Estate Financial attorneys blame market downturn

November 24, 2008

By KAREN VELIE

Following a fourth bail hearing and arraignment continuation, Joshua Yaguda’s attorney pointed at the downturn in the market as the catalyst for the financial ruin of Estate Financial inc. (EFI), on Monday morning.

“The market shifted and changed,” Yaguda’s attorney Dyke Huish said. “That’s what happened here. They made people lots of money on the upside.”

Karen Guth, 65, and Yaguda, 40, are accused of swindling more than 3,400 investors, primarily seniors, out of millions of dollars. Charged with 26 felonies, the mother and son team face more than 30 years in prison. Guth and Yaguda reside in San Luis Obispo County Jail pending $5 million each in bail.

Fielding a question by investor and real estate broker Jeri Kirkpatrick regarding the alleged failure of Guth and Yaguda to inform investors of their participation in numerous construction projects funded by EFI, Huish conceded the pair may have broken the law.

“Maybe they did some of the things,” Huish answered. “The question is how much did they do and how long should they be punished. If they did do it, they should be accountable and nothing more.”

Huish went on to suggest investors turn their attention away from Guth and Yaguda and towards the bankruptcy trustees.

“In your situation, I would want to know what the trustees are doing, not what Guth and Yaguda are doing,” Huish added. “They have your money. Put as much energy into them as you have done with these folks.”

In June, creditors forced EFI into Chapter 11 bankruptcy and asked the courts to appoint a receiver. About a week later, Guth and Yaguda voluntarily placed EFI Mortgage Fund into Chapter 11. EFI trustees continue to attempt to trace the money trail, analyze investments, and help creditors and investors to recover monies. The process is expected to take many months.

At the hearing, attorneys for Guth and Yaguda encouraged the court to continue the arraignment and bail hearing until December 12 at 10 a.m., to allow the defense to have more time to research the case, Huish said.

In addition, Huish beseeched the court to allow Guth and Yaguda access to two boxes of files along with a private place for him to meet with his clients. Currently, in step with the general jail population, Guth and Yaguda meet with their attorneys through a glass partition using monitored phones.

“We have agreed to their requests pending a court order,” said San Luis Obispo Undersheriff Steve Bolts. “We will let Guth and Yaguda see any documents while their attorneys are present. We do make accommodations when it is necessary for the defense.”


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2 Comments

  1. ccn_debate says:

    Member Opinions:
    By: Harlow on 12/4/08
    $15,000 a month income, and expenses paid by someone else. Yet is difficult to make ends meet?

    PLEEEEZE!!!! Give me a break and bring out the violins
    By: SMOKEY on 12/1/08
    NAMELESS, Somehow, Somewhere, Someone, has Something, which has a great deal of CASH, STASHED, within in IT!!!!
    By: Nameless on 11/30/08
    SMOKEY
    Karen's Salary was $15,000 and Josh's $10,000 a month. Their cars, insurance, etertainement and other expenses paid by EFI.
    It was difficult to make ends each month. They needed the additional draws within the last 12 months. Give them a break!!! Now, they can't even come up with $500,000 bail each and the same amount for defense attorney. Have you no heart?
    By: Jim on 11/29/08
    This scenario calls to mind… the outlaws that rustle a herd of cattle from unsuspecting ranchers… when they are finally caught… their attorney says to overlook their misdeeds… and rather concentrate on the price of beef…
    By: SMOKEY on 11/29/08
    JorgeEstrada is correct. 65 year old Karen and 40 year old Josh just got extremely GREEDY, CLEANED OUT OVER A MILLION AND A QUARTER DOLLARS($1,250,000.00) IN CASH WITHIN TWELVE MONTHS ALONG WITH THEIR COMBINED MONTHLY SALARIES OF $10,000.00 TOTALING ANOTHER $120,000.00., and then blamed it on a DOWN TURN IN THE MARKET.
    NO BAIL, NO LOOKING AT BOXES OF RECORDS, NO PRIVATE VISITATIONS WITH SON OR LAWYERS UNTIL ALL OF THE CASH IS RETURNED. ANY VISITATIONS SHOULD REQUIRE FIRST AND FOREMOST: AT LEAST FOUR BAILIFFS PRESENT FOR OBSERVATION ONLY, FOUR OR MORE OVERHEAD CAMERAS RECORDING ALL OF THE ACTIVITIES TO INSURE THAT NO SLIGHT OF HAND OCCURRS AND NO CRUCIAL EVIDENCE IS MISSPLACED, OR STOLEN, OR DESTROYED. When they start to act like HONEST AND DECENT HUMAN BEINGS, THEN THEY CAN BE TREATED AS SUCH.
    By: Booty_Juice on 11/26/08
    60 and 45 sounds about right.

    Guth was the last philly in her north county 8th grade class (or as they say oop nort, "my senior year") to be a momma.
    By: Riley on 11/26/08
    Other news articles say Guth is 65, Yaguda is 40.
    By: MartinW on 11/26/08
    "Karen Guth, 60, and Yaguda, 45,"!

    Hummm are those ages correct?
    By: Cindy on 11/26/08
    I think JorgeEstrada hit the nail on the head.

    and.. Not only did they suck the well dry but they did it by cloak of night.

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

    By: Riley on 11/26/08
    Congratulations, this site has now bottomed out to a level it can only rise up from – you are now beneath those you hate.
    By: Booty_Juice on 11/25/08
    Joe has it right – Josh and Karen, north county's finest, just want the private room to engage in conjugal relations.
    By: xlswede on 11/25/08
    "I'll have you know, I had the same problem back in 1920, the market just dried up for my postal coupons and caused a MARKET TURNDOWN, ultimately destroying my business. Been there, done that, I know how Guth and Yaguda feel!"
    Charles Ponzi
    By: Joe on 11/25/08
    Ha, they are in GenPop and of course, want special treatment, private meeting and boxes.. Nope, no the suicide risk is too high. Why not a conjugal visit?
    By: JorgeEstrada on 11/25/08
    Ya Sure, like it's ok to suck the well dry and blame the rain that didn't come.
    By: Jim on 11/25/08
    As someone who would like to see these two people held accountable for their actions… I could not have chosen a better attorney to represent them (smiles)…
    By: Nameless on 11/25/08
    Are the attorneys retaind? If so, where did the money come from? Wonder why would it take so long to read the charges and enter a "not-guilty plea"? What game is being played at taxpayers expense?
    By: Al on 11/24/08
    Nothing like back to the future but Cal Coast news needs to set their clock :)

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