State regulators cancel EFI sales permits

June 9, 2008


Estate Financial Corp. (EFI) of Paso Robles can no longer solicit nor accept investor money because the troubled lender’s state permit to do so has been revoked.

Specifically, regulators from the California Department of Corporations (DOC) have stopped the firm from selling mortgage fund securities and part interest in real estate investments. The revocation follows on the heels of an earlier suspension.

“We revoked their permit to raise funds,” said DOC Director of Communications Mark Leyes. “They can continue to service existing funds and investors. It does not shut them down.”

San Luis Obispo County’s District Attorney’s Office is investigating numerous complaints from county residents and others who believe their principal investments with EFI have been misused. Local prosecutors are working with DOC investigators to examine the allegations.

“We are doing what we can to make sure the district attorney has what they need to do their job,” Leyes added. “The revocation is just one piece of the puzzle. If there is malfeasance that rises to the level of criminality, it will be up to the prosecutors.”

A top county prosecutor agreed.

“The DOC is also looking at more aggressive or criminal acts they can refer,” said Deputy District Attorney Steve Von Dohlen. “Then we review and decide whether or not to file criminal charges or more investigation.

Prior to taking funds from an investor, the permit required EFI’s owners, Karen Guth and Joshua Yaguda, to provide prospective investors with a questionnaire regarding their individual financial standing. The DOC concluded Guth and Yaguda failed to fill out the required forms. Guth also failed to disclose that she was a partner in more than 15 percent of EFI funded construction projects as stated in a circular distributed by the EFI.

Sources contend Guth knew she was over her allotment and had started to dump properties. A check of county records for properties having “EFI” listed as the grantor or the grantee showed 267 records changes in 2008.

Yaguda declined to comment on the state agency’s permit revocation and referred a reporter to EFI’s Web site.

EFI is one of a number of hard money lenders currently under fire in SLO County. Hard money lenders specialize in real estate-backed short-term bridge loans. These high risk loans are based on the value of the underlying asset rather then the borrower’s credit rating. EFI, during better times, paid investors approximately 12 percent interest on their investments.

On April 28, the DOC suspended EFI’s permit while the agency investigated an onslaught of charges. In response to the allegations, EFI requested a hearing to challenge the suspension, but later withdrew the request.

EFI stopped making interest payment last fall and numerous investors concerned about their money filed complaints with the regulatory agency.

In response to allegations Guth and Yaguda failed to protect investors, the San Luis Obispo law firm of Sinsheimer Juhnke Lebens and McIvor has invited more than 1,600 investors to attend a meeting June 17 at the Alex Madonna Expo Center to discuss replacing the $170 million fund manager.

Guth and Yaguda fired back with a letter last Friday claiming the law firm, required to have 10 percent of fund investors interested in the meeting, represented only a half dozen investors. The mother-son duo claimed the law firm dis not have the expertise to manage the fund. In the letter, EFI did not mention that permits had been revoked the previous week.

Tags:, district attorney, EFI, Estate Financial, San Luis Obispo County

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Member Opinions:

By: Anonymous on 7/25/08

Caring son: your father will likely be removed from the suit; insestor liability is limited. Check your contracts from EF; you should have folders with contracts for each loan he partiicpated in. At the beginning, plaintiff lawyers typically name everyone they find associated with a case, without evaluating legal liabilities first. Names are easier to remove than to add to a suit. Really, the plaintiffs want the loan fully funded, which will not happen; next to claim damages from Estate Financial and Karen and Josh especially if they comingled funds, as suggested by earlier blog comments, which is strictly illegal. Only one of the 15 loans my parents were involved in is current in the sense of paying regularly. Some of the builders have contacted me about individual projects with various proposals for completion or deed-backs. Watch your mail; evaluate the proposals carefully so that you don't sign your intrests away, but take only actions to secure them.

