More state allegations heaped on EFI

July 1, 2008

The State Department of Real Estate (DRE) has filed accusations against hard money lender Estate Financial (EFI) of Paso Robles for eight causes of action that include “misrepresentations and false promises made to investors and acting fraudulently and dishonestly in making under-secured loans.”

The accusations were detailed Friday on the state agency’s Web site.

The State Department of Real Estate (DRE) has filed accusations against hard money lender Estate Financial (EFI) of Paso Robles for eight causes of action that include “misrepresentations and false promises made to investors and acting fraudulently and dishonestly in making under-secured loans.”

The accusations were detailed Friday on the state agency’s Web site.

EFI president Karen Guth holds a real estate license; her son and partner, Josh Yaguda, is a licensed real estate broker. The pair courted investors to fund construction loans allegedly secured by real estate. Approximately 3,000 Californians have invested approximately $350 million with EFI.

To encourage investors, Guth distributed an EFI brochure claiming investors would receive trust deeds filed in the county and title insurance. However, according to the DRE’s list of accusations, Guth and Yaguda failed to secure investors funds through deeds of trust on various loans even though they disbursed funds to construction accounts.

In addition, the DRE claims that officers of the troubled North County lender co-mingled funds, paying from one investment to fund another.

On July 12, 2007, EFI’s securities permit with the Department of Corporations (DOC) expired; EFI, however, continued to offer, sell, and issue securities for three months before renewing their license. On May 28, 2008, the DOC revoked EFI’s securities permit.

Prior to suspending or revoking a license, the DRE must first file allegations listing verified charges. The court then allows Guth and Yaguda 15 days to request a hearing, or they waive their right to be heard.

According to the DRE, EFI made unsecured loans; willfully disregarded or violated state real estate law; demonstrated negligence or incompetence in performing an act required to hold a state license; and engaged in other conduct… which constitutes fraud, dishonest dealing, or incompetence.


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10 Comments

  1. ccn_debate says:

    Member Opinions:
    By: Anonymous on 7/7/08
    BEBE Says

    Most employees will not suffer any consequences of Karen and Josh's actions, Karen and Josh do not keep employees long. Most are fired for asking too many questions or quit because they were tired of the tirade they receive daily from Karen.

    The employees that have stayed with Karen aren't smart enough to question their dealings or if they have they have been threatened, yelled at,cursed at or been told they will be fired or sued.

    Real nice place to work for, Huh. She fired one guy a week or so before Christmas, He has little kids. Her timing was such that she wouldn't have to give him a Christmas bonus.
    By: Anonymous on 7/7/08
    yeah I hope her accountant is not doctoring anything up, we know wher is lives!
    By: Anonymous on 7/7/08
    hi again
    yes i know the employees got paid well beyond the average pay for the north county positions of a similar nature. awful ms guth bought their loyalty with money but they should be on trial soon for collusion to defraud. also her accountant may need to defend his hotsy reputation as a high priced cpa, if he has in anyway made any part of this scheme workable for Guth and her dear son Yaguda. may they all go down together. some investors are volunteering as what..advisors to these crooks

    (0) 0 Total Votes - 0 up - 0 down

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