INSIDE EFI: An Investors Nightmare

May 1, 2008

Part 1: Divorce sparks nasty public war


(Editors’ note: This is the first in a series examining the high-rolling, high-interest, high-risk, hard money business, and a close-up look at the primary players in one multi-million-dollar Paso Robles firm that may be headed for big trouble.)

The downward spiral in which Paso Robles’ Estate Financial Inc. (EFI) now finds itself probably started with a kiss.

Escalating personal problems between EFI’s two co-owners, Karen Guth and Charles Applebaum, eventually caused their 2004 divorce and created an environment that fostered the brokerage firm’s escalating fiscal morass.

Now the hard-money lender “is sinking fast,” according to one, “with only 20 percent of the mortgage funds invested in current loans.”

Last week, the California Department of Corporations suspended EFI’s permit to sell real estate investments while the state agency investigates dozens of complaints from EFI investors worried about their money. A series of meetings in the county over the past few weeks have attracted hundreds of investors seeking information from Guth, and ways of recovering money they have invested with EFI. The company has stopped making interest payments to many investors, and Guth has been reluctant to answer queries from investors regarding the whereabouts of their money.

Applebaum, who helped purchase the financial company in 1994 but is no longer directly involved with the firm, made those and other assertions over a four-year period during which the couple first divorced peacefully, then launched a bitter exchange through their lawyers and filed a string of legal maneuvers in disputes over distribution of the couple’s personal assets. An acrimonious confrontation centering on an alleged extramarital relationship fueled the protracted property dispute that even today continues to wind through San Luis Obispo County courts.

Guth unsuccessfully attempted to have all court proceedings relevant to the divorce kept confidential, but abandoned that effort when Applebaum dissented. That opened the door for public examination of EFI’s business operations and the practices of Guth and her son and subsequent co-partner, Joshua Yaguda. Applebaum has blamed the pair for EFI’s current critical condition.

Applbaum’s sworn assertions suggest that Estate Financial’s slide began when he and Guth separated in the aftermath of heated allegations.

The former EFI partner called into question specific financial moves made by Guth on behalf of EFI, some of which he termed “very questionable.” Appelbaum, who no longer lives in California, detailed private spending habits of Guth, as well as her distribution of investors’ funds in court records obtained by In those court documents, he makes a number of predictions that many of EFI’s thousands of investors may find disturbing.

In a “Memorandum of Points and Authorities” filed with the court in 2004, the EFI principals described their business in this way:

“EFI is a licensed and regulated brokerage business. The company seeks out investors who are willing to deposit money with them. Then the company seeks out real estate builders and developers in need of money to operate their projects. The company examines and qualifies the builder and developer customers. It examines the proposed building and development projects. It then makes a decision as to which builders and developers and to which building projects it will recommend to EFI investors. EFI then handles all loan arrangements, include but not limited to loan escrows; establishment of loan-to-value ratios; review of construction plans; establishment of disbursement schedules; monitoring of the construction budget; supervision of construction; and handling of any contingencies that may occur as the projects proceed.”

Most of those particular duties, Applebaum would later assert, were handled by him; he was the one with the proper training, licenses, and expertise to oversee the construction into which investors were putting their money.

The memorandum continued:

“On the other side of the business, EFI has an active program of soliciting prospective investors by marketing and advertising its services. It interviews and qualifies prospective investors and then collects investor monies, deposits and accounts for the money, decides which investors will place their money in which projects, and apportions the money in each project so as to minimize the risk to the investor. EFI also insures that the investor’s position is secured by a first trust deed encumbering the project.”

This was the side of the business for which Guth was primarily responsible, according to court documents.

Within hours after the couple’s February 2003 separation, Applebaum said, Guth changed the locks on the business.

“She did not provide me with a key to the business for several months,” Applebaum told the court. “Ms. Guth’s lawyer then directed me not to speak to employees in the business… (which) cut me off from having direct access to individuals who operate the computer systems of the business.”

That made it impossible for him to handle his particular responsibilities to either of the two businesses the couple owned, he claimed.

Describing those companies, Applebaum said, “The company operations consist of EFI, which receives investments and makes loans to developers; and Republic Properties, which takes on defaulted loans where developers have failed.”

