but as separate entities. It’s a legal thing,” D’Amico said, responding to’s questions about why he would sue himself for fraud. He then added, “The case has been dismissed by mutual parties.”

A subsequent check of county records, however, shows the lawsuit has not been dismissed, and a case management conference is scheduled May 7 in San Luis Obispo County Superior Court.

D’Amico and Guth continue to work together on other projects despite their mutual, intertwining litigation. On August 1, Guth signed over six deeds of trusts to D’Amico valued at approximately $77,000 each.

“That was reimbursement for money she (Guth) owed me for out of pocket expenses,” D’Amico said.

D’Amico contends the loan for the winery project was never properly funded.

“What happened to the money is the million-dollar question,” D’Amico said. “She (Guth) foreclosed on herself. She will own the property in a month or two and I will be out of the picture.”

Guth allegedly sent a letter to a number of investors placing the blame for the demise of the winery investment on D’Amico’s shoulders.

“I lent the money to Estate Financial and she is responsible to live up to her promises,” said one winery investor. “The money lost to D’Amico has nothing to do with me.”

Information obtained by suggests Guth knew her hard money lending business was in trouble back in 2004, long before the downturn in the market. Investors and contractors claim projects, funded from as early as 2002, have not been finished due to alleged mismanagement of funds.

Even so, Guth continued at the time, and to this day, to seek investors, primarily seniors, with the lure of high interest on property secured loans — without disclosing the company’s financial woes. On her Web site, Guth touts interest payments of 11 to 13 percent, though most investors claim they are no longer receiving any interest payments.

“If she is running a business and knows she is having financial problems, I think she would have to tell people,” said investor John Childers. “A person robs a grocery store, they go to jail that day. Guth robs millions from the elderly and nothing happens. She is continuing to get money from the elderly.”

Hard money loans are based on the value of the underlying asset rather than borrowers’ credit rating. It works if the lender finances no more than 60 to 70 percent of the project, secures licensed appraisals, and makes payments as the work progresses. Numerous investors claim Guth failed to follow through on these promises.

“If she had followed these rules, she would not be in trouble,” Childers said. “It’s a good business, but if people get greedy, it goes to hell. She made the loan to value, not an appraisal by a licensed appraiser.”

A San Diego investment firm in 2004 failed to disclose information regarding investments, and used new investment capital to pay off existing investors, which resulted in the U.S. Securities and Exchange Commission filing an emergency action to halt the ongoing fraud. Authorities froze finances and set up a receivership.

(Editor’s note: Contact information should be included in comments if individuals want to share information in more detail.)

Where else to look for help:

Call Rene Esquarel, California Department of Real Estate, 559-445-5009, touch “O” when recording comes on, and ask operator to connect you.

(See initial article on Estate Financial and its investors.)

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Member Opinions:

By: Anonymous on 5/15/08

Dear Mr. Fredrickson:

I look forward to the upcoming investor meeting. As one of the fund investors, I would like to following questions answered before the meeting. Being invited to a "blind meeting" is, in my mind, going to be counter productive. We will have multiple opinions about what to do, very little guidance from professionals (other than yourself) an will leave without accomplishing anything. However with these questions already answered we can move more cohesively. So please don't tell us we'll find these answers at the meeting. I for one, want these answers now.

1. If we replace Karen and Joshua, who is going to take their place?

2. I hope you have someone, or a group of people, ready to go into Estate right after the meeting so Karen and Joshua don't have the opportunity to do more harm than they have already done.

2. Who is going to enforce the vote to remove them? There is no court order behind what we hope to accomplish, so how do you plan on handling this?

3. Who is going to protect/stop Karen and Joshua from rapping the fractionalized interest mortgage holders?

4. Is the new manager gong to be bonded and insured? They are not going to be responsible to any court, so we should have some insurance to back up their integrity or we could find ourselves in the same boat we are in now.

