INSIDE EFI: Under The Microscope

May 4, 2008

Part 3: The good times are gone

(Editors’ note: This is the third and final article in a series examining the high-rolling, multi-million-dollar Paso Robles financial lender, EFI, and its current problems.)

By DANIEL BLACKBURN

One of the down sides of divorce is its very public nature, proceedings often revealing things about people they’d rather keep secret.

Had it not been for the bitter 2004 divorce of Guth and Charles Applebaum, then co-owners of Paso Robles’ Estate Financial Inc. (EFI) and Republic Properties, much regarding their businesses probably never would have found its way into the public domain. And if legions of investors were not today concerned about money they’ve invested with EFI, details of the pair’s divorce would have interested few.

But now the once high-flying North County hard money lending firm — bending under pressure from simultaneous federal, state and local investigations — is more exposed today than ever before. Complaints have been raised about the firm’s practices and investors have voiced concerns about conflicts of interest, mismanagement, and improper use of EFI’s mortgage fund. Investors have gathered by the hundreds in a series of meetings all over San Luis Obispo County seeking ways to recover monies that had been entrusted to EFI. Last week, the state Department of Corporations lifted EFI’s permit to sell off any of its real estate investments while the agency probes dozens of formal complaints.

EFI is in the business of making construction loans, charging high interest and – when times are good – paying high dividends to investors. When the real estate market began souring, Guth told investors that EFI’s slide was temporary, that it was just a result of the market downturn. But when investors had more questions than answers, the EFI story began to unravel.

Much of EFI’s present quagmire can be traced to Guth’s and Applebaum’s divorce, and to the couple’s increasingly hostile court confrontations over division of their personal assets… battles which continue even today.

Court documents spanning four years show that Applebaum’s departure had several immediate effects: Guth cranked up the sales and marketing machine, and EFI stopped paying much attention to construction projects in progress. In the years immediately following Applebaum’s departure, Guth and her new partner, son Joshua Yaguda, began concentrating almost exclusively on attracting new investors and making new loans.

After all, that was how they got paid: for each dollar that went out in a loan to a building contractor, EFI took one to three percent right off the top. There was more motivation to loan, less to maintain any semblance of quality control of any project.

The increased effort bore fruit. In a little more than 12 months after Applebaum left the firm, Guth and Yaguda had increased EFI’s mortgage portfolio from $95 million to $135 million.

Guth was hitting her stride in a very fertile real estate marketplace. “Fundamentally, I am a saleswoman,” she said in court documents describing the separate professional functions of the feuding couple.

In those 1994 documents, Guth explained why she thought additional business was accruing to EFI after Applebaum’s departure:

“We maintain excellent lender records and notes to ensure investors get whatever special attention they require,” she avowed. “Overwhelmingly, the reason new investors seek us out is because they have been told that when you call EFI you can always talk to Karen or Josh. Secondarily, EFI’s excellent reputation for protecting their investors, providing a continuous stream of loans for them to invest in, and the level of explanation, disclosure and attention they receive from us.”

Applebaum, on the other hand, said he didn’t think EFI’s expanding portfolio was attributable to Guth’s “expertise and personal effort,” but to the simple fact that “demand for capital in the construction market and the ability to pay ten percent when banks are paying one percent.”

And the big numbers Guth and Yaguda were putting up were misleading, he testified: “As of Nov. 28, 2007, of some approximate $172,687,619.32 in construction loans (assets) only $36,160,142.99 was invested in current, performing funds… (thus) “it is clear that only 21 percent of the entire mortgage fund portfolio is current and performing.”

Early in the property division fight, Applebaum sought financial information on one of the couple’s companies, Republic Properties. When EFI would make a bad loan, Guth would transfer it into Republic Properties, he told the court, because “she wishes to use all the cash flow from these investments… to pay interest into EFI.”

Information he sought, including the status of construction projects, was not provided, he reported.