Then Applebaum suggested that it was not only developers who had failed:

“(Guth’s) mismanagement has led to loans being applied in ways that were improper,” said Applebaum in the papers. “In those projects during the past several years, the parties have transferred some of these projects to Republic Properties to build out the projects and attempt to salvage the loans. Luckily for the companies and the parties, the rising real estate market has allowed us to break even or make money on most of these projects.”

That limited success was possible only because Applebaum was overseeing those projects, he said, “until his exclusion from the business.”

Much of the couple’s marital business, and the resulting transparency of their financial businesses, likely would have remained away from public scrutiny had not their fight over property lasted so long. Or, if Guth had completed her court-ordered obligations to Applebaum (she still owes him $1.3 million), he might not have been inclined to say things like this about his ex-wife in sworn court documents:

“Not only is she failing to follow court orders, but (she) acts indifferent to corporate law by offering security in assets that are not hers to offer. (Also) it is clear that (Guth) is scrambling to protect herself and her best property while Estate Financial, with only 20 percent of the mortgage fund invested in current loans, is sinking fast. I have no reason to believe this situation is going to improve soon.”

He suggested Guth “is trying to protect whatever she can at whatever cost to others while her financial ship slips below the water line.”

TOMORROW: Part 2: Making money with, and for, EFI.

Tags:, Applebaum, Estate Financial, Fraud, Guth

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By: Anonymous on 8/8/08

Once again Hertel is in the news poorly his partner fowler and Willrodt in a case.

LAPD arrested Richard D Willrodt for rape of a male child at the Bonaventre Hotel and the case is progressing to ensnare Fowler and hertel as well

By: Anonymous on 6/13/08

Why does everyone think Gloria works for the bank? It would seem to me that maybe she works for Hertel and has an axe to grind with them since its supposedly all their info. Just a thought.

By: Anonymous on 6/10/08

Some how you got it right long ago my hat goes off to you all. Atascadero Ventures, LLC et al and RW Hertel & Sons have indeed now defaulted on nearly $21 Million in Local Loans in Atascadero so I guess i will take my money out of HOB

By: Anonymous on 5/24/08

*** Attention All Fund Investors *** The meeting is scheduled for June 17, 2008 at 10:00 a.m. at the Madonna Expo Center in San Luis Obispo. Please try to attend!

Joe Schacherer

By: Anonymous on 5/18/08

Gloria — Contact Dan or Karen at They should report your findings first for everyone! They will keep your name out of it!

By: Anonymous on 5/17/08

To Gloria,

Thanks for your input.

Are you a fund investor or just aware of the situation?

It appears that you have some inside information that could be invaluable to the investigation.

Would you be willing to share what you know with one of the attorneys working on our behalf?

There is a plan in motion which we will know more about soon but we will need all the help we can get.

If you arre willing to help us, please reply on this site and I will give you a secure e-mail address to send your contact info.

The investors are counting on people like you.

By: Anonymous on 5/17/08

Thank for the information apparently SLO Lawyer John Belscher has a Law Suit against them Hertel

By: Anonymous on 5/17/08

Your all on the right track, but the monies are moving faster than you Know. Here at Heritage Oaks are some of the secret accounts #'s 11XXX, 32XXX ($2,700,941.25) 7075XXX, 7073XXX, 285496XXX, 7406XXX, 7074XXX and the list goes on and on and on not to mention other financial and banking firms. SLO-HAAS, LLC and Atascadero Ventures, LLC are two of many fronts for developers to open and hide illegal monies and launder assets. Federal Tax ID # 77-0582XXX keep in mind some banking officials have gotten some kick backs to conceal real owners of accounts and conceal monies from all of these joint scams, your correct it is a PONZI CON.

By: Anonymous on 5/15/08

Please don't cross post. If you post the same comment in multiple threads to get your message across it actually diminishes the effectiveness. Readers and responders can't be sure they are following the posts because they appear in more than one thread. It is like having three conversations at the same time.

