Quiescent county Web site stirring suspicions

April 4, 2008

By KAREN VELIE and DANIEL BLACKBURN

A Web site maintained by San Luis Obispo County’s Clerk-Recorder’s office – which provides property deed transaction data and other public information and is routinely updated weekly — has been dormant for 36 days.

The site’s lack of relevance quickly became a cause of concern for some investors who have placed funds with a troubled Paso Robles hard money lender, Estate Financial.

Clerk-Recorder Julie Rodewald attributed the site’s inactivity to a missing technician and promised a quick fix. But the site had not yet restored to a current status by midday Thursday.

The Web site contains general information on the Clerk-Recorder’s office as well as a searchable database to allow public access to official county records.

The situation raises a question of conflict of interest, according to several investors who talked to a reporter. Roderick Rodewald, the clerk-recorder’s husband, is a San Luis Obispo attorney whose clients include Estate Financial and its president, Karen Guth.

UncoveredSLO.com posted an article March 14 reporting the apparent unraveling of Estate Financial and actions and practices of its two top officers, Guth and her son, Joshua Yaguda . That article detailed the alleged loss of millions of dollars by a large number of investors, many of whom said they had been hindered in their efforts to contact others with funds in Guth’s hands.

Three days after that article appeared, several hundred EF investors expressing deep concern and growing anger met at San Luis Bay Inn to exchange stories, loan data, phone numbers and action plans.

“At a time when Estate Financial is not forthcoming with investor data, the Clerk-Recorder’s office is one of the few options investors have,” said one person who has been regularly monitoring the Web site’s lack of progress, wrote in an e-mail to UncoveredSLO.com.

Numerous individuals allege that Estate Financial has sold properties and failed to repay investors. Consequently, many investors rely on the Clerk-Recorder’s Web site to follow activity or changes involving their properties. The site provides information showing if any reconveyance (loan repayments) have occurred; or if Estate Financial is foreclosing on specific properties.

Investors might be unaware that the site has been outdated during the month-plus dormancy, and as a result may be relying on stagnant information during a period when numerous Estate Financial transactions might be occurring.

Julie Rodewald said she has been out of the office on personal matters and has not been able to facilitate updates.

“Our system is not a county standard system,” she told UncoveredSLO.com, “and our IT guy is out. The (county’s Information Technology Department) doesn’t manage our AS400 (computer program). That we are trying to deny access to documents because of Estate Financial is absolutely not true.”

A source in Information Technology said any one of more than two dozen county technicians could have easily and quickly handled the usual updating. Other computer experts contacted by UncoveredSLO.com said keeping the county Clerk-Recorder’s site current is not a complex undertaking, suggesting the site’s update is virtually a push-button exercise.

Julie Rodewald said this week she would have nothing to gain from trying to affect the Web site’s current status.

“This begs the question, can he or I do anything?” Julie Rodewald said when asked if her husband’s work for Estate Financial has created at least the impression of a conflict of interest. “Our personal lives are separate from our professional lives. All recordings are public record.”

Roderick Rodewald, too, scoffed at the suggestion of a conflict.

“How in the world could I assist Karen Guth through my wife’s office?” he wondered recently. He also noted that he and his wife have “heard the allegations” but insisted no conflict exists. He disavowed any involvement with Estate Financial other than providing legal counsel.

One of Roderick Rodewald’s counsel chores was to chastise Myron “Mike” Knecht, who placed an advertisement in local periodicals seeking to locate and organize other EF investors. The lawyer wrote in a Sept. 2007 letter and e-mail to Knecht that his ads were having “an adverse affect on our clients’ business.”

Roderick Rodewald added, “Your advertisements have a chilling effect on both further investments in the mortgage fund and on the fractional loan investments, with corresponding harm to your fellow investors and my clients’ business. I would urge you to discuss this with your attorney… as such statements could expose you to significant legal liability.”

Knecht said he checked with his own attorney.

“By Karen Guth’s own admission, ‘investment capital will not be returned at any time in the foreseeable future,’ (so) my statement was not actionable. Something about the truth being a defense,” Knecht wrote in a reply to EF’s lawyer.

