Judge ices EFI fund property sale proceeds

August 6, 2008

By KAREN VELIE and DANIEL BLACKBURN

A federal judge presiding over Estate Financial Inc. (EFI) bankruptcy hearings declined Tuesday to authorize disbursement of funds from a pending sale of investment property from the troubled lender’s portfolio.

U.S. District Court Judge Robin Riblet instead ordered proceeds from the sale placed in a segregated account to allow trustees time to weed through a mountain of documents.

The Paso Robles lender’s corporation and investment fund have been placed in voluntary and involuntary bankruptcies.

A group of investors had asked Riblet to disburse the proceeds of the Base View Court Estates project in San Marcos, currently in escrow. Thomas Jeremiassen, the trustee of Estate Financial Inc. (EFI), however, asked the judge to delay distributing the funds.

Riblet, on vacation in Canada and speaking to attorneys by telephone, agreed with Jeremiassen, who was appointed to manage the trust only nine days earlier. At the same time, Riblet appointed Bradley Sharp to watch over the Estate Financial Mortgage Fund.

“It is like an orderly liquidation,” said Steve Gardility of Encinitas, a builder who did significant business with Guth. “It is a better chance to get money back than a Chapter 7. She (Judge Riblet) had the records and knew the subject; she is sharp.”

Utilizing a number of hard money strategies, EFI principals Karen Guth and Joshua Yaguda enticed investors with the promise of high interest on their investments, which funded short term construction loans. Last fall, the company stopped making interest payments, and Guth and Yaguda blamed a downturn in the real estate market for catapulting EFI into a temporary financial funk.

More than 3,000 investors placed more than $300 million into EFI construction projects. Guth and Yaguda received a one- to two-percent monthly fee for fund management, along with mortgage servicing fees on the fractionalized loans. Sources claim the pair was using funds slated to build projects to fund other businesses they own.

While at the helm of EFI, Guth and Yaguda accumulated a wealth of holdings, including gas stations in Templeton and Morro Bay; a winery and Pasolivio Olive Ranch in Paso Robles; and numerous condominiums, homes, and commercial properties scattered throughout the county. They also own a stable of expensive automobiles.

Even during the bankruptcy proceedings, a bevy of regulatory agencies and criminal investigators continue to probe allegations that Guth and Yaguda misled investors and comingled funds in a Ponzi-style scheme.

Within the next few days, U.S. Trustee Marjorie Erickson is expected to announce approval of a creditor committee comprised of creditors and investors to serve as an advisory body to the trustees and the court.

“The committee will meet with the trustees, look at properties and their stages, and suggest which properties should be finished, and which to sell out,” Gardility said.

Gardility, along with Dennis Klassen, Arroyo Grande; Jordana Cooper, Calabasas; Jim Scott, Rancho Palos Verdes; and Andrew Berwick, Santa Barbara, have applied to the court for membership on the committee.


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22 Comments

  1. ccn_debate says:

    By: Anonymous on 9/2/08
    Great.

    How does Ron Cooper fit inyo this. His name keeps coming up but he is not an investor. Why should I care what this guy thinks and does?
    By: Anonymous on 8/27/08
    Roxanne says:

    I checked and it's true. Uncoveredslo.com's blog is highly searchable. Due to this, I'd like to post the below.

    If you are searching for information about Karen Guth, Joshua Yaguda, and Paso Olivo, you should read the statements below.

    Karen Guth and Joshua Yaguda have allegations against them supported by the Department of Real Estate and Dept of Corporations for defrauding investors in their other company Estate Financial, a hard money lender.

    The ongoing allegations which are being investigated by the FBI, DOC, DRE, DA include fraud, dishonest dealing, co-mingling funds, failure to secure loans, negligence, and more. Thoughts are Guth and Yaguda swindled over 2500 investors, many elderly, from their savings by misrepresenting their company. Guth and Yaguda misappropriate many funds in the 300 million plus investor-built portfolio and then walked away claiming bankruptcy. Yes, they flew away in their 'golden parachutes' with much money unaccounted for. Paso Olivo employees were paid by with Estate Financial checks. Karen and Joshua have willfully disregarded or violated state real estate law and investors have suffered immense losses due to their activity. Trustees are currently sorting out the mess. However, Karen and Joshua are free to roam. That is, until they are tried criminally in court. Most concur they will serve significant prison time, not for a mistake but for purposely breaking the law for their own personal financial gain. What a wonderful way to make money to do what Karen and Joshua love best – olives. Please learn more before you support their olive ranch! Please read the below link:

    http://www.uncoveredslo.com/?id=139&showEntry

    Key words: Paso Olivo Oil, Karen Guth, Willow Creek Olive Ranch Tasting Room, Paso Robles California, California Olive Oil News, California Olive Oil Council, LA County Fair Olive Oil Winners, Joeli Joshua Yaguda, 140-acre ranch, Olives101.com The Olive Oil Source, COOC Olive Oil, Nancy Ash, Charles Crohare, Paso Olivo Olive Oil, extra virgin olive oil, award-winning estate olive oil, Guth / Yaguda Family, criminals

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  2. ccn_debate says:

    By: Anonymous on 8/18/08
    New article on Estate Financial:

    http://www.uncoveredslo.com/?id=163&showEntry
    By: Anonymous on 8/14/08
    Anybody know the details to the below case?
    By: Anonymous on 8/14/08
    County of SLO Superior Court has another Karen Guth LLC trial
    Carol Deane LLC CV040150 Case Management Conference
    By: Anonymous on 8/14/08
    County of SLO Superior Court has another Karen Guth LLC trial
    Carol Deane LLC CV040150 Case Management Conference
    By: Anonymous on 8/14/08
    State of California CSLB has now revoked the Contractors License of local Builder RW Hertel & Sons, Inc. who is now the subject of several major State and Federal Investigations
    By: Anonymous on 8/14/08
    You were right says:

    UNCOVSLO, I read the Trib this morning and your site first informed us via the blogs of

    If it was for the local media, most would be still in the dark about EFI. We would have learned about it when everything is cleared out. Thank you UncoveredSLO

    (0) 0 Total Votes - 0 up - 0 down
  3. ccn_debate says:

    By: Anonymous on 8/18/08
    New article on Estate Financial:

    http://www.uncoveredslo.com/?id=163&showEntry
    By: Anonymous on 8/14/08
    Anybody know the details to the below case?
    By: Anonymous on 8/14/08
    County of SLO Superior Court has another Karen Guth LLC trial
    Carol Deane LLC CV040150 Case Management Conference
    By: Anonymous on 8/14/08
    County of SLO Superior Court has another Karen Guth LLC trial
    Carol Deane LLC CV040150 Case Management Conference
    By: Anonymous on 8/14/08
    State of California CSLB has now revoked the Contractors License of local Builder RW Hertel & Sons, Inc. who is now the subject of several major State and Federal Investigations
    By: Anonymous on 8/14/08
    You were right says:

    UNCOVSLO, I read the Trib this morning and your site first informed us via the blogs of

    If it was for the local media, most would be still in the dark about EFI. We would have learned about it when everything is cleared out. Thank you UncoveredSLO

    (0) 0 Total Votes - 0 up - 0 down
  4. ccn_debate says:

    By: Anonymous on 8/13/08
    BIG money says:

    anonymous

    So the defaulters ate at the trough, mismanaged(to be polite) the money and now you think the lenders should give them more?

    You must bitter, so your ignorance is over looked.
    By: Anonymous on 8/13/08
    UNCOVSLO, I read the Trib this morning and your site first informed us via the blogs of the demise of Atascadero Ventures, LLC aka Las Lomas thanks your ahead of the Tribune, I note Hertel's & Fowler's partner Richard D Willrodt was in fact arrested for Lewd acts on a small boy in LA. HOB loaned them $7 Million under loan 32936 to Willrodt ( Pervert) Fowler, Hertel and De Witte. The hammer is coming
    By: Anonymous on 8/12/08
    Talk about lack of ethics! Wasn't Tiffini Hughes (Karen's co-hort) given the 2004 Business Woman of the Year award? And nominated again in 2006? (see her website) I was told the Bakersfield property was finished. I googled it on maps and she hasn't even broken ground.
    Don't you have to demonstrate business ethics and integrity to be given such an award?
    What a bunch of con artists!
    By: Anonymous on 8/12/08
    My opinion is Karen and Joshua are trashy people. If Karen had true class this wouldn't have happened. She only gave the appearance of class by her clothes, car, ranch, olive company but it was all false! She herself isn't classy, she only had fun playing 'make-up' with other peoples money. That woman doesn't possess the class, ethics, business sense to run a legitimate business.

    After prison, I'd move far, far away. This town doesn't want any Guths or Yagudas walking our streets.
    By: Anonymous on 8/12/08
    Let's clear this up! The 'defaulters' that DIDN'T partner with Karen NEVER got all the money they needed to finish their projects. They had to beg, sometimes for months, to get their money in hopes of finishing their projects. They lost subcontractors and help during this time but they couldn't hang on to them without enough money. EFI burned them! When the loan time was up, they still didn't have the money THEY PAID FOR by way of loan fees! So, of course, these builders are going to sue and put a lis pendens on their properties. Of course! Wouldn't you? Karen ripped them off!

    Slimey Karen was then hoping to foreclose on thier properties so she could collect the equity in which she made sure there was plenty of prior to making a loan. And in many cases she got away with these foreclosures since it would cost the borrower too much money in litigating fees. So the borrower puts their tail between their legs, mark a lesson learned, gets foreclosed upon and Karen wins the loot. The investors only get their 10-12% and Karen then gets the rest!

    Karen is a defaulter, too. When she partnered with other builders in those LLCs and then 'failed' (see Three Bells article) she 'noted' her failure while burning up the investor's money in management fees and then went belly up (one fat belly loaded with money in her pocket). In the case of D'Amico (Three Bells partner) he has a fat belly too! Look up the continued filings on Three Bells. Was it ever resolved? No. It appears obvious the suit was all a show to make the foreclosure and acqusations against each other seem ligitamate when in all reality it was a scandel and investor robbery.

    At least this is the way I see it.

    So when you say 'defaulter' there are two types. The Rons who didn't get their money and the Karen partners who did!

    She ran a good scam!

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