Federal attention aims at lending fraud

June 20, 2008

A federal investigative task force looking into mortgage fraud and related offenses in a seven-county region including San Luis Obispo County will utilize at least 40 FBI agents and investigators from nine other U.S. agencies.

Dubbed SCAM (for Southern California Mortgage), the program was recently initiated, though the probe has been underway for months. San Luis Obispo is one of the seven Southern California counties included in the task force’s range. More than 100 separate investigations are currently being conducted in the region, according to FBI officials.

The select group is investigating various types of lending fraud that have had a “significant effect on our nation’s economy,” said an FBI statement earlier this week.

In addition to fraud directly related to mortgages, the SCAM task force will focus on fraud for profit cases that includes lending fraud, mortgage related bankruptcy schemes, and foreclosure scams.

This week, federal authorities charged two senior managers of the failed Bear Stearns hedge funds with conspiracy, securities fraud, and wire fraud. The charges allege that despite the pair’s knowledge that the funds were in financial distress, they continued to paint a rosy picture to prospective investors.

Similar allegations have been lodged against numerous local players involved in hard money lending businesses. Investors claim that even though Estate Financial and Hurst Financial officials were aware they were having financial difficulties, they continued to lure customers with promises of high interest on their investments.

Numerous investors and other sources claim the FBI is currently investigating both Hurst Financial and Estate Financial. The FBI would not confirm or deny the claims.

Currently the FBI has over 1,400 active national mortgage fraud cases.

“Indictments are imminent,” said FBI press relations official Laura Eimiller. “In the very near future, you will see numerous indictments.”

Federal officials encourage members of the public to report suspected illegal activity related to mortgages and lending scams to the SCAM Task Force at (866) 959-SCAM. Online complaints are also encouraged and can be submitted.


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By: Anonymous on 6/22/08

to insider. You dont listen.Try some ear wax removel.You are a very unlikeable person.

By: Anonymous on 6/22/08

to we the people


who is the everone I'm slamming? Names please.

By: Anonymous on 6/22/08

to insider.You are showing everyone how hateful and vengeful you really are. when things are going bad for you day after day and cant figure out why,look at yourself. As hard as your slaming most everone it will come back to you. look in the mirror and see what you have become. you are not only obsessed you are posessed YOU ARE AN EVIL MAN

By: Anonymous on 6/22/08

Unfortunately for Karen and Josh, their bad fortune can't be blamed on the city of Atascadero. I suppose it could be that city planners all over the state had it in for Karen and her numerous LLC's that she has created for herself. If that were the case, she could blame all those nasty old city planners and city councils for keeping her projects from being built. But that wouldn't explain what she did with the millions and millions and millions of dollars that she lent to herself for projects that had been approved by city planners yet she neglected to fund. Where did the money go? Luckily, we now have a receiver (excuse me, I mean "auditor"), looking at the books. Karen and Josh and anyone that has helped in any way to cover up her misdoings will be paying the piper very soon. More dirty launder is about to be made public and they will be exposed for what they are. Their staunch supporters who are benefitting or have illegally benefitted from that support, will be held accountable as well. I'm sure Karen and Josh wish they could blame their problems and the loss of investor dollars all on Walmart or the Atascadero city planners or "those few disgruntled investors" but they can't. They have "mismanaged" millions of investor money. Their personal assets will be found be they the two gas stations, the house in Cayucos that Karen bought in December, 2007, or the contract that their olive ranch has with Crate and Barrel (purported to be between $1,000,000 and $2,000,00 per year). Forensic auditors and todays technology can do wonderful things to uncover hidden assets.

By: Anonymous on 6/22/08

to Insider:


I know it is tedious, there are a lot of entries, but you need to re-read today's blogs. I made no implication that McKinney had profited either legally or illegally in this matter. That was someone else.


You on the otherhand, did make reference to "a few construction kickbacks".