Some EF investors have also questioned an apparent new practice at the Clerk-Recorder’s requiring names and addresses of people seeking deed information.

“Sometimes we may ask for a person to sign, sometimes not,” said Julie Rodewald. “There’s a form to fill out. You don’t have to sign it. We are not keeping tabs on people who come into the office. Every little thing becomes a conspiracy.”

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By: Anonymous on 4/20/08

Quote Charlie Applebaum 12/2/2003 in a sworn statement in court in SLO County. Go to the court and see it for yourself.


"The real reason Estate Financial has had to transfer "bad loans" to Republic for workout is that the Respondent (Karen Guth) decided to advance certain funds which were invested by investors on one project, to the builder on another project. This action is clearly inappropriate….."

She has been committing this illegal act of commingling fund since at least 2003, so says her ex-life partner.

By: Anonymous on 4/20/08

http://www.estatefinancial.com

Go to that website and see for yourself the lies and fraud that started all of this.

1. Interest stays constant . . . eliminating fluctuations due to changing economic conditions.

2. Principal value of investment does not vary.

3. HIGH LIQUIDITY

4. MONTHLY INCOME

Four bold lies.

What else do we need to know!

That's what my complaint to the Department of Corporations says. What does your's say?

By: Anonymous on 4/19/08

Go to the SanLuisObispo.com and check "local news" and read readers comments at the bottom of the article on "Estate Financial officials try to calm uneasy investors." Post your comments there too. More people need to know what she's doing.

By: Anonymous on 4/19/08

Jill,

check your e-mail.

By: Anonymous on 4/19/08

To 'In the Dark' – Please email me at fullyfunded93401@yahoo.com

By: Anonymous on 4/19/08

To From Encinitas


It is a shame that we are forced to try to find information that should be readily available from Karen but can be obtained only by putting her on the spot in front of 300+ investors.


Are you the borrower WLF Ventures (for a custom deluxe house, 3542 Jasmine Crest, Encinitas, in Olivenhain – Loan #B311-04) and Twin Oaks Estate, 1071 Bates View Court, San Marcos(B355-03)? If you are, can you please tell us the status of those two projects.

1)Can they be sold "as is" and if so, for how much.

2)Is Karen foreclosing on them? If so, when is the date of foreclosure?

3)Do you know if there are any liens against the properties?

4) Do you know if there are any lawsuits involved with these properties?

5) Are you interested or able to obtain funding to buy out investors?

6) Are the WLF Ventures/Olivenhain house and the San Marcos house stand alone projects or are they part of a subdivision, and if so, how many houses are in the subdivision and what state of completion are they in and is Karen involved in funding them?


If you have the information, thanks.


By: Anonymous on 4/20/08

Quote Charlie Applebaum 12/2/2003 in a sworn statement in court in SLO County. Go to the court and see it for yourself.


"The real reason Estate Financial has had to transfer "bad loans" to Republic for workout is that the Respondent (Karen Guth) decided to advance certain funds which were invested by investors on one project, to the builder on another project. This action is clearly inappropriate….."

She has been committing this illegal act of commingling fund since at least 2003, so says her ex-life partner.

By: Anonymous on 4/20/08

http://www.estatefinancial.com

Go to that website and see for yourself the lies and fraud that started all of this.

1. Interest stays constant . . . eliminating fluctuations due to changing economic conditions.

2. Principal value of investment does not vary.

3. HIGH LIQUIDITY

4. MONTHLY INCOME

Four bold lies.

What else do we need to know!

That's what my complaint to the Department of Corporations says. What does your's say?

By: Anonymous on 4/19/08

Go to the SanLuisObispo.com and check "local news" and read readers comments at the bottom of the article on "Estate Financial officials try to calm uneasy investors." Post your comments there too. More people need to know what she's doing.

By: Anonymous on 4/19/08

Jill,

check your e-mail.

By: Anonymous on 4/19/08

To 'In the Dark' – Please email me at fullyfunded93401@yahoo.com

By: Anonymous on 4/19/08

To From Encinitas


It is a shame that we are forced to try to find information that should be readily available from Karen but can be obtained only by putting her on the spot in front of 300+ investors.


