STAKEOUT CONFIDENTIAL: Seeing Guth and Yaguda in handcuffs

October 19, 2008
Josh Yaguda tells deputies about reporters. Deputies tell Yaguda he is being detained.

Josh Yaguda tells deputies about reporters. Deputies tell Yaguda he is being detained.


Law enforcement plans to grab Estate Financial Inc.’s principals some time Thursday raced through the investor community like rumors of rain during a drought.

So we knew what was going to happen, we knew who, why, and where. But exactly when? That piece of information was missing.

Karen Guth, 65, and her 40-year-old son, Joshua Yaguda, president and vice president of the failed Paso Robles lending firm Estate Financial Inc. (EFI), were to be taken into custody at their Pasolivo Olive Co. ranch Thursday. They would be charged with 26 counts of fraud-related crimes. Bail would be set at $5 million each, and passports would be confiscated.

Also, Guth and Yaguda would be detained for at least three days in County Jail while authorities ascertain bond funds are not “tainted.”

CalCoastNews has reported on the collapse of EFI since the first of the year, noting in numerous articles the hard money lender’s suspicious practices and transactions; their apparent systematic looting of investors’ accounts; and the heart-breaking personal accounts of the fleeced. With a rough draft of the arrest already written, we planned to own the story.

Initially, The Tribune stoutly supported EFI, a long-term advertiser, suggesting EFI’s troubles were due to a downturn in the economic market. At the same time, UncoveredSLO was detailing a litany of what appeared to be massive financial deceptions.

While the Vineyard Drive neighborhood was still cloaked in darkness, co-editor Karen Velie, armed with two cameras, coffee, and blankets, started her stakeout of the Pasolivo ranch. As law enforcement typically arrest suspects during the very early hours to diminish their capacity to resist, it was entirely possible that the pending action might take place at any time.

On a strip of a public right-of-way, Velie parked her red Hyundai on the shoulder of Vineyard Drive and began her watch.

At 5:30 a.m., Guth drove slowly past the ranch in her Mercedes, turned around, drove back, and then entered the long, curving driveway through a swinging iron gate. For the next hour, there was a flurry of activity in one of two buildings visible from the street, a large brown barn. Guth appeared to be loading Dumpsters and moving articles to and from her vehicle’s trunk. A large refuse trucks arrived at 7:25 a.m., entered the ranch, and removed a load from outside the barn. At 7:45, a second truck repeated the activities of the first truck.

Shortly thereafter, Velie’s well-rested associate, Dan Blackburn, joined a disheveled and bored reporter.

Minutes dragged by like hours. The reporters’ conversation drifted, then centered on their primary reason for being there: the thousands of Estate Financial victims who could not be. If allegations prove to be true, Guth and Yaguda had robbed so many people — of their money, hope, and their very future — that their arrest was a moment of considerable significance. It would not happen in a vacuum.

During their wait, the reporters talked about the Atascadero-based Meals on Wheels program. The non-profit provides nutritious food for needy seniors in Atascadero and Templeton, and because of investments with EFI and Hurst Financial, the agency is financially strapped. The non-profit agency, attracted by the promise of high-earned interest, invested its entire nest egg of about $300,000 with the lenders. Meals on Wheels, like many others, is no longer receiving interest. Officials investigating the lenders’ fraudulent activities fear investors’ returns will be pennies on the dollar.

Now, said Citizens United President Dale Willis, officials of Meals on Wheels have had to cut down on food portions, and for many, this is their only meal of the day.

During their wait, the reporters talked about the dozens of men and women near or in retirement who shared their stories of fiscal trauma and helplessness, and who had worried for months about plundered investments.

And they talked about the cavalier manner in which these people’s hard-earned dollars had been stripped from them by stealth and without, apparently, a second thought about the human wreckage being left behind.

About 8:30 a.m., Guth’s daughter-in-law rode a golf cart to the end of the Pasolivo driveway and walked along the street to the reporters’ vehicle. She pleasantly asked what the reporters were doing. Blackburn said, “We’re waiting for friends.”

Apparently satisfied, she departed.

Then, a half hour later, Velie said, “Oh, oh. Here comes Josh,” as she rolled her window up and locked her door.

“He’s smiling,” Blackburn said as he rolled his window down.

Yaguda took the long walk down the drive and onto the street as he approached from the rear of Blackburn’s silver truck.

“What are you doing here?” Yaguda asked.

“Just waiting.” Blackburn replied.

“You’re on private property,” Yaguda responded.

“No, we’re not. But we’ll move across the street if you want,” Blackburn said.