By: Anonymous on 5/15/08

To Open Letter –

I'm sure there will be many questions by many investors and he wouldn't be able to answer them all here. Let's go hear what our options are. Mr. F would not be putting this meeting together if he didn't have advice on how we should proceed, where we would find a new manager,how we would hire a new manager,and the steps we must take. Karen Guth is not the only manager of a hard money lending corporation. There are educated people who do this for a living. We would not go into this blind – as we are now. We would know what the costs are and even be able to see the books if we want. It's our right. Let's go to the meeting and hear him out. Let's get some facts. There is too much stuff to sort through on these blogs. Who knows what's true or not? I want some legal advice and to know what we can do to get a new manager in there to see if there is any money or assets of value left.

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 5/13/08

This was found on another uncoveredslo article's blog yesterday. It's worth sharing here.

Marylin says:

Nice to see someone is doing something, FYI Cindy got her monies and moved to Nevada, to enjoy her retirement. She made a deal and is going to stay out of the loop. She warned many investors apparently none listened, until now. My spouse has been investigating several SLO Developers and Investment Scams for the past two years for an Insurance Company who is concerned one of their clients has been running a con game. One matter that has gotten the ATTENTION of the IRS is a local developer named Ronald W. Hertel of RW Hertel & Sons in a Florida Federal Case # 2007-CV-61031-JIC where the developer tried to launder ill gotten monies from SLO to the tune of about $ 14,975,000.00 apparently a LLC called COOKHAM HOLDINGS, LLC and ATASCADERO VENTURES,LLC all connected to a Winery called the 5 Mile Bridge dba VERDOT GROUP, LLC are all connected to several scam operations with Rossi, Hertel, Fowler, Guth, Hurst, Point Center Financial, Inc. The Dolphin Group, DOYA Partners, Troxler Ventures Partners, Inc. Woodlands Ventures, LLC Central Coast Development Co., Los Robles Ventures, LLC SLO-HAAS, LLC and them some. He tells me a case has been going on for some time trying to determine Insurance Fraud, and Defrauding investors. I asked him could he talk to any of you and he can't since he works for a Major Insurance Carrier who is concerned they may be liable if a suit ever comes down they are in the damage control mode. But he warned some of those he has interviewed to go to the authorities with their information. Good Luck. FYI Cindy was an insider who did provide in valuable information to the Federal Authorities

By: Anonymous on 5/13/08

After hearing all I've heard, it appears Karen and Joshua will be in jail. Although Karen is scrambling to save herself, it's very apparent now she has fraudulantly breached her duties. Regardless, a receiver will be placed, if not now, later. And during the interm, Karen is using the Fund's money (your money and a lot of it) to fight legal battles. Once a reciever is placed, that waste of money will stop and she'll have to defend her own fraud with HER OWN MONEY! Your capital is being tossed away to fight Karen's battles due to her illegal acts. These battles arrived from misrepresentation to the builders (promised money Karen didn't have to loan leaving projects incomplete) to investors who haven't recieved promised money (ex: FTD's not being paid back after sale). These are rightful cases. I feel keeping Karen in her position would be a disaster. Do you want your money to fund fighting her battles? Learn more about your options!

By: Anonymous on 5/13/08


By now you should have received an attorney's letter requesting your approval to call a meeting to hear and discuss information relating to your investment.

Please sign, mark "Yes" and mail or fax ASAP.

This is your opportunity to hear facts and decide.

If you haven't received the letter, call (805) 541-2800

If you'd like more info, call me after six @ (805) 489-5791


By: Anonymous on 5/12/08

this was posted on Article


past employee says:

you want to know where your money is, well karen funded projects based on completion value to make interest payments, also follow the LLC's, most of them she owns, she has 9 projects funded with mortgage fund money that are bare land, funded as completion value, and funds used to make interest payments to investors in the fund, that is until all the loans were completely funded, and money ran out to make interest payments. EFI was most famous for taking investors money, fully funding construction loans, and using the money to make interest payments, 75% of the time when the contractor was ready to build all the money was gone

By: Anonymous on 5/10/08

OK, what am I missing.

Guth is selling assets. She is foreclosing to get properties in her own or her own company's name:

"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."

Attorney Roger Frederickson is trying to get the votes needed to conduct a meeting that will possibly replace Guth as the Fund Manager.

The DOC suspended Estate's licenses.

Dept. of Real Estate has a file open and is looking into Estate.

SEC has a file open and is looking at Estate.

FBI has a file open and is looking at Estate.

And Guth continues to tell us that things are going to be OK and Estate is not going anywhere.