Are you the borrower WLF Ventures (for a custom deluxe house, 3542 Jasmine Crest, Encinitas, in Olivenhain – Loan #B311-04) and Twin Oaks Estate, 1071 Bates View Court, San Marcos(B355-03)? If you are, can you please tell us the status of those two projects.

1)Can they be sold "as is" and if so, for how much.

2)Is Karen foreclosing on them? If so, when is the date of foreclosure?

3)Do you know if there are any liens against the properties?

4) Do you know if there are any lawsuits involved with these properties?

5) Are you interested or able to obtain funding to buy out investors?

6) Are the WLF Ventures/Olivenhain house and the San Marcos house stand alone projects or are they part of a subdivision, and if so, how many houses are in the subdivision and what state of completion are they in and is Karen involved in funding them?


If you have the information, thanks.


By: Anonymous on 4/19/08

To FROM ENCINITAS

You didn't answer all of my questions. I think people want to know the details of your problems with EFI, if you really had any?

By: Anonymous on 4/19/08

Curious George;


D

E

Unfortunatley, I used much of myown funds also, no fees to me at all. Ialso did my own plans. Wish bought a yacht on themoney so I could besailing today in the Carabiens or the mediterians.

Oh well. 947d7

By: Anonymous on 4/19/08

To FROM ENCINITAS – You say "I had several competing offers and a signed contract. Unable to finish it, got sued all thanks to Estate Financial."


Why were you unable to finish it?


A. Did you not work fast enough so you screwed the investors which created a foreclosure?

B. Did you take such large fees for yourself that you ran out of money?

C. Did you buy a yacht?

D. Did you have trouble receiving money from Estate Financial?

E. If you had trouble obtaining money from EFI than were you not able to finish your project because of their lack of payments to you or your workers?

F. Did Karen and Joshua tell you that EFI ran out of money?


How much money was set aside for you from EFI (investor's money) for this ruined project? Were you promised all the money that was set aside? Most importantly, how much of the money did you really get? Please answer each question. I'm curious.

By: Anonymous on 4/19/08

Just to clarify the procedures to get money from the construction funds. At least us moratls had to follow the rules. Submit voucher with invoice payable directly to subs or suppliers. If inspection was made by Estate it would take longer, so often I e-mailed phtos of progress. Often, I paid subs suppliers from my own funds to keep things going than submited receipts invoices to Estate for reimbursements. As you can see, clearly us mortals not within the circle of confidential members had to follow the rules, still got burned. Hard to complete a job when payments don't arrive often for six months or not at all.

By: Anonymous on 4/19/08

According to Article VI in the Operating Agreement of the Fund, paragraph 6.01 states "The Manager shall cause the Company to keep the following books and records, which shall be maintained at the Company's principal place of business and shall be available for inspection and copying by….the Members….during reasonable business hours:


Then there is a list of titled (a)through (g)


(g) "The company's books and records as they relate to the internal affairs of the Company for at least the current and past four Fiscal years."


So, there it is in black and white the right of the Fund investors to see the books. A group of you needs to get in there with your hired CPA to inspect. A forensic CPA preferred. Ask to see specific projects then see how the money was handled. You have the right! If she doesn't give it to you, then she's hiding something! Period! Report her denial of obtaining book records to the authorities.


By: Anonymous on 4/19/08

I am still smarting from Thursday April 17th meeting. As I stated when I tried to read a synopsis of what happened to me, I couldn’t debate there can’t do it here either. I had several loans with Estate and everything was well at first. Even after my own substantial infusion things just got worst. The luxury home Karen referred to should have been completed and sold in 2004. I had several competing offers and a signed contract. Unable to finish it, got sued all thanks to Estate Financial. Other projects with a substantial loan from Estate only have permit (expired) and forms set. Two thirds of the money never was available.

The way I see things with Estate, they have set up several LLC partnering with number of different individuals and entities while retaining the right to manage them. That way Karen could set the loan amount with no questions and interference from anyone which allowed her to siphon off large amounts of funds without raising red flags. Now they are all under with nothing to show for. As long as interest payments were paid to investors, no one cared. We borrowers just wanted to make things work and move on. We were trapped without realizing the depth of the situation.

