Former EFI employee: ’We all knew it was fraud’
November 7, 2008
By KAREN VELIE and DANIEL BLACKBURN
Three former employees of defunct Estate Financial Inc. (EFI) claim they witnessed fraudulent behavior while employed at the Paso Robles hard money lending firm.
Speaking to CalCoastNews on condition of anonymity, the individuals provided new details of working conditions and financial practices of their ex-employers, Karen Guth and her son, Joshua Yaguda. Each of the former office workers expressed concern about becoming involved in the continuing investigation into EFI’s collapse. Several other one-time employees declined interviews.
Guth, 60, and Yaguda, 45, were taken into custody Oct. 16 by a multi-agency task force at their Pasolivo olive ranch. They face 26 fraud charges each, and both remain in San Luis Obispo County Jail pending $5 million bail.
One of the employees said that one occasion last March she told fellow workers that Guth “is keeping $200,000 from a property that closed.” Following that sale of property, the employee told her office associates that Guth had transferred proceeds into the EFI fund account without alerting investors. (It is a crime in California to reconvey real property without first receiving informed consent from deed holders and investors.)
Following that March meeting, a skeptical employee said she asked EFI’s escrow officer, Shauna Bishop, if the transfer was legal.
“Shauna said, ‘Where do you think our payroll is coming from?’” the former employee told CalCoastNews. When another employee pressed the issue to Guth herself, the EFI chief pointed to a section in the company disclosures permitting a one percent commission draw.
Asked if Guth realized the transaction was unlawful, the former employee said, “She knew it was fraud. We all knew it was fraud.” At least one employee said she was fired for raising questions, a claim echoed by other women interviewed for this article.
Bishop still works at EFI while bankruptcy trustees attempt to unravel the complex financial mess left by Guth and Yaguda. Bishop did not return calls made to her cell phone by a reporter, and did not respond to a voice mail message detailing specific questions.
One erstwhile employee, asked to verify elements of the $200,000 transaction and others that appeared suspicious to workers, at first demurred, saying, “I don’t remember” and “I just want to put this behind me.” She subsequently confirmed accounts provided by others, with additional details.
At least several of the former employees have been interviewed by investigators from the district attorney’s office. One of the women gave details of EFI inner-office activities to CalCoastNews which she admitted she had not provided to law enforcement officials — because “they didn’t ask those questions.” The woman added, “There is a lot of fraud the district attorney knows nothing about.” She declined to elaborate.
One by one, the former employees related tales of Guth’s frequent, rage-filled tantrums, during which she would berate workers and her son, calling them “stupid” and suggesting they “f#*k off.” She reportedly ordered her employees to abruptly terminate telephone calls from investors.
Guth and Yaguda are accused of bilking funds from an estimated 3,400 investors using lending schemes and questionable management practices which may already have cost those investors more than $500 million. Many fear the resulting economic chaos will shadow personal and business finances in San Luis Obispo for decades.
The EFI firm became the target of probes and subsequent sanctions from the state departments of Real Estate and Corporations. IRS and FBI agents, and county district attorney’s deputies, participated in a months-long investigation after hundreds of investors lodged formal complaints.
One of the women interviewed for this article outlined an incident in which EFI’s Bishop commandeered her boyfriend’s Cal Poly e-mail name and address in order to publicly challenge the integrity of a builder, Ron Cooper.
“Shauna wrote slander about Cooper,” said the former employee. Bishop disclosed Cooper’s private tax information in the e-mail to a radio talk show host, and included a string of derogatory comments about Cooper’s business practices in an attempt to discredit the developer. At the time, Cooper was acting as a key organizer for hundreds of unhappy EFI investors.
Bishop, according to her former co-workers, was angry about an article which appeared on this site reporting on long delays by County Clerk-Recorder Julie Rodewald in posting Internet public notice of property transfers. The article also pointed out that Rodewald is married to Roderick Rodewald, a San Luis Obispo attorney who represents business interests of both EFI and Guth.
The article was discussed by KVEC talk radio host Dave Congalton during an hour-long show, and Bishop fired off a critical e-mail — using her friend Don Carver’s address — to provide tax information that appeared to originate from a private loan application. Such data is available only through voluntary release by the taxpayer, or under subpoena from law enforcement or government officials.
Bishop wrote in the e-mail, a copy of which was obtained by CalCoastNews, that “I did a little background check on your boy Ron Cooper. I’m sure if you called a few investors in Southern California they would tell you how much money they have lost because of [him].”
Carver reportedly was disciplined by Cal Poly officials who mistakenly assumed he had authored and sent the e-mail in violation of university rules.
“I think desperate people do desperate things,” said Cooper about Bishop. “I’m disappointed at the lack of morality, and aghast that anyone would jeopardize thousands of investors to try to take me down.”