I do, however, applaud your stance on the "Wal-Mart" issue. In the many years that I worked for the City of Atascadero, the council squandered opportunities galore for new retail businesses to provide the jobs and tax dollars needed. Once again, the City, in its inept wisdom, is going to cry that it has no money for infrastructural improvements, while on the other hand shove away a mechanism for getting the money needed for those improvements.


The City of Atascadero will likely fail due to its "No Growth" (not smart growth or shield) policies. This will cause the loss of many jobs and ultimately investments of many fine citizens. Yet the Council (with its willing partners in the media such as UncoveredSLO.com)continues to divert the attention away from themselves and blame others.


The citizens of Atascadero need to rally around the next election and soundly defeat the "Shield" initiative. Only by doing so will the people show the Council that they want economic prosperity. Why should Atascadero be the bedroom community that hands all of its retail dollars to other cities.


By: Anonymous on 6/22/08

to Former City Employee


So if I or a Bank say loans you $200,000 to build a house on your lot. And that loan says specifically you are to build complete and final a house on that lot. And that final product is my security for the $200,000. And you sign all the papers and walk out of my office with the $200,000 to build your house and instead go to Vegas and party it away or buy a jet or buy a pig at the fair. Thats OK in your book of rules? Right? I await your response. Sometimes its better to ask a very specific question.

By: Anonymous on 6/22/08

to Former City Employee


Boy you really have the talking points down don't you. You must be on the payroll. Oops, no money left right. To borrow money for a specific purpose and to use it for another purpose is fraud not capitalism. Right? You are the one who accused McKinney of some kind of payoff right? I was just speculating based on your assertion that you or Kelly knew something or you wouldn't make that kind of statement. Also I'm saying if your statement is true its criminal and I guess if your not Kelly and you worked at the City and you knew the City Manager was involved in some kind of transfer of funds as you implied you would have reported it to the authorities or you would also be involved. Or did I misunderstand you?

By: Anonymous on 6/22/08

Insider, I am sorry that your life is so pitiful that all of your time is devoted to anger.


You must have misread my comments, I never called Gearhart a 'Saint', but unlike you I never called him "Evil Incarnate".


When was the last time that you spoke with any developer within the City of Atascadero. Each one of them, those that have not been run out of the City, will tell you volumes of horror stories of dealing with the City and its planning rules and changes of those rules.


Yes, my daughter was one of those fortunate kids who had an animal purchased by Kelly at the Mid-State Fair.


If you are inferring that Gearhart has made kickbacks, that's criminal. I am sure that if that were the case, the local police and DA's office would have been all over that. I am sure that Brennler would have seen to it that charges would have been filed. However, as that is not the case, then your unsubstantiated allegations are criminal in themselves. Slander comes to mind.


As for suing the City, you need to take a Tort Law class. Unfortunately you can not sue the City for misapplying its rules and guidelines. All you can do is complain to the City Manager (who is creating the problem) or the City Council (which he has done).


The answer to your question is that all proceeds (ie: profits, financial gain from sales, etc.) come from proceeds of loans from someone at some point. That is called 'Capitalism'. Capitalism is the basis of our free market enterprise.


Gearhart received good faith loans, some of which were provided by the elderly 'investors', but not all. Those investors were, or should have been, apprised of the possibility of the loss of their money. That is why there is such a high interest rate on 'hard-money' loans. Note, that Gearhart, unlike many other developers, is still here trying desperately to make good on all of those loans, Many other developers have just walked away from their loans, many of which also came from the elderly. I don't see you chastising those developers.


No, Gearhart is not a saint, but he has done a lot of good and does not deserve the vitrial of anger that is now being directed solely at him.

By: Anonymous on 6/22/08

to outsider


The real problem with the City is not a no growth policy its more of we want to tell you what to do policy. Clearly the City has seen more building permits for residential construction prior to the meltdown than ever before. Apple Valley, Dove Creek, Southside Villas, Gearharts various projects (hundreds by itself). I'll bet there was up to 1000 houses permited in the year or two prior to the melt down. This WalMart thing has been a real problem though. You don't pick and choose these kind of deals. The City is lucky to get this kind of proposal in these economic times. We are lucky these guys are so determined. It's a shame the City Council had them remove those two restaurant pads from the plan. It will also be an equal shame if they remove the grocery component. We could of had say and Outback and a Olive Gardens wouldn't that have been nice. And what a nice layered effect it would have had.