Karen’s performance was brilliant and Josh’s showed his arrogance with no class. Investors were still promised nothing but future cooperation. I was dismayed by the number of investor’s still having faith in Karen and her son.

I am more in disbelief that many still think that the situation only a function of current economic downturn and lack of available mortgage.

All this could have been a very profitable business for everyone if Karen and Josh ran their business as promised with competence.

Claim of 80% still in the fund is illusive. Investors would not have 80% money left if things were run well. If there is 20% left to pay out at the end, I maybe over estimating it.

Karen had supporters clapping for her for now until they will be awakening also. After that meeting, I am able to accept the fact that I was just as hoodwinked like many investors at the meeting.

I am just incredulous of their claim that they are taking management fees only in the last six months. At he same time, investors received letters informing them that their interest payments being suspended. I am still curious like everyone else; WHERE IS THE MONEY?

By: Anonymous on 4/19/08

'Insider' suggest: "Hire an independent CPA to do a quick review of all accounts to determine how much money exists in each loan account." That is a great idea! What are the chances of Karen allowing that to happen? Slim to none. No, wait. NONE!


If Karen won't allow that to happen, maybe those who blindly support Karen might finally begin to wonder . . . 'WHY WON'T SHE?'

By: Anonymous on 4/19/08

You all should be smart enough by now to know that each and every one of those loan accounts as well as the fund has some kind of balance. As long as Karen can keep you off balance Estate can continue to raid each and every one of those accounts under the guise of management fees. First the builders stopped recieving thier draws, then the investors stopped recieving thier interest payments. I haven't heard anything about Estate not getting thier draws. This is ass backwards. When things started going south they should have stopped taking fees and next the investors should have stopped recieving interest so the constuction could have been completed and finally the the construction would have to be halted. At least you would have been made aware early in the process of system failure and the construction would be complete or closer. If Karen really wants to make things right request she turn the fund managment over to a board of directors made up of the larger investors in the fund, say 10. Karen and Josh could be on the board. Hire an independent CPA to do a quick review of all accounts to determine how much money exists in each loan account. The ongoing question seems to be where did the money go. I am suggesting the more important questions is how much is left, where is it going right now, and where are we going to get the money needed to finish the things that need to be finised to liquidate the properties. I guarentee you no one, no bank, and no new investors are going to loan anything on this mess unless you get control of it and leaving Karen in total charge at this point shows to everyone you don't have control.


By: Anonymous on 4/18/08

Mike: You are a very smart and honorable man. Thank you for allowing all of us to learn from your willingness to share your insight.

It was nice meeting you Thursday.

Best, Ron


By: Anonymous on 4/18/08

It's the oldest trick in the book and taken right out of the con man's playbook:


1.) Take evasive action.

2.) Go on the offensive.

3.) Deny, deny, deny.

4.) When cornered, act concerned, and then leave.

5.) Repeat.


Karen and Josh executed play number yesterday. Evidently it worked as they were given a two week reprieve. Two weeks from now they will be back to executing play number one.

By: Anonymous on 4/18/08

To Whatever,

You have convinced me that I can no longer tell fact from fiction. They are equally ridiculous.

We have all heard so many far fetched things from EFI we think anything is possible.

Or at least we are expected to believe almost anything.

At a second read of your post it was really quite funny. Glad you can still have such a good sence of humor.

By: Anonymous on 4/18/08

to: 444horses


I am an investor in B519-05–were you at the meeting on Thur? How do we contact each other?

By: Anonymous on 4/18/08

I am an investor in B519-05–were you at the meeting on Thur? How do we contact each other?

By: Anonymous on 4/18/08

To Mike Knecht:


Thank you Mike, for your sophisticated analogy, within your commentary. At the meeting, I made similar observations while watching and listening to the mother and son speak their wisdom. It was interesting to observe their body language. I agree with you 1000%. You are so articulate in what you just described. I admire your courage to put your name out there, and seeing how honest you have been. I feel your integrity, whenever I read your postings on this blog. It was truly an honor to meet you yesterday. Please keep up the great job educating and informing us. You have been very unselfish sharing your knowledge. Please, Please, Please…..when you have anything noteworthy to say, we are all ears, and can learn a wealth of information from you. Thank you, Thank you….. Thank God for you! You are the wind beneath our wings!