By: Anonymous on 7/23/08

Question for Anonymous

I am trying to get up to speed on this mess as my 88 year old father got way too deep into EFI investments. My father was named as an investor defendant in the Colsolidated Properties lawsuit. Can you explain what this means?


By: Anonymous on 6/17/08

Anything that brings light to Karen's deeds is not a loss.

Also, no one in their right mind will ever invest with her again.

Maybe she and Josh can go sell used SUV's

By: Anonymous on 6/17/08

this is a loss for everyone…just wait and see what this will cost

By: Anonymous on 6/17/08

BTW, no sarcasim meant below. GOOD JOB TO THE FREDRICKSON TEAM!

By: Anonymous on 6/17/08

karen's most likely to BK somewhere in this process. That will stomp out the auditor or reciever. At this point a trustee will be court appointed.

Good job today to the Fredrickson team!

By: Anonymous on 6/17/08

This was definitely not a "win" for Karen. The judge appointed an "evaluator" (you can bet that this was not suggested by Karen's attorney). This gets us in the door where the evaluator will have full unencumbered access to all the books. If Karen is not forthcoming with whatever the "evaluator" demands, she will be in violation of the order of the court. The Judge asked to be e-mailed if there were any problems with cooperation. He will take care of any problems she presents immediately. Don't even think that Karen had any control over anything that went on in that courtroom today. At the end of 30 days, once the findings are presented, the Judge will then decide on any further action, for instance should a "receiver" be appointed. After the "evaluator" presents his findings (step 1), the receiver will be appointed for not only the Fund but also EFI first trust deeds (step 2), and then Karen and Josh go to the BIG HOUSE (step 3).

By: Anonymous on 6/16/08

To Connected: Please keep in mind that there is a significant difference between an independent auditor and a receiver. My guess is Karen or Karen's lawyer suggested it and then argued the position is just about the same as a receiver. This is not a common occurance, taking down a big company like EFI. I can't imagine the judge and local lawyers involved are familar enought with the process so instead they would like to proceed with small cautious steps. I'm guessing our local legals have been duped by this small little name change 'receiver' to 'auditor.' Time will tell. Why would the judge give you a receiver and rename it as an 'auditor?' Why make it sound so benign? An 'auditor' is and 'auditor' and a 'receiver' is a 'receiver.' There is a disconnect here. I'm still suspecting a potential win for Karen Guth.

By: Anonymous on 6/16/08

To Anonymous:

I heard Roger Frederickson say that the auditor will be able to go over the fund records and Estate Financial, Inc's records.

By: Anonymous on 6/16/08

To all fund investors,


Today was a defeat for Karen.

We have an independent auditor

{the receiver} appointed.

This person is a bulldog and wont miss anything. He has legal access to all books records accounts and transactions. If he is denied anything he will report directly to the judge.

He will find the smoking gun.

This is what we wanted, the judge just gave it to us with a different name.

As far as tomorrows meeting.

This will be the Josh and Karen show. There will not be any presentation form the legal team.

Now that legal action action is under way our attorneys can not participate.

There will be NO vote.

Karen was required to send all investors proxy ballots and she did not comply with her own rules so any vote is invalid.

real information will not be discussed. Hopefully we will receive a copy of todays ruling but dont expect any legal advice.

Karen and Josh will control the meeting and spin todays events. No one will be there to challenge their statments.

This meeting may be a waste of time. You must deceide if it is worth your effort.

By: Anonymous on 6/16/08

People, Karen is done anyway. She can no longer do new business. Remember her permits were pulled. Do any of you think the DOC will give them back? I don't. Literally, this is liquidation time. All that is left to do is sell. She certainly can't buy. Sure she can use the proceeds from sales of one property to improve another but again, she'll have to sell that too. The difference between a receiver and an auditor to the investor is, now with an auditor in place Karen can keep paying herself. With a receiver, she wouldn't be able to do that – the cord would have been cut. Why even wait 5 weeks? Even then, the process to remove her after 5 weeks may still take more time beyond July 22. Remember, the auditor is only auditing the Fund and not EFI. This is key information! They are two seperate entities. EFI will have to be dealt with as well and that will take even more time later. I highly doubt 5 weeks will be the end. It very well may take much longer. Estate Financial Inc. needs to be taken down as well. Perhaps another hearing and many days of preparation after July 22. Be prepared for another ride!