By: Anonymous on 6/22/08

insider says:


to Former City Employee


You people seems to be yelling at each other rather than focus on whats at stake here. Money was invested and misused. When it comes to the city and permits, all cities in California are almost the same. One is bad, others are worst. They all consider developers fair games because they make so much money when times are good. When the economy turns down, developers are stupid and criminals. Cities crying that there is no money for firefighters (heros when they actually doing what they are being paid to do) police parks etc. What they don't realize is that they slowly killing the goose that laid the golden egg.

Now, we all have to enjoy the ride all the way to the poor hose. Nezt time you vote, discard all the snake oiled candidates and try to use your brain.

By: Anonymous on 6/22/08

to outsider


I do not disagree that things need to change in the processing of projects within the City. I just don't believe that in itself is a shield (note the proper use of the term shield) for outragous criminal behavior

By: Anonymous on 6/22/08

The city employees that maintain a "no growth" philosphy interfere with development of Atascadero. They are the primary reason our city is failing and that so many contractors are having to layoff employees, etc. They are notorius for putting up road blocks on projects. If think they pride themselves on making building in this city close to impossible. It's time to clean house!

By: Anonymous on 6/22/08

to Former City Employee


I'm going to give you a break here and ask only one question. How would you feel if you knew for a fact that those special contributions made by Kelly Gearhart to the community came directly from the proceeds of loans of elderly peoples retirement and pension plans and that these people no longer now have the resources to continue to live in there current situation. What then?


By: Anonymous on 6/22/08

to Former City Employee


Who are you kidding. Gearhart was apparently a Saint. Saint Gearhart, kind of like a Robin Hood, steal from the elderly (retirement money and pensions) and give to the youth (a few construction kickbacks from his on payroll payed or not subcontractors). I believe that in his defence, if you could call it that, he pobably never made money just redistributed it from one class of people to others. If Gearhart had a ligitimate beef with the City he would sue them like anyone else he comes in contact with that he gets any questions from. You my friend must be one of the individuals, or represent some local group, who benefited from this redistribution of wealth of the community. You seem really angry and I hope you feel great pride as your son or daughter runs around the track at the High School that Gearharts investors donated not Gearhart. Or whatever other benefit you or your family derived from the apparent misuse of funds. If Kelly was so badly treated by the City all he has to do is show his stamped permitted plans along with the conditions of approval for a project in question and the subsequate corrections at final for a comparisom to show the blatant mistreatment this scholar has recieved. Minus that I just see him like the majority in this community that have had to deal with him, see him. Not the Saint you see.

By: Anonymous on 6/22/08

Well the truth is out! "Insider" has exposed themselves for the bias of their soul.


First of all, let me explain that I am definitely not Kelly Gearhart!!!!


Second of all, if "Insider" actually had any information to impart, they would never have made the stupid statement, 'If Gearhart prepared deatailed designs and plans and then followed them to the letter then no one could have any corrections.' WHO ARE YOU TRYING TO KID!!!


The City of Atascadero is known far and wide for changing the rules in mid-plan development. It would make the 'Ripley's Believe it or Not' if the City of Atascadero ever followed it's own guidelines to the letter on any ONE occasion. Just ask anyone who has tried to submit a plan to the City.


Once again, it's dump on Gearhart, rather than where the corruption occurs; City Hall.


By the way, I can tell you where Gearhart hid much of his money. 1. The track and football stadium improvements at Atascadero High School. 2. 4-H and FFA animal sales at the Mid-State Fair. and many other projects where he has donated money and manpower to improve the City of Atascadero. What has McKinney donated??