By: Anonymous on 4/18/08

To Annie:


Yes, indeed, it was a joke! Sorry if I confused you, Annie. Please forgive me


By: Anonymous on 4/18/08

After the April 17 meeting, I found my admiration for Karen Guth reaching a new high. Not only did she have the courage to show up to the meeting with investors but she managed to smoothly denigrate everyone who had a problem getting facts from Estate Financial. If you had difficulty getting financial details out of Estate Financial, Karen coolly implied you were the one with the problem. One investor took up too much of her time with her questions. One investor needed money to pay taxes (much of the property Karen is a partner on is delinquent on taxes so maybe taxes aren’t that big of a deal). Another customer had become so frustrated by a lack of response from Estate Financial that the police had to be called to remove him. Karen managed to sound like a grandmother who was discussing the short comings of the nephews and nieces she didn’t like. Her verbal condescension and belittlement was delivered in a perfect tone of pseudo sweetness.


Joshua seemed nervous and tense. He had a little trouble completing his sentences but I admired him as well. He had the cojones to stand there and say that monies received from the sale of property in the mortgage fund would not be returned to investors but rather, after the appropriate fees were deducted by Estate Financial, would be automatically reinvested with the mortgage fund. While his mother was the personification of ice at least Joshua had the decency to appear uneasy in telling people they weren’t going to get any money at the present time from the sale of their investment property.


Joshua and Karen acted like this was their first inkling that there was a problem with investors getting any information on the fund members or property. They also seemed genuinely relieved to learn that hiring more people might be a solution. If there is/was a hundred and seventy million in the mortgage fund and the fund is now valued at eighty percent of the money invested at the beginning, and one percent fee is being deducted from investor funds every month? That comes to roughly one million six hundred thousand dollars a month (nineteen million a year) that Karen and Joshua take out of the mortgage fund in management fees every month. If I was taking down a million six every month I could probably spare some of that to hire some people to help out.

PS If I have the figures wrong Karen is welcome to tell investors exactly how much money Estate Financial takes from investor funds every month. No one would mind.

By: Anonymous on 4/18/08

To Whatever,

I have to ask if your message was a joke.

You indicated that karen was repaying Ron Cooper for the use of the meeting space yesterday.

Don't people usually pay for things with cash of a check.

If EFI had to pay Ron with a promissary note that must mean that EFI does not even have $1000. cash available to pay it's debt.

Why on earth would offer to pay someone in front of 250 people and then give them a NOTE?

By the way, Ron was not given anything not even a note.

So now we know Karen you are not only over worked but you are also broke.

Join the club!!

By: Anonymous on 4/18/08

Karen and Josh did not tell us anything new at the meeting yesterday except to tell us that they did not have the staff to provide professional, polite, and timely investor communications. I applaud them for finally admitting that, and for promising to immediately resolve that problem. It only took a meeting like yesterday to get them to agree to do that. And that fact says volumns about who Karen and Josh are.


They also admitted that they did not know where the money for the "fully funded" loans went for the projects where there is no construction. I hear people blaming Ron Cooper for that. Folks, Ron Cooper wasn't managing our money. We did not get to select Ron Cooper as the receipant of our money. Karen did that all by herself. If it was a poor decision, and I'm not convinced it was, it was Karen's decision. If the money is "fully funded" but the project itself doesn't reflect that, then the blame is squarely on Karen and Josh.


Many questions were left unanswwered yesterday, but then we only had two hours. Nevertheless here is a question for all of you to ponder. If, for the past 18 months EF did not have the ability (for whatever reason) to respond to our investor inquiries then how in the world is Estate Financial going to manage the properties they have foreclosed upon.


Investors like me need to take control of our own money, and we need to do it now.


Who is going to lead us there?

Or, do we wait for a governmental agency to control our money. Surely if that happens we lose everything. And fellow investors, the goverment is closely looking at EF right now!


With the list EF is going to give us, I urge you to contact your fellow investors and develop a plan.


By: Anonymous on 4/18/08

What a snow job!! Karen and Josh took two hours of our lives to convince us that all is well, that a receivership would cost us money (more than they are charging in management fees??? I think not!!) and that any action taken against them would be counter productive.