Because Guth was at the time claiming that monthly debt service was costing EFI $107,106, Applebaum said he believed the bad debt portfolio carried by Republic Properties exceeded $12 million three years ago.

In what may turn out to be a fateful commentary, Applebaum hypothesized on Guth’s use of Republic Properties: “The real reason that EFI has had to transfer ‘bad loans’ to Republic for workout is that (Guth) decided to advance certain funds which were invested by investors in one project, to the builder for use on another project. This action is clearly inappropriate. I do not trust (Guth’s) judgment in this or other ways .”

Applebaum described one circumstance involving an office building in Paso Robles, referred to by Applebaum as the “9th Street Project,” which became a particular focus of attention during the property division hearings.

In what she termed an “update” of Republic after her separation from Applebaum, Guth sought $250,000 to finish the 9th Street project, which now serves as the company’s home office.

“I am certain,” he alleged in sworn testimony, “that (Guth) has unilaterally removed sums from the investment account without prior notice or consent and spent them in various ways that she has determined are ‘joint’ expenses.'” He also claimed that Guth “has certainly misappropriated the nearly one half million dollars we placed in the (9th Street project) investment account in October 2003.”

He claimed that the $900,000 construction fund for the 9th Street Project was spent by Guth “prior to putting a shovel in the ground.”

The travails articulated by Applebaum, ironically, echo many of EFI’s investors. Some have expressed concern that Guth has moved investment funds around from project to project in what might be a violation of contractual agreements. Still others hint at fraud.

The good days may be gone for EFI. Many of Guth’s personal assets have been liquidated to satisfy liens, judgments and other payouts. On last Valentine’s Day, the county sheriff delivered an order for Guth to sell her Paso Robles ranch, valued at between $2.5 million and $3 million, to pay the remaining debt to Applebaum and two banks. Sources have told UncoveredSLO.com that just last week Guth was busily attempting to raise capital or trade property to cover the Applebaum obligation, hoping to avoid selling the ranch.

And last but not least, her personal income is evaporating. Guth reported a $2.8 million taxable income in 2005. One year later, that had shrunk to only $1.4 million.

Tags:, Applebaum, EFI, Estate Financial, fraud, Guth, paso robles


Loading...
Stefan

By: Anonymous on 6/2/08

It is true if you get a lawyer you will have to pay him. Maybe if you had a lawyer you could make sure Estate's not using your money to pay three of four lawyers on thier behalf.

By: Anonymous on 6/2/08

Who's to know what karen charged? BECAUSE SHE HASN'T SHOWN THE BOOKS! AN HONEST MANAGER WOULD HAVE SHOWN THE BOOKS BY NOW! She's OBVIOUSLY committed fraud and is trying so very, very hard to keep it from the investors!

By: Anonymous on 6/2/08

Threadjacking is so rude!

By: Anonymous on 6/2/08

Don't forget to Vote for Arnold. Get out everyone you know. Your wife, husband, son, daughter, Mom, Dad, freinds and coworkers. VOTE FOR ARNOLD. Your current and future property rights depend on it. As well as a drug free environment.


By: Anonymous on 6/2/08

To Accountant Says:

I, for one, don't believe that Karen didn't charge us for managing the fund for two years. I don't care what she says. We know for sure once new management/receiver takes a look at the books.

By: Anonymous on 6/2/08

To Accountant Says:

No, Karen will not get a dime for being pushed out the door. You are wrong. She is and has been committing fraud. That trumps any payout.

By: Anonymous on 6/2/08

To Accountant and all,


Yes, who is giving legal advise? A court appointed receiver or management team, if competent, will have Karen walk without a dime! Hire only professionals! They will find fraud and even go after her for past fees she has taken. Communicate with the right lawyers. All lawyers are not trained the same! Find receivers or management teams from the internet or phone book and call them! You will be well informed! Listening to anyone else is a mistake! Talk to seasoned forensic receivers to learn your rights!

By: Anonymous on 6/1/08

Replace Karen as the manager of the fund? I did a little accounting based upon financial information I have acumulated.