Gearhart has made money in the city, but he has also returned 'millions' in donations to his 'hometown'.


This blog has truly become a joke. You should take it on the road, you could make money. I would imagine that the Comedy Network could use a new act. You could bill it as a “Reality Show”. It is just about as “real” as any of those other choreographed shows.

By: Anonymous on 6/22/08

Looks like to me Kelly is trying once again though this blog to take the microscope off of himself. When you approach others with a stuborn, arrogant, self serving attitude you may start getting reactions that make you think people are out to get you. If Gearhart prepared deatailed designs and plans and then followed them to the letter then no one could have any corrections. If he had a couple of dead plants why not run down to Kmart of Home Depot and pick up a couple of plants. Everybody is always picking on Kelly. Poor Kelly. Those people who provided 2 million in investment money and haven't seen a shovel of dirt turned. Poor Kelly. Look in the mirror and quit trying to do your own public relations campaign with this blog. It's not working. I guess the implication is Kelly paid off McKinney for something. If so this could only be Kelly writing the blog and the only purpose one can come up with is to redirect someones investigation. I only speculate.


By: Anonymous on 6/22/08

It has been rumored that when the FBI was in Atascadero that Wade McKinney and Tom O'Malley were extensively interviewed by the FBI. The prior blog may be a missing part of the whole Atascadero fiasco.

By: Anonymous on 6/22/08

Follow the money and the many LLC's set up to hide the money. Wade McKinney sent some to Lake Isabella to Sue/Tom McKinney trust to hide for him. Maybe payoff monies i am not sure. The other's are under two other names one is called Hertel Investment Group, LLC and Avila Village Inn so good luck, Michael Sihiling has the books on all of this in LA he works for Hertel & Fowler.

By: Anonymous on 6/22/08

That is the truth and the whole truth so help me God. I have had some inside info also. Steve McHarris, the planner mentioned, along with Warren Frace, have had an ongoing battle going on with Kelly Gearhart for years. In fact Kelly Gearhart was once asked about accusations made by McHarris at a city council meeting and told the council that he was untruthfull. The council made no comment so Gearhart stated that he was just a liar (true fact)to put it in simple terms. As usual the council did nothing with the complaint. It is primarily the reason the permit was never issued for the Printery.

Case in point, Gearhart called for a final inspection for one of his projects so that people could obtain occupancy. This was a large project and had homes ready to be occupied. This inspection was right after there had been a severe freeze. The final for the project was denied by McHarris because there were 2 or 3 plants that appeared to be dead from the freeze.

Gearhart improved McCarthy's at Entrada and El Camino Real-over 100 correction items for the outside improvements. All of the plans were submitted by licensed architects and engineers who are more qualified than anyone at the city.

You can have your opinion of Kelly Gearhart but the city of Atascadero has had an ongoing harassment of not only Gearhart but almost anyone that attempts to do anything positive for the city.

Cliff Branch came to town and wanted to develop an entire block of this town. How often do you get that opportunity? Wade McKinney "didn't like him" and Branch left town.

The stories go on and on but I'm getting more and more

pi–sed off as a write this.

The day will come when the corruption within the Atascadero city hall is brought to a head and that will be the ultimate downfall of the city.

By: Anonymous on 6/22/08

It has become pretty clear that there are several contributors to this blog that appear to write under multiple monikers. They appear to set forth a half-truth opinion using one name and then respond in affirmation using a different name. And I would not be a bit surprised if the most frequent of those are the originators of this site, Karen Velie and Daniel Blackburn. When you create ‘slash and burn’ journalism using partial truth and many outright falsehoods you need to make up identities to support your positions.


There is no doubt that some of the local ‘hard-money lenders’ pulled some real shady deals at the expense of their investors.


And the manner in which the City of Atascadero functions is beyond ludicrous, it is criminal. Hopefully, if the FBI really does make a thorough investigation in Atascadero, and criminal indictments are issued, you will see Wade McKinney doing the ‘perp-walk’ on local television.