5. How is the new management going to deal with people who have funds in both the Mortgage Fund and are fractionalized interest holder? Or are the fractionalized mortgage holders going to be the stepchildren of this exercise?

By: Anonymous on 5/9/08

Joe Schacherer says:

I'm accumulating email addresses of just EFI investors.

I already have 25. I want to keep everyone in the loop as facts and options become available.

Please send your "real" email address to jschacherer at

I will not share your address with your approval.

Joe (805) 489-5791

By: Anonymous on 5/9/08

Interesting Legals in the Telegram Tribune. Notice of Trustees Sale on Loan B352-05 – B366-05 Signature Homes and Al D'Amico in the amount of $7,584,421.10 APN: 026-281-055/056 and Three Bells,B193-06 Karen Guth- Al D'Amico in the amount of $6,453,285.89 APN: 040-111-024. Open your eyes

By: Anonymous on 5/2/08

See new Estate Financial Article at

By: Anonymous on 4/30/08


There are many who don't have any tru in EFI. They either don't know about this site or just threw their hands up in desperation. The situation is serious, but still many don't want to except the fact. Its hard to deal with such a travesty specifically when the money happens to be ours.

You must keep posting not to have peoples interest fade away.

By: Anonymous on 4/29/08

Don't give up. Things are in the works. Keep demanding answers, keep demanding documents, keep demanding accounting, keep demanding copies of appraisals, keep asking "Where is the money?" Karen and Josh WILL go down. There may be some local lemmings that she can continue to fool but many more are finally coming to their senses. News is spreading throughout the state, investors are coming together and attorneys are preparing to take action. Hang in there. In the meantime, beware of all recommendations coming from Karen. IT IS NOT IN YOUR BEST INTEREST TO GIVE UP YOUR FIRST TRUST DEED IN EXCHANGE FOR FORMING AN LLC THAT SHE WILL SET UP AND BORROW AGAINST (WITH YOU RESPONSIBLE TO REPAY)AND THAT YOU WILL NOT BE ABLE TO GET OUT OF. SIGN NOTHING BEFORE RUNNING IT BY AN ATTORNEY (WHO WILL ADVISE AGAINST IT).

By: Anonymous on 4/29/08

Anonymous, I think you and I are are the only ones that are not taking the bait from EF. I talked to an investor the other day and they said Karen had everything under control. I asked him if he knew where his money was? The reply-NO. I asked him if he war receiving his monthly payments-the answer was NO. I don't call that under control. I don't know how much more you can tell these people what is happening. I guess they are looking for the light at the end of the tunnel. Unfortunately that light bulb will be burnt out. All of their properties are way over priced and are not going to sell. If everything is in order why arn't the houses completed? Where is the money? Sorry the money is gone. The only thing left is whatever equity is left in the property. Unfortunately it looks like EF has regained control of that and the ride will begin again.

By: Anonymous on 4/29/08


Let’s see how this scenario pans out. Loans became due that basically should be either foreclosed on or liquidated. That would mean true reflection of the values which in turn reduces the value of the mortgage fund. Since October 2007, Investors received no interest payments however Karen and Josh started taking management fees since than. According to Karen they have not taken their fees till than. I am skeptical of it although it might be true as they claim to have it rolled over into the funds to be collected at a later date.

That means, when any money comes into the funds, they will take their fees with compounded interest before investors see their money if lucky.

Refinancing some of the defaulted loans allows Karen to charge her usual fees upfront which is cash out of any remaining equity once the property is sold regardless of the price.

In case of a short sale (very likely) her upfront fee will be deducted before investors receive any proceeds. A legitimate way to milk any remaining assets. While on the market, she can still accrue her management fee compounded and that will be paid out of the proceeds as well. A seemingly legitimate way to bolster their own pockets. This has been the pattern for years with EFI. What Karen is hoping for many investors take her assurances that she is doing everything for an orderly liquidation of assets. As long as she has people stand up for her claiming to do everything she can, blaming the situation on current market forces and mortgage meltdown, she seems to be able to work the process.