By: Anonymous on 6/16/08

The evaluator will not be buffaloed. The Judge has declared that she will cooperate OR ELSE! Karen better prepare to meet her maker. She will not be able to hang up on the evaluator, she can't walk out on him, she can't denigrate or speak condescendingly to him or throw him out of her office. Her power is gone. Thank you to the few brave souls who stood up and paid their money to take her down. We now stand a chance of recovering some of our investments that we trusted Karen to manage.

By: Anonymous on 6/16/08

I don’t know the legal difference between an auditor and a receiver. What I do know is whether it is an auditor or a receiver, they have to report to someone and I am willing to bet that someone is Judge LaBarbera.

Something you can take to the bank is that a judge will have their orders complied with. If Karen treats the auditor with the overwhelming arrogance and condescension that her investors are used to, then the auditor will go back to the judge. The first time Joshua starts yelling obscenities like he is actually about something, the auditor will go back to the judge. I know from personal experience that Judge LaBarbera is not a stupid man, nor can he be intimidated. Karen and Joshua will fail to give the auditor an answer to a legitimate question, the auditor will take their two bit, flawed magic act back to the judge and it will be a whole new ball game.

Remember, Karen wouldn’t be in this jam if she didn’t think she was so smooth and slick that her investors would always believe what she said. Given time, Karen Guth’s personal conceit regarding her own intellectual superiority will be her downfall, whether with an auditor, receiver or a judge.

I would like to offer my congratulations and heart felt appreciation to Roger Frederickson. Once the truth starts to leak out, Karen won’t be able to stuff it back in her safe no matter how many public relations firms she hires.

By: Anonymous on 6/16/08

Have faith. The "evaluator" will have complete access. If Karen does not comply, the judge said in open court, "e-mail me". The "evaluator" is experienced. He has dealt with companies much larger than Estate Financial. In the meantime, the Department of Real Estate is breathing down her sweaty neck and their ruling is pending. All of her misdoings will be brought to light. She is done.

By: Anonymous on 6/16/08

To Receiver: If you are truly a receiver, please give us a remedy. Any suggestions will do. We need a back up plan. I realize today was a step in the right direction but it could also be two steps backwards if the auditor isn't given enough access to the books to do his job in the short period of time he has. EFI is a large company and I've been told one auditor and 5 weeks is not enough man power and time to get much results. If he's buffaloed too much he may not have enough hard facts to change the judge's mind.

Receiver: What is the quickest, most efficient way to stop this mess and get Karen out for good?

By: Anonymous on 6/16/08

Thank you to the plaintiffs that have stepped up and actually put their money where their mouth is. Wheels are turning and time is running out. One step at a time and teh auditor is a step in teh right direction.

By: Anonymous on 6/16/08

Today was a success. We have an independent auditor to review the books and records for the fund and Estate Financial, and prevent them from making any transfers of any assets. I am relieved. They are backing her against the wall adn she knows it.

Good job Frederickson and team.

By: Anonymous on 6/16/08


It will take a financial commitment by those of us who can afford a few thousand dollars and have the gumption to stand up (face to face) to Karen Guth and Joshua Yaguda.

Two, three, four people cannot do it. It will take far more than that.

The effort in court today failed. Tomorrow's meeting is merely going to be a platform for Karen and Joshua

to tell us that they "aren"t going anywhere", haven't done anything wrong and love those of us who keep our mouths shut. This meeting is going to be a fiasco -waste of good time and money.

Come on friends – somebody put a group together – 50 or so people, get a good attorney to advise you, and do something smart.