If I am right, immediate upon replacing Karen as manage she would be entitled to well over $5,000,000.


Agreed, that is based upon two assumptions:

That she has not taken her management fees for two years. That was her representation at the big meeting held in Atascadero.


That he fund was worth what her financial statements, as filed with the DOC, are legitimate.


Where is the new manager going to find the money to pay Karen? And if you don't pay her she has not been replace no matter what you vote.


Who's giving you people legal advice? Get a court appointed person to manage the entire company or write Karen a check. Your choice!


Stefan

By: Anonymous on 6/1/08

Anyone know the law? If Karen forecloses on herself, does she have to expose those books? Does one of her companies have to file BK in order for EFI to foreclose on it? Is so, may this be why she's stalling? BK includes showing the books to authorities, right? And she certainly doesn't want to expose that! Anyone care to explain?

By: Anonymous on 6/1/08

Receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver, receiver!!!!


What's not to get here?

By: Anonymous on 6/1/08

Certainly, all involved with this Ponzi scheme will be nailed. Whether they are joining the party now as in these specially selected investors or whether they performed their fraud years ago. Their assets are now exposed. So please, help Karen. I'd like your car, home, money, and even the clothes on your back. Please, please help her! You folks are the best!

By: Anonymous on 6/1/08

Friend or Foe? Hmmmmmm?? says:


Great news, We want more of these "helping hands" and "silent partners" covering up for Karen. More the better. Lets just hope they all have good liability insurance and assets when all the frauds deceptions are uncovered. We need to be able to collect from any and all sources. Keep up the great work.

By: Anonymous on 6/1/08

In looking over my meager file for loan B237-04 Templeton Mixed Use, I find it curious that Mel McColloch, Estate Financial employee that Karen announced that she had brought on board after our interest payments stopped in September 2007, had his interest in this loan bought out by Estate Financial Inc on an Assignment of Deed of Trust dated 9/24/07 (#2007079637). Coincidence? HMMMMM??? She has recently listed several million dollar plus Estate Financial properties that we investors funded, with Gordon and Diane Hansen, owners of San Luis Obispo Real Estate – two of her biggest fans and proponents for her continued management. Coincidence?? Conflict of interest??? Hmmmm???? She has hired another investor, Robin Fairbairn, Attorney, to do legal work for her – conflict of interest? Hmmmm??? Who else is she rewarding and at what cost to the investors? In any case, as we know Karen has never let a little conflict of interest hold her back from doing whatever she wants to do. It just gets curiouser and curiouser….

By: Anonymous on 6/1/08

Not Surprised says:


There is no such a law that she can't foreclose on property she is involved with. I will post an explanation for her activities. It has everything to do with "PONZI" type of operation.

By: Anonymous on 6/1/08

To Sorry to Say:

One of the reasons that Karen is devaluing the Fund is so that she (through one of her many other identies) will be able to buy back the properties that she devalues. The same ones that we put our hard earned money into, at cents on the dollar and then have one of her "Borrower" buddies finish the project, she sells it and takes whatever profit there is. In the meantime, she charges the Mortgage Fund for managing the property, building the projects, and selling the project. She takes a bite at every step. Remember, this has NOTHING to do with the real estate market and everything to do with her PONZI scheme. Don't be fooled.


Stefan

By: Anonymous on 6/1/08

Regarding loan B237-04 (Templeton Mixed Use)The borrowers who signed off on the Construction Deed of Trust (doc. # 2004088129) are Hamish S. Marshall, Manager of Ramada Partners, LLC, a California limited partnership, Kenneth P. Slaught, Manager, and Richard L. Ridgway, Manager of Templeton Mixed Use Associates, LLC, a California limited liability company, and John Wilson, President,signing for JMW Management, LLC and JM Wilson Holding Company, Inc. Although Karen's name does not appear as the signator on these entities, I believe Ex-Employee who says that she is involved with Templeton Mixed Use. I have also heard and would like to have confirmed if anyone knows – that one of the reasons that Karen has not foreclosed on properties that she is a manager/member of is because the law states that she cannot foreclose on herself. That would explain a lot as to why there are properties over 4 years old, fully funded, no where near completion, that haven't had any work done on them for ove 2 years and that are in default and have not been foreclosed upon. Can anyone find out it this is the law?