Suddenly, Yaguda’s demeanor changed, and he screamed, “I said get the f–k outta here!” He grabbed Blackburn’s shirt, and pumped his fist repeatedly toward Blackburn’s face while repeating his demand. Yaguda then stopped, looked at a press credential on Blackburn’s collar, and sneered, “You’re Dan Blackburn, that UncoveredSLO reporter.”

He then reached his fisted hand into the vehicle, and ripped Blackburn’s press credential away.

“I’m calling the sheriff,” Yaguda said.

“Don’t bother,” Blackburn said. “They’re already on their way.” Velie later would report that Blackburn spoke softly and was smiling.

Yaguda reacted visibly, and then walked away, still holding the sheriff-issued press pass and shouting obscenities.

Velie said, “Look at my hands, they are shaking. Oh rats, I have a camera, but no picture.”

Half an hour later, a sheriff’s deputy showed up, having been summoned, incredibly, by Yaguda. While sitting in his car prior to heading up the driveway, dispatch asked him to detain Guth and Yaguda. A second deputy arrived, and the pair interviewed the reporters, Guth, and Yaguda.

While these discussions were ongoing, the cavalry arrived, approximately a dozen nondescript vehicles stuffed with sheriff’s deputies, state agents, district attorney investigators and federal authorities sped down Vineyard Drive bumper to bumper and turned down the long driveway leading into Guth’s Pasolivo ranch. Dozens of law enforcement officials, armed with an arrest and search warrant, swarmed onto the grounds. It was 10:15 a.m.

Pasolivo employees who had already arrived for work were sent home. A deputy was assigned to secure the gate.

For the next two and a half hours, officials interviewed Guth and Yaguda inside a small house visible from the road.

At noon, Blackburn left to file CalCoastNews’ story, having obtained pertinent information about the arrests even before the district attorney distributed an official press release.

At about 12:30 p.m., a Mercedes drove up to the Pasolivo scene, and a daily newspaper reporter and photographer joined the watch.

At 1:00 p.m., officers placed a handcuffed Guth into the back seat of a sheriff’s car. Then, around 1:10, deputies and agents emerged from the white and gray farmhouse with Yaguda, also in cuffs. Agents placed the pair side-by-side in the back seat of a sheriff’s squad car for transport to San Luis Obispo County Jail.

Sources claim Guth and Yaguda purchased numerous firearms just days prior to their arrest.

The long, painful ordeal being felt by countless victims of what may be this county’s biggest swindle ever had reached a new plateau. One chapter of the devastating saga of Estate Financial was nearing its end.

Now, it is investors who must take up the watch, as the ever-widening and increasingly complex financial debacle created by Guth and Yaguda is straightened out. For those who have been damaged by mother and son, the long, dark night is just beginning.

Tags:, Arrest, Estate Financial



  1. ccn_debate says:

    Member Opinions:
    By: Nameless on 10/21/08
    Why anyone questions some of the bloggers motives when it comes to K and J? My sympathy goes to J’s wife and kids without any reservation. I fully understand their plight pain and sufferings. This is only the beginning because I feel their pain. Every time I had to give an evasive answer to my children; How come we can’t have this or that? How come we can’t go on vacation? How come we always were able to enjoy life, but now every penny must be treasured? I admit, it’s been a lesson in life for my children too “how to live without”. That’s the future for J’s kids and wife. Unless of course plenty was set aside for such an eventuality as I believe they’ve prepared for.
    For K and J, I wonder if they look in the mirror (fogged up in the slam) what do they see? Do they face up to what have they done? Are they still in denial like they have been for so long? All the sugarcoated talk to investors and borrowers and that some disgruntled investors borrowers along with this site caused the problem. Wasn’t there enough fees and interest spread they were able to pocket legitimately? Why did they try to be wealthy in a short time? They had it all and never enough. Their ego became too big to keep it in place. The claim by them and their attorney (who must say things regardless of validity) that they are nice people just got caught up in bad economic circumstances. Their Ponzy game started long before the mortgage problems. Karen had to prove herself and of course Josh was a happy puppy who was fed well with unseemly pay and bonuses. Now he is facing the same charges as his mother even though his mental capacity was and is limited. The only thing unlimited is his arrogance, but for now somewhat curtailed.
    Currently the DA charged them with 26 count of felony, but much more will come as they are getting information through the Trustees. We were told at the 341 creditor meeting about the likely illegal transfers, self dealings and potential Ponzy game. The Trustee indicated to hire “special council” to investigate K and J’s $100 plus Million. Loans to affiliates they were part of. Additional charges are yet to come. If they smart, they plead out quickly before the next wave of charges. No high powered attorney will be able to get them out of it. The paper trail is too much and long along with angry victims.
    By: Obama on 10/21/08
    Have to agree with Riley — spreading hatred doesn't make things better. Better we should all just try to help each other. The kids deserve a break. Don't turn your hatred into a crime yourself.