ENOUGH BLOGGING, LET'S DO SOMETHING. Yes, I will put up money – $2,500 for a good idea. Anybody with me. Say so here with your email and I'll contact you. Promise.

By: Anonymous on 6/16/08

It will be interesting how Karen will spin todays decesion.

By: Anonymous on 6/16/08

An Independent Auditor is an "Auditor". He has no authority to manager either the fund or EFI.

He only has the authority o look at books and records Karen gives.

A Receiver MANAGES THE BUSINESS under the auspices of the court who appointed him/her.

Sorry friends but Roger failed and Karen wiggled out of the rat hole again.

By: Anonymous on 6/16/08

To Anonymous: Why should I trust you? If you have already researched it and spoke to receivers and double checked the information I WOULD believe you. There is a difference between receiver and independent auditor. Give me reason to believe.

By: Anonymous on 6/16/08

Trust me. The "independent auditor" is a "receiver". This was a clever manipulation by Frederickson. This was not a "win" for Karen and her son. SHE IS DONE and she knows it.

By: Anonymous on 6/16/08

I do applaud Roger for getting as far as he did today. Congratulations! There is a caveat, though. The courts sure made it sound like the receiver was appointed today. But, both parties agreed to call him an 'independent auditor.' This is not a simple name change but a serious lack of power for him. He can no longer lock Karen's bank accounts and look into the situation as forensically as before. He asks for information and she will feed him what she wants. The difference between an auditor and receiver is large. If this auditor can't get the information he needs within the realm of his limited capabilities and time frame, then Karen may come out of this in a good position. What are the odds the court will give the investors another chance to try again. Most likely not – not at this level. Under the circumstances, this is hopeful for Karen Guth's 9th St Paso Robles longer term position. Say a prayer.

By: Anonymous on 6/16/08

Do you think Frederickson would appoint an "average" receiver? Karen, you are going down, girl, along with your boy. The door has been opened and that's all that we wanted. You, my dear, are toast.

By: Anonymous on 6/16/08

I told you, I beat the rap again and I did. I'll feed the "independent auditor" from the palm of my hands as I please. My papers are such a mess that no average person can make any sense of it. So what next? In five weeks you'll have nothing again.

By: Anonymous on 6/16/08

To all investors.

As most of you know a legal action has been filed against EFI to put in a temproary receiver.

Last Friday the hearing was postponed until today, Monday at 1:30 p.m.

Any one who wants to support the effort to get control of your investment should show up at court today.

The Hearing in at SLO Superior Court Department 2, heard by Judge LaBarbera.

The support of every person is important so please try to be there. Be early the courtroom is small.

By: Anonymous on 6/16/08

My, my. A quiet peaceful Sunday afternoon,evening and night on the blog. Is this the calm before the Monday's storm? Let's hope!

By: Anonymous on 6/15/08

If you want to see if you were named on the Colsolidated Properties lawsuit that was filed in December 2007 and that Karen settled 2 weeks later, do this:

type in

scroll down to "Business"

click on "More"

Scroll down to "PDF Biz Buzz: Suite seeks receiver for Estate financial and click on the box in the upper right hand side of the article that says "Biz Buzz PDF Court & other related documents"

Scroll through the Consolidated Propertis lawsuit (there are several others there as well). You will see that the individual investors are named. You may be one of them.

By: Anonymous on 6/15/08

INVESTORS; Pay close attention to Karen Guth’s comment in Friday’s Tribune article!!

“Karen Guth, Estate Financial’s president, said the law firm is circumventing the process of a pending investor vote that would decide if she and her son, firm Vice President Josh Yaguda, should be replaced as fund managers”.


“Guth said the law firm is going around the investor vote process because it doesn’t believe a majority of investors would agree to wrest control of the fund”.


“Guth insisted the company is making information available to her investors as fast as possible”.