To make an attempt to hang all of the woes of the City of Atascadero on Kelly Gearhart is STUPID. He is a local entrepreneur, who has attempted to make money, working within the confounding regulations of this corrupt City. When plans are drawn and submitted by certified engineers, working within the guidelines set forth by the City Planning Department, only to be rejected because some planner does not like the specific look of the material it is ridiculous. Many plans are resubmitted time and time again, at a staggering cost to the developer, just to meet the personal whims of City employees. This is the way that the City treats all developers working within the City of Atascadero.


I know of what I speak, I worked for the City of Atascadero for 18 years, and I am glad to be away from the smear of that city government. I worked with McKinney and can tell you that he is not to be trusted.


By: Anonymous on 6/22/08

now we are being supported by the Feds get off your butts and give them as much evidence as you can to aid their investigation.Dates when new "investment proposals" were presented in spite of clear evidence(interest not being paid!)by the same borrower!

By: Anonymous on 6/22/08

to insider says

to search party


Someone else posted with my handle. I did not see Kelly at the bank. For all I know he's still curled up in the corner or in Ohio.

By: Anonymous on 6/22/08

Search Party;

I saw Gearhart at the bank a couple days ago.

By: Anonymous on 6/22/08

I got a call this morning was informed some of the developers your site has discussed and HOB are under a probe and the developer is preparing to file Bankruptcy. He is waiting to get all his assets moved to conceal them that is one reason as someone posted his Lawyer Quit Friday. Great Reporting..

By: Anonymous on 6/22/08

While I'm sure "indictments are eminent," I hope they're also imminent. I also hope a trip to a Cuesta College freshman writing class is in Dan and Karen's imminent future, lest UncoveredSLO never attain the eminence they hope to achieve.

By: Anonymous on 6/21/08

I am curious, has K Gearhart and or family been seen of late?

By: Anonymous on 6/21/08

The cord needs to be cut ASAP with EFI/Hurst. The sooner the better. Anyone who is thinking different is not in the 'know.' When a reciever, trustee,? is in place that's when the FBI and others will make their noticable move. NOT before the investors make their BIG move. It's as though we are waiting for each other. Hurst people, what are you waiting for? EFI congrats to your first step.

By: Anonymous on 6/21/08

ROI


When something goes wrong, we are looking for the guilty party. Karen and Josh claimed that the market's implosion caused their predicement. It definatley not the case. Vanguard, another local lender having problems caused by the market turned south. They are following the rules and investors in their programs are getting 85 – 100% of their investments back. It is true that interest payments have been cut or eliminated on some loans, but the way their business was running and being handled, they wil come out well. That is an evidence that investing in hard money lenders is a good business for everyone if handled correctly.

Karen knew her problems for a long time and still was getting new money and looking for new projects. She had to keep doing it to avoid collepse years ago.

Any enforcement agency will take its time to investigate before making a move. They can't just act on suspicion and complaint until real evidence is uncovered. With the initial step of an "independant audit" in place some items will discovered and turned over to the Feds or others. Unfortunately, it is not enough to stop the bleeding and stealing whats left of the money in Karen's hands.

More needs to be done and hiopefully will be forthcoming soon.

The feds action is in place but will take time.


By: Anonymous on 6/21/08

to Don't thank Kelly


The City deserves an admonishment for turning a historical renovation over to such an unqualified individual thats for sure. As to Kelly's effort to move the project forward he failed to provide the expertise to get the job done and for that he and he alone is responsible. He wanted to do whatever he wanted to do and failed to assemble a proper team to provide adequate materials to get permits from the beginning. I don't believe he even has a project Architect to date which would be the first requirement and he only got a historical consultant which was a requirement after the City hired one for him and he didn't want to take the advise that consultant provided to him at great expense to the City so he hired his own consultant which he previously said he couldn't aford to fight the consultant the City paid for.(Typical Gearhart) His structural engineer while a good local engineer is no way geered up to provide the expertise and drawings to move this project forward. If Kelly wants to blame the City for holding him up he would have to make a more legitimate effort on his own part. If anything the City was too easy on him which ultimately created the situation we're in today. Kelly wanted to treat this thing like a residential remodel not the historical renovation of a registered historical building that it is. If proper plans were prepared with proper consultants the permits would have been issued years ago.