By: Anonymous on 6/1/08

To Ex-Employee –

On behalf of all the investors, please, do the right thing. Please call some authority, be it Vince Otto of the FBI, Karen Patterson, Senior Corporations Counsel for the Department of Corporations, or any attorney investigating Estate Financial (and there are plenty). What Karen and Josh have done is evil. They must be exposed for who they are. They will be replaced. They will be prosecuted and they will do time. Your phone call to the proper authority will hasten their demise and bring some peace to those of us who suffering. Please help and God Bless You.

By: Anonymous on 6/1/08

templeton mixed use is Karen guth and about 6 other highrollers, the total loan amount far exceeds 15 million between tds and the fun, they havent even been given approval to develop, your money once again has paid for interest payments, and entitlements to shareholders of the project, why is no one getting complete records, boy this is getting really deep, guess i need to make some calls after all. wish me luck, i think im gonna need it, sure hope i come out of this alright, i dont have any money invested anywhere to fall back on if i end up losing my job, but i must do the right thing, just cant sit back and listen to all this garbage coming out of karens mouth any longer, i think she forgot the difference between the truth and a down right lie

By: Anonymous on 6/1/08

Sorry to say says


The value of the fund and balance of the loan depends on the day of the week. Have not noticed it yet?

Nothing that comes out of EFI's estimates, timelines for completition payment schedules etc. makes any sense.

By: Anonymous on 6/1/08

Did anyone attend the meeting of 12 investors held at the EFI office last Tuesday?

The word is that Karen said she is getting ready to send a letter with a new fund value.

She has already devalued the fund by over 20 million in the past several months and it looks like she is going to do it again.

Post what you know!!!

By: Anonymous on 6/1/08

Re: Tenpleton mixed use


I can only reply to the portion of the loan that is carried by the fund.

In January 08 the balance of that loan was $2,218609.

On the present web site the combined loan balance is $1,950,935. I know that the TD holders have the majority of this loan but it still make me wonder what happened to $267,674.

The property value may have gone down but the loan amount is changing with out any payments being made for the past two years.

Someone needs to buy a caculator at EFI.

If you find any inconsistant

loan amounts please post them and demand an explanation from Karen.


Stefan

By: Anonymous on 6/1/08

Re: Tenpleton mixed use


I can only reply to the portion of the loan that is carried by the fund.

In January 08 the balance of that loan was $2,218609.

On the present web site the combined loan balance is $1,950,935. I know that the TD holders have the majority of this loan but it still make me wonder what happened to $267,674.

The property value may have gone down but the loan amount is changing with any payments being made for the past two years.

Someone needs to buy a caculator at EFI.

If you find any inconsistant

loan amounts please post them and demand an explanation from Karen.

By: Anonymous on 6/1/08

to Don't Sign


Although in the past I have recommended the need for a CPA to review the books. On this one I would recommend the services of a licenced Architect or Engineer to review the project and what is its true status and the likelyhood of its actually moving forward and or the timeline that could be expected. They could review the permits as well as the construction documents and provide a report regarding the true status of this project.

By: Anonymous on 6/1/08

Don't Sign! says:


TO THE MORE THAN 200 INVESTORS IN LOAN B237-04 (Templeton Mixed Use Partners):


Fascinating comment. You are on the right track. Who is the developer and partner on this project. More details will give a better picture.