Do we all just sit by while some government agency takes control of the company, liquidates our investments for pennies on the dollar, or do we stop crying and do something.

Fellow investors we need big help – and we need it now! Who's going to set up and lead us

By: Anonymous on 5/10/08

Apparently the Gearhearts,Guths,Hurst,Estate,Slow Bears and the like are not going to send you any money if people don't stop picking on them. I will and so should the people that have been helped be your undercover work. Apparently I've hurt the feelings of these pilars of the comunity. Basically there is only two types of individuals I have and will continue to bring to light. 1) Those who steal from others, particularly the elderly and 2) Those who make excuses for the thieves (Slowww Bear, Duedog, You Know Who) If you fall into one of those two catagories oh well. If you are an investor who wants to hope things are going to get better leaving this den of snakes in charge I am simply sugesting I don't think so. I can see I've really gotten to the Gearhart Cheerleaders and that just makes me smile. I know I blogged excessively when Gearhart had his people jamming the blog with his future standing for Sainthood and what a genious he was at that time it was necessarry to take a stand. Good luck to all investors. Don't let up.

By: Anonymous on 5/10/08

To the below post. Aren't you something! First off smarty pants, when the user name Anonymous appears that means that person didn't fill in the Name field. If one leaves it blank then the name Anonymous appears. That accounts for a lot of readers. And I do mean a lot! Take your angry bone somewhere else. Now go get drunk and beat your dog!

By: Anonymous on 5/9/08

My question is why? Do people actually pay to support this site?

After reading some of the post on this website I cannot believe that you would let someone post with blatant disrespect towards others! Does anyone censor this site?

As for the 210 comments on your recent posting it ended as this is written at 258. Close to 100 of them were from two people, Insider and Anonymous I don't believe that to be real readership!You should be so proud and so should your sponcers for I will not support either!!!

By: Anonymous on 5/9/08

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 5/8/08

Get a load of this….. says:

Aired on American Greed last Wednesday was a documentary of the Baptist Foundation of Arizona. I missed the first part of it, but this company/foundation was promising their investors 12% derived from real estate deals. It happened in the 90's but oh, the similarity is stunning to EFI. It ultimately turned into a Ponzi scheme. If you want to understand what so many believe is true about Estate Financial, I suggest watching this show. It concludes with prison time for both owners of the Company. The next airing I can find is Sunday 5/11 at 8:00 CNBC – American Greed.

By: Anonymous on 5/4/08

Could someone give us some information about the B625-05 project in San Miguel.

Thank you .

By: Anonymous on 5/2/08

My predictions for a time line. The state finds Karen/Josh incompetent. A temporary receiver is appointed. Many investors freak out – many are relieved. But all investors wonder what their other options are now? A meeting is called. We eventually after lots of squirming and lawyer fees appoint a management team. Folks complain about the costs of the team but eventually facts come out revealing it's much cheaper than Karen/Josh.

I do agree with 'Get Rid of the Crooks' the Karen/Josh needs to be stopped and fast!

By: Anonymous on 5/2/08

Can anybody explain the function of Republic Properties, Karen and Charlie's other company. I heard the divorce docs say Republic Properties Inc was buying bad loans from EFI? If so, how did the money get to the investors if a loan owned by the investors were sold to Republic Properties. Did the investors take a short pay? Or did they use the proceeds to just keep paying investors interest until the money was gone? Someone explain please. Any other ideas?

By: Anonymous on 5/2/08

What we need is a competent manager – not a receiver. If we can replace Karen with a 51% majority vote, a manager can be appointed. Someone of integrity and with sound business practices would be able to assemble necessary personnel to provide investors with a better outcome than a receiver – but ANYONE (including a receiver) is better than continuing on the road to ruin with the dishonest, greedy, lying duo.

By: Anonymous on 5/2/08

Linda K says:

Can I come? Just amke sure that the monkies don't throw things at me and provide anice accomodation. I'll be nice to you

By: Anonymous on 5/2/08

To Anonymous says:

Her personal residence/farm have some income and it is valuable. If she took out loanon property foreclosed belonging to investors, proceeds should have been returned to the investors. Other properties if they have income can be financed as long as it carries itself.