    My question has always been: if K and J ever received a legitimate fee/commission/salary over the last 15 years how can those proceeds be touched? If Pasolivos was built with their own money, how can that interest be disgorged? Is somebody going to decide what was ill-gotten, and what was not? Is it all ill-gotten as defined by their conduct? Too much for me to figure out.

    Anybody got an idea on that one?
    By: Stacy on 10/21/08
    B G III, LLC Nevada Corp E0564612008-6 Officer Karen Guth Look it up on Nevada Business Portal. Very Interesting even on 9/4/08 she was trying to do sneeky things!

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  2. ccn_debate says:

    By: CarolAnnRiley on 10/21/08
    I saw Karen Guth and Josh in court on KSBY TV yesterday. A dozen investors attended the hearing and apparently it has been extended for a week. Considering that there is a 5 Million dollar bail requirement on each of them and that the bail money can't be "tainted" I don't think they'll be getting out soon. Their passports have also been confiscated. It irritated and even sickened me to hear their attorney call them "nice people just like everyone else who has been suffering from the economic downturn" and telling us how they claimed a voluntary bk when we know that it was a self centered counter move against a forced bankruptcy. I'm very angry with Guth, Yaguda and their cohorts. However, if they transfered investors funds into Pasolivo (and I beleive they did) then those funds will have to be returned. It actually makes good sense to support any business they own because the investors now have a vested interest in those companies. I think the young children(they are only in the first and third grade) should be protected and pitied. It truly does take a village to raise a child. Lets leave the children out of this, they already will have to live with this for a lifetime.
    By: Riley on 10/21/08
    I've been following all this on the local and national level. I know of no one who hasn't been affected by the economic downturn, and the increased cost of fuel and food. I do know that the anger and disgust with the system is overwhelming.

    In this particular case, if EF owners, are found guilty of even half of the charges, they will be punished. Will it be enough to satisfy some of the "victims", probably not with the nastiness with which some write. Only skip over to the national headlines with people shouting ugly things at campaign rallies and you see the breaking point and fear many feel. This is more damning to EF given the small town, the promises made and lies told.

    Leave the family out of this one. Let the first grader and third grader go to school here without fear. Get back to whatever life has been left to you by this mess. Spreading what amounts to gossip, hate, or revenge is harmful to you and everyone that reads this. Telling people not to shop at Pasolivo, that the children are bad apples, that Josh is a jerk, where does that get any of us today?

    Let the legal system move forward, share news, stem the gossip and hatred, and save yourself from becoming what you hate. A jerk.
    By: InTheKnow on 10/20/08
    to isntgreedgood,

    First bloggers ask them to give more details, they do, and then they are accused of being pompus. LOL
    By: isntgreedgood on 10/20/08
    McDave said:Have you seen that Daffy Duck cartoon where he does an imitation of Sargeant Friday from "Dragnet"? This is even funnier. Congrats on your reporting of this story, but please try to get over yourself — some of us just ate.

    Now that's funny.
    By: CarolAnnRiley on 10/20/08
    Lamereporters obviously already has been hit in the butt with something. This story has been developing over a long time and it has nothing to do with opinion. It is what it is, the facts are the facts. I find it interesting that he mentions the PR police and the tinted windows story.
    By: MyThoughts on 10/20/08
    To lamereporters: You write that you wont be coming back.

    Don't let the door hit you in the butt when you leave.

    Since you are so upset with the reporters I can only assume you are one of the people who has your head buried in the sand refusing to believe there are some problems in this county.

    Since your not part of the solution it is obvious you are part of the problem. In fact you probably condone the behaviors which have been exposed.

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  3. ccn_debate says:

    By: WiseGuy on 10/20/08
    I asked for more details, I got more details! (Try THAT with The Tribune!) Thank you CalCoastNews!
    By: Rany on 10/20/08
    Hi I'm new here. My name is Randy but I did a typo when I signed up and got stuck with Rany!
    I can't seem to find how to correct that?
    Lot's of people have been telling me about this site so I stopped by and I like what I see here
    Great stories. I'll be back for more and to read the rest of what I've missed. You need to get your name out there. I've only just started hearing about you and it looks like you've been around for awhile.
    By: Nancy on 10/20/08
    I think that Karen should have hid under the blanket and took the picture. I would love to see him acting the way that I feel. I hope he stays in jail.
    By: Jim on 10/20/08
    I think that a lot of us (investors) know what a bully Joshua Yaguda is… interesting how he can be such a tough guy around a bunch of seniors…
    And now he has tried to intimidate a couple of reporters with his "demeanor"…
    Well… I notice that there wasn't anything written about him getting tough with the authorities… of course those sheriff's deputies are of a fair size…
    In prison… well… that's a whole other story…
    Should be interesting the first time he mouths off to one of the correctional officers…
    Then of course… there will be his cell-mate… yeah… that should be interesting as well…
    By: Obama on 10/20/08
    Little concerned about the authors' conclusory tone — I 've learned over the course of my campaign that it's not a good idea to commit too strongly to a position I may have to change later. It saves time and energy.