By: Anonymous on 6/1/08

TO THE MORE THAN 200 INVESTORS IN LOAN B237-04 (Templeton Mixed Use Partners):


Karen Guth mailed an "update" on 5/16/08 for this loan – the first one since 11/1/07. She asks us to sign a majority action affidavit to "accept the proposal from the borrower to have the legal rate of 7% interest accrue on the loan, and have it all due and payable WHEN THE LOAN PAYS OFF." She neglects to give a PAYOFF DATE – pretty important piece of missing information. According to my documents the payoff date was 5/1/06!!!!!. Do you think SHE'D sign a document like this? You can bet your socks that she wouldn't, cause first of all she'd have one of her multitude of attorneys look it over and after they stopped laughing they would tell her that she'd have to be NUTS to sign such a document. Karen duty to was to foreclose on this property. It should have been in our hands YEARS ago. Interest payments continued nearly one and a half years after the payoff due date but stopped 9/07 – 9 months ago. Now, she tells us that she “believes that developers are in the best position to complete the project” and recommends that we sign on. I have a big problem with that recommendation given the fact that from 5/04 to 11/07 – over THREE AND A HALF YEARS the only information we got regarding this property was the 11/07 "project history" of "coordinating, revising, reviewing, and working on the entitlements". This is what has been done with our $11,200,000 that she collected for this loan – our money. It is 7 months since THAT letter and NOW she writes that "some progress has been made toward the entitlements". Where are the houses, the duplexes, the mixed use units, the commercial buildings, the roads, the curbs, the utilities? Why is there NOTHING to show for our $11,200,000? Where or where did it go? Not to pay taxes – the taxes are delinquent to the tune of $82,017.46 as of 5/30/2008. How does the “progress” that she refers to in her 5/08 letter differ from the “progress” that she refers to in her 11/07 letter? She doesn’t explain that either. How does it differ from the "work towards the entitlements" that she told us about back in November? She writes "additionally the equity position of the Estate Financial principals will now be for the benefit of the investors." Anyone know what that means? I don't. She then has the audacity to recommend that we accept this proposal "as soon as possible" – her usual time frame. I suggest that none of us sign this incomplete, poorly written, piece of paper. Haven't we given her enough power over our investments? Hasn't she "mismanaged" long enough? She's had her permit pulled by the Department of Corporations for Pete's sake! Federal and state agencies ARE STILL INVESTIGATING HER! We may have put our trust in her in the past but given what we know today, are we going to put ourselves in even more jeopardy under her management? Let's not be stupid. Don't sign anything that comes out of her office unless is a reconveyance form that will return your money. One more question that bears asking – is Karen Guth a partner in one of the borrowing LLC’s on this project?


Stefan

By: Anonymous on 6/1/08

Once again, Julie Rodewall neglects to update the counnty records. They are supposed to be updated on saturdays (why konly oncec a week:?) but they haven't been updated since 5/23. Somethings you don't want us to see? Weel we will see them eventuallly, you can't cover up what you are doing. These are official files that the public has a right to seer. Do your job

By: Anonymous on 6/1/08

does anyone know anything about karen's partner/contractor andy fetyko?

By: Anonymous on 6/1/08

to V.M.


Are builders and investors conflicted? That will have to be answered on a case by case basis. Is the builder in default? Why? Is the builder a partner with the Fund Manager? How?


Out of 1,468 loans there are only about 25 still current with their payments and the majority of them are past their maturity dates, most by many years. Who is responsible for this current state of the Fund? Is it only the builder's fault or is the Fund Manager some how responsible through poor oversight or miss management or outright fraud? I think that there has been enough input here by others to point us towards the correct conclusions.

By: Anonymous on 6/1/08

Could someone exlain why builders are a conflict to the investors.

By: Anonymous on 5/31/08

attention montebello oaks/ doya partners investors.

we were driving by the abandoned houses and 'GUESS WHAT' there was a laborer working on one of the houses. i also think i saw andy fetyko there. very interesting.

By: Anonymous on 5/31/08

Has anyone seen Renascent Holdings LLC on any of their loan documents (if you are fortunate enough to have received them from EFI)? Is this another one of Karen's LLC's that she's involved with?