I harken back to the 11/28/08 letter that Josh issued to the Fund investors. He reported that $40M in loans were performing. Everything else in the $172M fund was in forebearance, some stage of foreclosure or had been taken back by EFI and was awaiting sale or completion. That's 77% of $172M that's not performing!! That's not managing a fund. It's courting imminent disaster!!


Karen announced that EFI had started taking a management fee five months ago. How much is the monthly management fee??? Was that about the time she quit making loans (so wasn't getting a loan origination fee) and so had to supplement her income to support her vast real estate holdings?? Has anyone noticed how many of her "personal llc's" have participated in failed, extremely expensive ventures??


Karen and Josh — here's what we want:


1. Total transparency.

2. Each investor hereby demands a complete list of fellow investors on each project.

3. Each investor hereby demands a complete accounting of all funds expended for each project. (Should be able to accomplish that with the stroke of a computer key)

4. The investors hereby demand a complete accounting of all fees collected by EFI, Guth, et al., in all capacities for the past five years.


Folks, we didn't get answers yesterday. We got bamboozled. That's not good enough!! We were told that a receiver would be too expensive. More expensive that Karen and Josh? I think not!! The only winners in this game are the EFI principals who have looted the fund to finance their personal acquisitions and hobbies.


BTW, many of us first DOT holders who received an assignment of our fractional interest in the TD are about to be foreclosed out by EFI. Are we getting it yet, folks!!??


If you don't want a receiver to safe guard your investment, how about demanding the EFI assign its interest in certain projects to the investors to manage themselves. The houses in Bella Vista estate have been standing half completed for almost two years with weeds growing out the windows and they are listed way above market value. The market was stronger two years ago than it is now and the future is not looking real good. Let's get our hands on them, sell them to a contractor who has the financial ability to complete them and cut our losses!!


Karen and Jose — to avoid receivership, are you willing to sign the projects over to the investors?? Are you willing to set up and provide us with an accounting of where our investment has been expended.


Or do we have to take legal action to force you to give us the information?

By: Anonymous on 4/18/08

To Anon:


An affirmative NO!!

By: Anonymous on 4/18/08

Is that you, Josh?

By: Anonymous on 4/18/08

Jill:


Regarding your latest inquiry…..Why don't you get a grip and ask the principles, instead of us, the players? Yesterday, Karen and Josh were very accommodating when people wanted answers. You should have stood up, grabbed the microphone (like the rest of them were), announced your true identity, and asked Karen to tell the truth, the whole truth, and nothing but the truth, (so please please help her, God!) regarding her offer to pay Ron Cooper for the auditorium rental. You can call or email Estate Financial and ask an employee to provide you with a copy of the recorded promissory note Karen Guth gave to Ron Cooper (for covering the costs of the meeting place and the chairs we sat on). Karen and Josh also made it quite clear that they would do their best to be available by phone/email to answer investor questions and concerns. You should pose this question to them. So there you have it, Ms. Jill…..(we know who you really are!)


By: Anonymous on 4/18/08

Karen assured investors of payments in six months for $.80 on a dollar. Any one believes her after all previous asurances, must on something she is on. The money is gone never to return.

By: Anonymous on 4/18/08

I'd like to know did Karen Guth really pay Ron Cooper for the auditorium?

By: Anonymous on 4/18/08

Scorekeeper,


Investors: -10

Builders -0

EFI 10


Karen Guth done a great job providing "KOOLAID"

At the meeting,many investors kept taking it. Congratulation and just hope the money is there. Its gone. When the realization finally sinks in,

it will not taste good.

By: Anonymous on 4/18/08

I'd like to add, from what I've heard, it appears if a builder PARTNERED with Karen Guth (on one of her many, many differently named LLCs) those projects tended to get the checks. I heard some of these projects were funded in it's entirety, not in phases. Also, the manager of these LLCs would be entitled to their management fees. I wonder what Karen's management fees where for all of 'HER' LLCs? Or even just one? Of course, this money goes directly to Karen Guth herself, not the investors. Now there's a question! Of course, this money came from the investor's capital. Oops, there's even more of the investor's money going bye-bye. Oh, and then guess what? she forecloses on herself because her projects fail and now she gets fees for foreclosing – all again going to Karen Guth, and again coming from the investor's capital.