However, it will be interesting to see what was the value of the property she took over from the FUND.

Yes there will be many more intersting items popping up as we proceed with investigation. Heritage Oaks could not have known her current problems a few months prior. At this time I am willing to wait for more details. Don't worry, it will be pried open sooner than later.

By: Anonymous on 5/2/08

To Anonymous

Early on it was reported that Heritage Oaks Bank has made several loans to Karen Guth for several millions of dollars. There is a 5+ million dollar loan on her personal residence on Vineyard Dr. and 2 other loans for her Cayucos house and the other house that came out of EF foreclosure and went into her name which is located on Falcon Dr. in Atascadero. For one minute I do not think that Heritage Oaks has anything to do with the day to day operation of EF. Although one may question how Karen qualified for such loans when her public image is that of distress. She evidently must have an extremely strong personal portfolio (probably her investorts money) to qualify for loans in these amounts.

Now maybe we know where the money went.

By: Anonymous on 5/2/08


There are number of lawsuit against EFI KarenG. Josh Y. been filed and more being prepared. EFI is spending investor's funds to defend the undefendable. More reason to have a receiver appointed aho can sort things out and settle claims before it gets too expensive. It will not happen as long as Karen G. and Josh Y. are in charge.

As she has shown in her divorece with her X., she'll fight with investors money to the end.

By: Anonymous on 5/2/08

Donald Bundren

Dan canonly do so much when it comes to investigate Heritage Bank and EFI/Guth. However be assured investigation is happeneing by the proper authorities.

If there was/is anything inproper, heritage Bank will be on the hook also. At the same time please remember Heritage Bank is nota party to the EFI's fraud as we are aware of today. Heritage Bank is being constatntly audited and is a public co.

Lets be careful ofaccusing them at this time.

By: Anonymous on 5/2/08

Mr. Blackburn, Have you investigated the relationship of Karen Guth and Heritage Oaks Bank. Follow the money trail???

By: Anonymous on 5/2/08

Have any lawsuits been filed? will they be filed? If so will you please cover them here for us?


By: Anonymous on 5/2/08

Karen,Call me. I'm in Costa Rica now building a wonderful home. You can use my guest room until you can get settled down here.

By: Anonymous on 5/2/08

Monica L. says:

I would like to hear more about Charlie and the secretary. Why are comments being censored?????

What details you want? ze, position, duration?

By: Anonymous on 5/2/08

I would like to hear more about Charlie and the secretary. Why are comments being censored?????

By: Anonymous on 5/2/08

It's all coming out. So much for Karen and Joshua's fans. Karen/Josh, you can't defend yourself for your crimes. You KNOW what you did. Karen has a degree in criminal justice for cryin-out-loud. Take a breather and tell the truth. These continued lies are just adding to your misery. It's obvious a receiver will be appointed in your office and you won't be able to fool this person and all the investigators! The question is "will Karen pathologically lie until the end?" All associates/builders of EFI's playing in this Ponzi scheme will be discovered and brought down. There is no lawyer that can protect them (although they sell themselves by saying they can). Karen WAS a professional 'once upon a time' but so are the investigators who are diligently combing her. They will and probably already have found most of the dirt. The life style for Karen and Joshua will certainly change (slammer). Don't worry, you'll have plenty of visitors – we need some sort of entertainment for our money.

By: Anonymous on 5/1/08

There is so much info that can be obtained in divorce records. Ususally you can find just about anything you want to know about someone who went through a nasty divorce. I'm not surprised that this is a 3 part story. Talk to us Charles, all info helps.

By: Anonymous on 5/1/08

I don't understand how Karen could attempt to continue running her business without someone who was qualified to replace Charles. Once he was gone it all got out of control. Over funded projects, projects not built at all and funds diverted. This explains what happend to an extent but not all of it.

By: Anonymous on 5/1/08

20% in projects that made sense.Most of thefunds money invested in EFI's related companies that were overfunded and over expensed to the benefit of the partners, mainly Karen Guth and Joshua Yaguda.

By: Anonymous on 5/1/08

Hummm, Only 20% actually invested? I hope to hear more about that. This doesn't sound right.

By: Anonymous on 5/1/08

Sorry folks, Charlie got it under the table. She did not inhale. Why are you belittling Charlie this way?