By: Anonymous on 5/31/08

Please don't use my name. Pick another one unless your name is really Jill. Thanks

By: Anonymous on 5/31/08

Investors want to help themselves? The agencies are overwhelmed so it's up to us to break the case. If you know names of past employees please write effundinvestors@yahoo.com Also contact builders and ask if they have past EFI employee information. Many do. Get those employees names and go to the white pages. Call them! Ask if they will answer some questions. If you don't know what to say, contact me

By: Anonymous on 5/31/08

K in Paso


Can you please write me at fullyfunded93401@yahoo.com


Stefan

By: Anonymous on 5/31/08

K in Paso says:


Only thing I can say at this time, There is more going on than than publicly can be stated.

By: Anonymous on 5/31/08

Jurisdiction at this time is with the two licensing authorities who are actively investigating (DRE & DOC). If they find evidence of any laws being violated they will refer the case to the local DA's office.


From what I understand, this is an important chain of events that must play out in proper order. I know that many investors have much at stake, but a misstep could muck thing up for us. Our starting legal action or the DA pressing charges before the DRE & DOC finish their work will cost us money in the form of Karen's legal fees being paid out if the Fund's resources.


If the DRE & the DOC find wrong doing and revoke EFI's licenses then the first task is done proving possible criminal deeds which according to our contract voids Karen's claim to our money for legal fees.


The SEC and the FBI may or may not have any jurisdiction, if any one has had DIRECT contact with them please post it so that we can file our complaints too. I have not been able to get the SEC's attention yet.

By: Anonymous on 5/31/08

joy boy says:


Regarding the local DA's action (inaction) is real issue for all concerned. If this case was a simple "drug posession of a few kilos a pot", the DA would gloating in public. The issues eith EFI, HURST will not be handled by the locals. Its over their heads and there might be collusion. As to what is going on? This time, we can only speculate.

By: Anonymous on 5/31/08

To confused


According to the Subscription Agreement that I signed, on page 6, section 11, Termination of Manager's Authority…


"Members may terminate Manager's authority hereunder in the event of any of the following… (5) agreement by Members holding a fifty percent (50%) or more interest in the Fund, not including Manager at any time upon 10 days written notice and upon repayment of the following:


a. Any outstanding payments made by Manager on the Fund's behalf,and


b. Any accrued expenses incurred by the Manager in connection with the managing of the Fund's assets."


This my fellow investors is what I have been calling the "Poison Pill", one of many items in the contract that we need to talk about with the law firm. These payments to the Manager and her legal fees might not be due her if she is removed because of wrong doing. If we just vote her out with 10 days notice or start suing her she is entitled to these payments.


Go back and read the other items in your contract in Section 11 under Termination of Manager's Authority, there are other ways for her to be removed, but it may involve the courts appointing a receiver.


Stefan

By: Anonymous on 5/31/08

Ex employee: You wrote "If the DA ever decides to get on the band wagon and get these crooks off the street, i will be willing to testify what I know, and possibly i will be notified by other agencies for example DRE, or Dept of Corp, and I will not hesitate to tell the truth."


At this point, I don't believe the DA will do anything. He's long overdue and it would be reasonable to assume he won't get involved. In my recent conversation with an out-of-area judge, he explained THIS IS the DAs job. Definitely, without a doubt! If our DA hasn't acted and is still shuffling complaints to the DOC or DRE then something is seriously wrong with our DA. Very seriously wrong! So, please move along to the next step.


You should also know, the DOC, DRE and FBI will not be seeking you out soon. The are swamped. But a quick phone call will quickly divert their attention back to EFI's case. It will be the most powerful phone call you will ever make. You will give them the ties and testiment they need. Don't want to drive to them? Trust me, you are so important they will drive to you! Please do this right away!