“She also warned that the assets of the fund would be depleted by the expense it would take for the “receiver to accomplish his tasks.” ,”



By: Anonymous on 6/15/08


Anonymous says:

I am disturbed. wouldn't you be in my shoes?

At least you have shoes. I lost not only my shoes but my shirt(s) also.

By: Anonymous on 6/15/08

I want you to know that every time your "ESTATE FINANCIAL UPDATE" is posted, I am reading it very carefully. All incosistency is pointed out (in simple terms it is called a lie) and will use it against you when your day comes in court. This is not an empty promise and you will not be able to delay it forever. If we are wrong, you will have a chance to prove yourself. On the other hand, remember, we will use every evidence documents against you. All those douments so far been hidden from examination will come tolight. You have caused so much pain and grief that it is fair to return the favor. Your circle of friend will shrink further along with the suporters you think you have. I am looking forward to Tuesday meeting with great interest what explanation you come up with. Oh, I almost forgot! It makes no difference anyway. You just talk even if a few belives it. Knowing your way of operation, I suspect there will be applause for you in the crowd that is been paid for with our money.

By: Anonymous on 6/15/08

Anonymous says:

To MJC Im curious what you mean by 'they force you to transfer your investment money

Once the money got into EFI account, you have agreed Karen to decide how it was to be invested and where. Investors had a choice to place the funds and if you read the "circular". Investors had no choice of getting it back other than on Karen's term. High yield and smooth talk was just too hard to resist.

With all that said, if Karen lived up to her own stated terms, most of the funds would have been there, maybe with some haircut but not the way it is today. Her insatiable apetite for wealth and power did everyone in for now. She used many LLC to take money that looked legitimate on the surface. Her relentless resistance to open the books is evidence of FRAUD on her part. However, the orchestra is in session.I hope she follows this site and takes notice that all her and Josh's actions being followed with great interest.

No PR firm can smooth over reality. Hr statement of appriciation from all those investors is false or she is dillusional. Ofcourse, there are many who still have no clue tothe extent of the problem. On Tuesday, she will explain it all with a sraight face and again we are just nothing more than sore losers.

By: Anonymous on 6/15/08

Anonymous says:

I am disturbed. wouldn't you be in my shoes?

By: Anonymous on 6/15/08

To MJC Im curious what you mean by 'they force you to transfer your investment money into a vehicle or security investment……that leave you completely unprotected from them.." Can you explain in simple terms?

By: Anonymous on 6/15/08

Anybody who takes someone's money and does not live up to their agreements is a BAD person. Especially when that money is there entire savings, everything! Then once they have your money the force you to allow them to transfer your investment money into a vehicle or security instrument almost 2 months after you have funded yor investment, that leaves you complety uprotected from them and their potentially bad faith business practices they then become monsters.

By: Anonymous on 6/14/08

FYI, when you see Karen Guth writing in, be certain it is not truly Karen Guth. Some people are really upset and their emotions are stirred. This has been hard on many people.

By: Anonymous on 6/14/08

to karen guth:

you are a very disturbed woman, i sure hope someone is forwarding her blog entries to the doc, dre and the da, she so sick she gonna be her own worst enemy. she is out right confessing to stealing your money

By: Anonymous on 6/14/08

I'll prove to you on Monday that I can still beat the rap. Ha Ha Ha

So far I've done the impossible. Nothing changed, just another day. I still got your money and you haven't benn able to catch me.

By: Anonymous on 6/14/08

Ron Cooper says:

Thank you Ron for all you have done so far. Between you and UncoveredSLO we have come a long way. Whatever the judge will decide on Monday, it is only a small step toward a resolution. Unfortunately, the DUO (unless others are involved)still milking our money. Will they be able to enjoy it, I don't think so. If they skip town I know I will not rest until they are brought to justice. If they stay to face the music, I'll be in the orchestra until the finalle. I wish their nights be filled with no sleep as we have lost many of them. Soon we'll be able to slepp and they will not. Its not if but how soon.

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