Oh, and that Loan to Value Ratio (LTV), turns out they actually appraised many of those properties themselves. Huh, gee, I sure hope they were right? What if they inflated it – all by accident, of course. That would even leave the investors worse off. So when you heard the market has declined 20-30% and your LTV should have been, say 75%, don't you think you should be getting back more than 50 cents on the dollar? Some of that decline in the market should have been absorbed in the LTV. Well, 'whatever' as they say. Most of us learned this simple math in junior high school. Maybe you should ask EFI a few more questions. I think so.


I don't want to leave out Joshua's name because he was in many of these LLC's too and has his role at EFI.


Isn't this a FUN game?


Again, this is my understanding of it.


By: Anonymous on 4/18/08

I was at the meeting today and there is a bigger question that needs to be asked here. Those builders sure looked like the bad guys, don't they? From what I have gathered at the meeting makes me want to throw some thoughts out. Feel free to criticize.


So Ron Copper purchases a loan from Karen Guth's company. As we all know, he has to PAY for this loan. I'm just guessing his loan origination fees are 4% (just guessing). So this would mean Ron had to shell out $840,000 dollars before he bought his rights to the 21 million dollars. This $840,000 is Karen's money, not the investors, it's all Karens to do as she pleases. I'd also imagine Ron may have had to put up some collateral – I'm assuming. In return for his $840,000.00 payment he was guaranteed access to that 21 million dollars, all of which should have been put in a seperate account allocated for him. Now keep in mind, he doesn't get all that money in one chunk, he only gets it dished out when phases are completed. Ron admitted at the meeting he only got around 3.5 million of that money, which he used toward his project. Generally, a company like EFI has two weeks to pay out that money upon proof of completion. Then Ron moves to the next phase and I'm sure Ron's in a hurry to get the job done – wouldn't you be? I read else where that Ron had a hard time getting access to the loan he bought. Instead of two weeks, months would go by. Where do you think this leaves Ron? I'd say in a tight spot. If EFI makes it difficult for him to receive his money, then how is he going to pay for the subcontractors? I'd imagine he was loosing his help. Workers are going to work where they get paid.


Getting back to the money. Karen Guth accumulates the investors money to the tune of 21 million and supposedly puts it in this segregated account for Ron. Either this money is from individual first trust deed holders or the Mortgage Fund or both. I'm not sure who funded his project. But the fact is there should be 21 million dollars sitting in an account in the name of these investors. Ron only got 3.5 million. Karen collected 21 million. That leaves 17.5 million dollars unaccounted for? So, the big question is, where is the investors money? REALLY, don't believe anything different, this money belongs to the investors and EFI should be able to tell you where it is. Ron never received 21 million. So, again, the question needs to be asked "EFI where is the money?" REALLY, WHERE IS IT? Ron certainly doesn't have it.


My personal feelings are, in front of audience, Karen dodged the question (quite well I must add) by stating she can't discuss Ron's and EFI's issue because they are litigation. And Ron, I don't feel explained his situation very well, leaving the new crowd at the second meeting still wondering what was really going on. I was more than shocked at the amount of people attacking the builders. Obviously, these people DON'T GET IT! There's 17.5 million dollars unaccounted for!!!! EFI, should have that money! So again "EFI, where is that money? Where is it?" Karen, why aren't you returning the remainder to the investors (put simply)? Oh, keep in mind Karen gets the foreclosure fees, not you the investors, just Karen.


There's a chance this company may be taken over by the state, not because of a few complaining whiners but because this is just one of many, many, many examples of the gross mismanagement of the money. And I'm being nice when I say 'mismanagement.' It appears there is much more going on here and it looks frightening. So if you would like to believe Karen Guth, go ahead, do so. But I feel there is a good chance that money is long gone in places I won't even discuss because I think some of these readers need time to digest all this. Good luck to you all! And, I do hope some of you feel a little more stupid about applauding for Karen Guth at the Thursday meeting.


Again, all my opinion