By: Anonymous on 5/30/08

To all employees of Estate Financial. Listen, the single best way to stop this Ponzi scheme is for one or many of the past or present employees to report to the FBI. If I were you I'd be running there because they will grant you indemnity. There's a chance the ones that don't report will be blamed as well. If Karen or Josh have convinced you otherwise they're wrong. They are trying to save themselves, that's all. Jail is their sentence and it may be yours if you side with them. So step up to the plate and report. If you still work there quit. Oh, grab some files on the way out if you don't mind! It is near impossible to break this case if there is no whistle blower. Don't wait for another employee to do it. Go directly to the FBI, Santa Maria division and then help the investors by reporting to an active lawyer on this case. By not reporting you are helping the Karen's cause. It's worsening everyday. Why aren't you helping? There are elders who can't even afford their medication and are losing their health because of Karen. Give this serious thought. And for god's sake, don't wait for the Fredrickson meeting! Do this now!

By: Anonymous on 5/30/08

To Ex-Employee and HOB Employee:

My grandparents are becoming ill over this. They always told me that if I kept my grades up, stayed off drugs and volunteered to help whenever I could that they would pay for my college education. I've done all that. Nogt because I was looking for a handout but because I respect them and didn't want to disappoint them. They have raised me. I graduate in June and they just told me that they won't be able to fulfill their promise. It breaks my heart. I won't be going to Northwestern. I will go to Cuesta and pay my own way and I don't have any problem with that at all. I will make the grades and transfer to CalPoly or UCLA. I will work to pay for my education. That is not the problem. The problem is that they feel that they have let me down and they didn't. From what they have told me and from what some of their friends have told me, something stinks at Estate Financial. My grandparents don't have the money for an attorney and at this point are worried that they will not be able to pay their own way. I don't know a lot about all this or how it came to be but I have read the papers and this blog and it doesn't sound like anyone is really stepping up to help all these people who got into this position. My grandparents are retired and are not in the best of health. Maybe he knew what he was getting into, maybe not. But knowing him, I think he was taken advantage of. I do know that my grandparents are honest, hardworking,trusting people whose phone calls aren't being returned, who are worried sick and I can't do anything about it. You can and if I were in your shoes I certainly would do whatever I could to help. I can't imagine being quiet and just doing nothing when you could help. Contact Roger Frederickson at Sinsheimer's office in San Luis Obispo at 805 541-2800. Tell him that you're concerned about what can happen to you if you speak and ask about how you can present your information and be protected. An attorney should be able to advise you as to what to do. To do nothing is wrong. Think of your own grandparents and then put them in this position. What would you do to help them?


Stefan

By: Anonymous on 5/30/08

Dear exemployee


Have you or have you not contacted the FBI? Yes, you are blogging in a lot, yes you have investors attention but are you reporting your info to the agencies? Yes or no?

By: Anonymous on 5/30/08

To Ex Employee


It's extremely important you go to the FBI first BEFORE you go to the DA's office. Contact the FBI first, DOC next, consider the SEC if you feel this is a Ponzi scheme and then lastly contact the DA. If you have spoken to the DA already please take it upon yourself to move to higher authorities. Don't count on him alone. Good luck.

By: Anonymous on 5/30/08

to Jean: You are so out of line, i guess you must have been one of the very few that Karen gave their money back to, this woman is a crook, she broke every law that she as a broker/lender is suppose to abide by. I worked for the stupid biotch, she stole these peoples money, she stole these peoples lively hood, and given the chance she will steal what is left, you have not a clue, if you are an employee than you are covering your own butt, if you are Karen than go to hell, cause we are gonna take you down, you and your little "boy", oh yea thats right we must not forget, karen will take him down before she goes, mark my word, get lost jean, no one cares what you have to say, you know absolutely nothing

By: Anonymous on 5/30/08

There has been several stories on American Greed on chanel 42 I believe. Of these stories this is every bit as bombastic. On the one story involving the Southern Babtist church the portrayal was that the main player never tried to enrich himself but got caught in a web of lies and promises and basically did the same things Estate and Hurst/Gearhart are being accussed of. The investors in that story very much fit the profile of the average investor here in that it was people investing thier retirement funds. This man was sent away for many years and no one shed a tear for him. From what it appears hear our villians should the facts pan out the way it looks did enrich themselves to a great degree. If they did its a shame they are allowed to continue buisiness as usual while the noose tightens.