No one should be fooled by her. This is just an other example of a criminal pattern seemingly legitimate. She failed in her fiduciary responsibility both to investors and borrowers.

Her former husband stated under oath that she was “kiting” since before 2003. According to Charlie, soon after their separation she increased the loans by 50%. She claimed to have done it on her own and of her marketing skill. Those loans were phantom at that time since many were created on paper without the money being in the account. It will be easy to match the funds (if there ever was) for the new loans vs. newly funded loans. Unfortunately, it will take time and she knows it well, by than the money will be gone along with her. Likely Josh will have to ht the road also for being a co-conspirator in those affairs.

God luck to all of us

By: Anonymous on 4/28/08

There is something fishy in the mudhole. It appears that NEW loans were put in place for the Oak Grove homes on 1-16-08. The laons appear to be for the same amount as before. Something may be going on here. The terms of the original notes may have come due and payable. If that is the case and the notes were renewed one would aasume that the investors approved this extension. If this is what happened the investors missed out on foreclosing on the properties and were possibly duped by EF AGAIN. You people really need to get a grip on what is going on. Check your properties under the current listing agreements and you will find that the properties are way over priced in today's market. This looks like a stall tactic created by EF.

By: Anonymous on 4/28/08

Mike says:

Well now Karen and DOYA/EFI were very busy last week 4-17-08 dozens of filings were done on property. According to the County Recorder Julie many filings were done that day. There goes the money

April 21st, 2008 at 6:16 AM

Kelly says:

Yes, they were very busy when i went to check on my deeds i learned the county recorder clerk Julie Rodewald has officially denied all the public access to check the records citing security and privacy reasons. So I tried on line at home and the county web site will no longer allow anyone to access the information. Again citing personal privacy not wanting the upset investors to know where people live or what deeds have changed she is no longer allowing full public access. So something is really wrong here.

By: Anonymous on 4/27/08

There will be a hearing in SLO Superior Court on Tuesday, April 29, at 8:30 a.m.,courtroom D4 for a case Karen is involved in with her old husband, Charlie Applebaum. It might be interesting to attend and hear what the old gal has to say for herself and to glean information that may be helpful to us in filings of our own. You can check it out for yourself at:

under "calendar", select "civil & family law by name" then scroll down to Applebaum and then scroll down to Guth. Hope to see you all there!

April 27th, 2008 at 8:18 AM

By: Anonymous on 4/27/08

Hey all. I told you sometime ago about a DRE pdf that outlines TD investing. Its a really good resource, see And particularly check out page 14 about prohibited 'pool' investments.

Are you all going to sit around or fight back?

By: Anonymous on 4/24/08

Investors beware. A large number of the Fetyko projects have just been relisted in the real estate mls at reduced prices.

Investors should beware as several of these houses are listed at a price that will not cover the loan amount, sales costs and possibly back taxes. Several of these homes are not completed and the listings do not state whether the homes are to be completed or not. As is, it appears that if any of these homes sale, since most of them are listed way above the current market value, that most of the sales will fall under the short sale category. This could be a delay tactic on the part of EF to keep everybody happy for awhile. This doesn't answer where did all of the money go?

By: Anonymous on 4/24/08


Time is running out. I know there is alot of information not being disclosed. At this point anything you know might help. Please share what you know before we are in the hands of a receiver.

If you dont want to post sent info to

By: Anonymous on 4/24/08

I meant Scratch golfer.

By: Anonymous on 4/24/08

Golf scratcher – If you have information you'd like to share, please write me at Every little bit of info helps. Thanks!

By: Anonymous on 4/23/08

Karen: I have played golf with you. I thought I knew you so I have ignored these blogs and newspaper stories. Then I discovered something that made me realize what people are saying on these blogs and in the newspaper are true. Thanks Karen but I'll pass on golf with you in the future. Doesn't suit my conscious.

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