By: Anonymous on 5/1/08

Tell me more. I hope you have more financial info. I should think that Charles would have known everything.

The part about the kiss is cute.

By: Anonymous on 5/1/08

My post about Charles and a certain someone caught using a desk in the office for monkey business rather than

EF business has been removed???

By: Anonymous on 5/1/08

Investors, builders and developers, banks…all were scammed by Guth..and that's right she will do what ever it takes to protect herself only!

By: Anonymous on 5/1/08

Where did the blog go written from Karen G about Charles relieving himself with the secretary on the desk? She then goes on to blame him about the failure of the business? I guess we are being censored.

Karen, there is no blaming others, greed got in your way! If the money wasn't there, don't make the loan – period! Bet you're wishing you ran an honest business now? Imagine life without all the lying, dogding, ducking, manipulating. How simple this all could have been! Think of the successful business you could have had, even in today's market. This is all too bad! Live honestly! It’s not too late to start.

By: Anonymous on 5/1/08

To Karen G. I highly doubt Karen Guth would be writing into this blog. Regardless of who wrote that, if Charlie did perform these acts, then good for him! Karen is too self absorbed and most likely needed to see that as a reminder that men need some lovin' too! Let the joy of life be your God, not money!

By: Anonymous on 5/1/08

Does somebody care to elaborate the comment, ‘with only 20 percent of the mortgage fund invested in current loans?” Where is the rest? I realize some of it was lost with current market conditions but with loan to value ratios of approx 75% or less, the investors shouldn't be feeling this kind of pain. Again, the echoing question is asked, "Where did the money go?" It seems more than reasonable she's using the Fund money to fight off lawyers who have LEGITIMATE cases due to her fraudulent acts. Karen appears to have a self-destructive personality. Too bad for the investors! My heart goes out to you all! And may Karen and Joshua receive the proper punishment by law!

By: Anonymous on 5/1/08

It seems odd that dewdog has such a different additude about the Hurst/Gearhart deal. What many don't seem to understand is that they want to search for the money. As if there is fraud and mismanagment they will find the money in some hidden account somewhere overseas or in someones mattress. What the truth most likely is that even if fraud and mismanagment are the reason, the money is often just gone, through exessive spending or just paying thierselves saleries or commissions or making the interest payments while projects just sit waiting for funding or mis calculation of construction costs. The truth as always lies somewhere in the middle in that grey area of life. So if there is any money left in these project accounts get it now while its still in the loan accounts. Don't let these same people continue to manage your money. Take control of the properties. Take a deep breath and then put together a team of qualified profesionals to finish and liquidate. You may need to hang on to some of the properties for a year or so to allow the market to recover, but take control.

By: Anonymous on 5/1/08

Very interesting story. Charlie is actually a pretty nice guy-when he wasn'[ around Karen. Years ago Karen bought Charlie the Kubota tractor dealership. I was in talking to Charlie one day and after about 15 minutes Karen came out of her office and asked if I was there to buy a tractor. I replied no at which time she told me to leave the premises because Charlie didn't have time to talk. Beleive me I'm not usually short for words but the money mongrel got me on this one. Charlie states he was licensed for everything. I checked and yes he did have a contractor's and real estate license. I was around when the Applebaums/Guth's showed up in Templeton. Charlie had no building experiences to speak of but teamed up with a realtor by the name of Gary Stewart. So the blind led the blind and off they went with Karen's money and started building homes. Looking at what is going on today I would have to say that Karen probably put Charlie up to all of this and this was all part of her master plan. I could never understand how these people could get a contractors license since one of the requirements is to have 5 years of building experience endorsed by someone when applying for the license. When I heard that Charlie left Karen my first response was good for him because Karen is not a nice person. I think her one and only freind is Ben Franklin and she will do anything to get that money. So hooray for Charlie. I hope he gets everything he is entitled to from Karen and I hope he helps flush her down the you know what.

Charlie may be the best freind that all of the investors could ever dream of having.

By: Anonymous on 5/1/08

Finally, you are making this public. EFI's problem did not start with the onset of the subprime mortgage industry or the slowing of economy. It was totally selfinflicted taking thousands down wit them. Sinece 2004, EFI's was runnung a "PONZI SCHEME".