By: Anonymous on 5/30/08

Hello Jean,

From your message you are probably not an investor. You must be Karen, her friend or employee.

This blog is not interested in anything that does not help the victims. Who ever you are I would stay away form EFI because the truth is coming out and you might get caught in the net.

Our problems are not market conditions they started in 2003 long before there was something to blame. As long as the investors money came in no hard questions were asked. Yes this is America and we should expect the experts we hire to be honest and we dont deserve to be cheated just because a higher interest was offered.

The law is the same for us all, just white collar crime takes longer to prosecute.

So now we have heard your opinion and guess what,

No one believes it!!

By: Anonymous on 5/30/08

Testy.


Yes. Like all these lender stories — we will see. If you hadn't guessed it, you can go to practically every newspaper in the country and see the same story printed over and over again. People have been caught short — And it remains to be seen who violated any laws. Until such evidence is produced, I'd rather presume people are innocent — goes with being an American, you know. You're entitled to share your opinion, and so am I.


Stefan

By: Anonymous on 5/30/08

To EX-EMPLOYEE


I understand your concerns so I would like to offer you more security.

I am one of the investors that has retained one of the attornys so I am very serious about doing things in the right way. If you know anyone who is proactive in this case they know of me and my committment to help the investors especially the disabled and elderly. I have no fans at EFI, they are not going to answer my direct questions nor do they respond to my attorney. my intentions are to introduce you to my concil so, in confidence, you can get your story to the best hands.

We are spending hundreds of man hours and thousands of $$ to make our case. I know you could be the one who could make it so much easier.

The truth will come out, but your inside view is invaluable.

In this blog I am giving you my trust by giving you my name, private e-mail address, and my cell number.

Please give us a chance to share that trust.

you can reach me at bcqueen@charter.net or 805-264-7042

I hope to hear from you soon,

Barbera Engelhardt

By: Anonymous on 5/30/08

to Jean


You sound like a real self serving Biatch. Could you be Karen herself. I don't think any of her lackeys could be that unempathetic. It's got to be Catwomen herself.

By: Anonymous on 5/30/08

To Jean,


You obviously have no clue. If you are seriously one of those that believe the EFI situation is due to the market think again. Of course brokers make their money the way you say. Instead of wasting my keyboard on you, just stay posted and see the end result of EFI down the road. You'll understand someday.

By: Anonymous on 5/30/08

Seems like the same shrill voice over and over again… Is there more than one person writing all these comments? And talk about a hatchet job. Objective journalism — a thing of the past, I guess.


I don't feel too sorry for people who invested in the hard money lending market. It's high risk, high reward. Good luck, but dont' expect too many people to be crying for you. And by the way, taking points off the top is how all loan brokers/lenders make their money.

There will be an investigation, but don't expect anything earth-shattering to come out of it. The economy is in the tank — big surprise. Everybody is suffering.


Best of luck to EFI and all its investors. Maybe things will come around.

By: Anonymous on 5/30/08

To ex-employee:


Fair enough. I understand your feelings about not contacting the investors. But at the very least, please do drive yourself to the DA, FBI and DOC. If you need further information for contacting them I can get that to you. Those agencies will protect your name beyond any sense of the word PROTECT! You have nothing to worry about there. I was in a simi-similar situation like yours years ago and found myself writing notes to communicate important information to a significant other IN MY OWN HOUSE! That's how freaked I was. Of course, then I burned the notes. So I understand your fear. So again, like the others…if you write me, I'll drop my life as I know it, do whatever it takes to keep you private, and we can talk about how you'd like to help on your own terms. Please write fullyfunded93401@yahoo.com You can help the investors beyond belief and still stay anonymous. Please, please, please give this a thought!