By: Anonymous on 6/21/08

"…despite the pair’s knowledge that the funds were in financial distress, they continued to paint a rosy picture to prospective investors." Karen and Josh, guilty as charged.

By: Anonymous on 6/21/08

Thank Warren Frace and freinds for the status of Atascadero. Kelly Gearhart ALWAYS wanted to do the Printery. Frace and McHarris stonewalled the whole project attempting to extort more and more out of Gearhart.

We, the taxpayer, will be paying for the Printery when FEMA wants their money back and then we have to pay all of the attorney bills for McKinney, Frace, McHarris and the council.

By: Anonymous on 6/21/08

to the park?


Well its not actually a park. Its just a lot that has no development rights that the planning commision and CC in thier infinate wisdom voted that Kelly Gearhart would landscape, fence and maintain in perpetuity. How could that ever have worked. Waren Frace how far is your head up your ass to have allowed that to be proposed. And the Printery how about that little hanging thread. Its not just the investors that will be paying for Gearharts mistakes the City will take a big bite themselves with eyesores that will take decades to erase. Thanks Kelly!

By: Anonymous on 6/21/08

Who's going to take care of the park? The damn city ought to be taking care of the parks, that is what we pay taxes for. Now that the city has finally run all of the developers out of town they will no longer have anyone to extort. Fortunately Ellen Beraud says that we have $11,000,000 in reserve so fortunately the city will be able to anty up and take care of their responsibilities.

By: Anonymous on 6/21/08

to ROI


How do you not know Gearhart has not been funneling his loan proceeds to Ohio to build a nice little retirement getaway. In otherwords a life in Atascadero planned to turn to crap and a life in Ohio built on the Kelly charm. And who's going to take care of that Gearhart park behind the Circle K off HWY 41


By: Anonymous on 6/21/08

It's about time, if, in fact, the feds and others are doing something about our ghastly local lending brokers; EF, Hurst and maybe others. Rumors have been flying for many months about a lot of things (ie Gearhart is broke and leaving for Ohio-some man of the year! I wonder which pea brains voted for that).


We have a huge mess with local brokers and their darling builders who stole perhaps hundreds of millions from their clients-where is the money? Where are the projects? Very simple; a catatonic dysfunctional dyslexic 9 year old fool could figure this out- the brokers stole the money all the while violating every element of their license and operating agreements with investors.


State and local authorities have been slow as molasses to look into this disaster. If not for U SLO we would still be in the dark ages-and disconnected. They gave us the greatest gift-knowledge and the focus to network around. I say send them some money. Ask your local store to advertise.


For those suffering from being ripped off by any local Trust Deed lending broker there is help. Your best bet is to network with your co lenders and other clients of your company to compare notes.

File complaints with the DRE (dept of real estate) and DOC (dept of corporations), both are eager to hear about your situation. Read your loan docs to see how poorly your broker behaved.


For info, especially for Hurst refugees, you can contact us at rippedoffinvestor@yahoo.com. We are actively pursuing strategies to recover assets-and repay our broker for all his kindness.


Do not sit on your hands, counting on the brokers to work things out. They put you in this mess, why would they get you out of it? They are thieves, most of them. They have stolen the futures of thousands around here through mismanagement and fraud. Do you think that FBI task force would bust anyone for the market downturn-no. This article is about fraud, not bad luck or timing. There is plenty of greed-ON THE PART OF THE BROKERS. The investors have been robbed, and many have little time and energy left to put up a fight. Those who do-should.


By: Anonymous on 6/21/08

Yep, I'm making another donation now. Please do everyone! I've been told the FBI and DOC does watch this site. If every would just post what they knew, it would make the agencies job so much easier. The present and future to helping solve mysteries is on the net and blogs. Thanks so Karen and Dan! Keep up the good work!