    Also, if for any reason K and J were acquited, I suspect you'd be called upon to fund their retirement. I don't think even Sullivan v. New York Times would save you in this case. Better consult with your legal team. Then again, if K and J are convicted of even a minor violation — who knows, you might be in the clear. It's a tough business you're in Karen and Dan. Best to watch your legal radar. In the meantime, have another cup of coffee and a donut.
    By: Laura on 10/20/08
    I think it's probably a good thing that Karen didn't take the picture. Josh tore Dan's press ID off his shirt! It sounds like Josh was obviously loosing control and it wouldn't have taken much for him to land a punch and take the camera too. It's amusing to picture Karen Guth doing a slow drive by before entering the location to unload boxes from her Mercedes and the daughter-in-law asking what they are doing there (considering the boxes are now being dumped). Obviously unsatisfied and paranoid the BIG guy comes down to investigate and sees that it's Uncovered Slo out there! What a nightmare and too think that it had only just begun. Fun Story.

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  4. ccn_debate says:

    By: Cindy on 10/20/08
    To mccdave,

    You obviously aren't an EFI victim. I think that if you were, you would "savor" every word of this story. The arrest is the beginning of the recovery process. Many of us want to know everything about it and I'm grateful that Karen and Dan were there to share the experience with us. Granted, I cracked up thinking about how Josh scared the daylights out of Karen and she got too shook up to take the picture of his fist in Dan's face, particularly considering that she had been in her car with blankets coffee and "two" cameras all night! I would hardly say that either of them need to get over themselves but maybe some folks need to have more appreciation. It's a darn good story, thanks for sharing all the details with us Karen & Dan.
    By: JorgeEstrada on 10/20/08
    Muchos gacias! About time, how did the infestation get so large? I hope the seed is sterile because the cost of Round Up for this weed continues at our expense.
    By: Miceli on 10/20/08
    I'd like to know what was in the trash trucks
    By: mccdave on 10/20/08
    "Shortly thereafter, Velie's well-rested associate, Dan Blackburn, joined a disheveled and bored reporter.

    Minutes dragged by like hours. The reporters’ conversation drifted, then centered on their primary reason for being there: the thousands of Estate Financial victims who could not be. If allegations prove to be true, Guth and Yaguda had robbed so many people — of their money, hope, and their very future — that their arrest was a moment of considerable significance. It would not happen in a vacuum."

    Have you seen that Daffy Duck cartoon where he does an imitation of Sargeant Friday from "Dragnet"? This is even funnier. Congrats on your reporting of this story, but please try to get over yourself — some of us just ate.
    By: Newsome on 10/19/08
    Yes, Paso_Guy, I recognize now that was a pretty basic observation on my part. Hopefully the feds are already there, or better yet, they forestalled the tipping of the truck to gather evidence is a more controlled environment.
    By: Paso_Guy on 10/19/08
    Gosh, Newsome, I'll bet the garbage truck went to the dump, you know, the one east of Paso. I could be wrong though, it might have been high-jacked. I better check E-bay, the contents may be for sale!
    By: Booty_Juice on 10/19/08
    Guth pitched me as well. So did that Jeff Whatshisname with Wealth Whatever. How anyone would trust them with the price of a Happy Meal is beyond me. They should probably rot in prison, and their victims charged with felony stupidity.
    By: Nameless on 10/19/08
    Sounds like Josh!! I've been the recepient of his anger. Am I enjoying their plight? You bet. Its their turn to pay the piper.
    By: Jim on 10/19/08
    Karen Guth and her son Joshua Yaguda solicited and then accepted $$$ from me when their license was out of compliance…
    When I asked for the return of my $$$… they refused…
    With the clarity of 20/20 hindsight… it was certainly stupidity on my part…
    However… according to my attorney… this is FRAUD…!
    By: Newsome on 10/19/08
    The next step in the investigation is to find where the garbage trucks dumped their loads.

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