By: Anonymous on 6/21/08

You have UCSLO to thank for breaking the EFI/Hurst stories, as well as many others you would never see.


I urge you to give a little to this site.


Without it we get no real reporting and the FBI does not get involved in these cases.


Agree or disagree, we need this information exchange. Imagine us with out it???


I am not an investor, but do believe we all owe something to UCSLO.

By: Anonymous on 6/21/08

Karen Velie


You are onto somthing bigger tha the county. Keep it up its a matter of time

By: Anonymous on 6/20/08

The information in this story was gleaned from press releases and interviews. On updates that Dan and I write, we often post under the assumption that as UncoveredSLO.com’s editors, you will know it is our work. When we post information from other writers, we credit the publication.


By: Anonymous on 6/20/08

Who wrote this story? It has no credit. You quote Laura Eimiller as if you talked to her. Did you? Come on Dan and Karen. I frigging hate websites and blogs that steal from the people who produce these stories and act like it is their own. I believe that is called plagerism. Many portal sites like topix do the same. Let other people do the real work and then pretend it is yours. Are these your words? If so I apologize. If not stop stealing. Believe me I have no sympathy for the mortgage vultures and banker bandits. I hope they burn in hell (or paso). I would gladly dance on their graves.

By: Anonymous on 6/20/08

THANK YOU to uncoveredslo for doing this report, and giving us some good contacts to help get Jay Miller and Courtney Brard investigated!!! Their time will come

By: Anonymous on 6/20/08

To Insider –

That's just what we were thinking – who is going to throw who under the bus first? And the employees will be forced to testify too. Many current and past employees may very well be implicated and who do you think they will be interested in keeping out of jail? Karen and Josh have told so many lies, they will trip up when it comes time to testify. No one would be able to keep all those lies they have told straight. Plus, when Mel and Don get their subpoenas, whose butt do you think they are going to want to save? Witnesses will be elbowing their way to the front of the line. Sad thing is, we won't be paying for Karen's and Josh's attorneys any more. We won't be paying for their anything, period.

By: Anonymous on 6/20/08

This is gonnnnner sting real gooooooood….We knew this was in place months ago. Now you have uncovered it good work. HFL Express, LLC Doya Partners,Your the first, that is why local Lawyer Adam Danner quit this morning from representing bad boy developer Hertel and Fowler aka SLO-HAAS, LLC RW Hertel & Sons, IOnc., Cookham Holdings, LLC Verdot Group, LLC , Atascadero Ventures, LLC and the list goes on… Indictments are next.

By: Anonymous on 6/20/08

to Validated


Your right. There was a time where they might have gotten away with admitting thier errors and offering whatever restitution they could muster. That time I think is long past. Its hard to get these government agencies and procecutors in but once you have them in forget asking them to back off its like trying to get dog crap off your foot. You just can't do it. Maybe Josh can turn on Momma.

By: Anonymous on 6/20/08

Dance and do the jailhouse rock, oooooo, dance and do the jailhouse rock, oooooooo, dance and do the jailhouse rock!

By: Anonymous on 6/20/08

Too bad the judge didn't order Karen and Josh to turn in their passports – I'll bet they're searching "Expedia" as we speak. Now that it's almost over, Karen and Josh, have you ever thought to yourselves, "Gee, maybe if we'd just fallen on our swords and admitted that we made mistakes, but that we had the personal assets to make everything alright (by selling our recently purchased house in Cayucos, the two gas stations, the office building, the olive ranch – and that fancy Italian olive press we're so proud of – along with the other properties we bought with the money you investors trusted us to invest but that we took for ourselves instead and then defaulted on the loans that we were supposed to fund… Maybe if we'd done all these things and been polite to you investors who trusted us instead of lying to you and belittling you and telling others that you're just a local nutcase…. Maybe things would be different?"

NOT!