ESTATE FINANCIAL UPDATE: Conflicts of interest?

January 11, 2009
Cattle are becoming major players in bankruptcy proceedings for hard money lender EFI.

Cattle are becoming major players in bankruptcy proceedings for hard money lender EFI.


Several key players in a hard money lender’s federal bankruptcy proceedings have apparent conflicts of interest, a situation which may further complicate investors’ efforts to recover hundreds of millions of dollars in lost assets.

Trustees appointed by the Santa Barbara bankruptcy court are trying to sort out the convoluted financial dealings of Estate Financial Inc. (EFI) and EFI Mortgage Fund of Paso Robles with the assistance of an investor committee chaired by John Lacey. Roger Frederickson, of the San Luis Obispo law firm of Sinsheimer Juhnke Lebens & McIvor, LLP, and Santa Barbara attorney Peter Susi represent Centennial Livestock LLC, according to court records.

John Lacey is a principal owner of Centennial Livestock LLC and the single largest investor in EFI with more than $3 million placed in EFI’s Mortgage Fund.

Yet Lacey and his livestock LLC’s attorneys, Frederickson and Susi, apparently did not disclose that John’s wife, Dee Lacey, sits on the board of directors of Heritage Oaks Bank, which reportedly lent EFI president Karen Guth $5 million, originally unsecured. A county prosecutor has suggested Heritage Oaks Bank may have “dirty hands” regarding its financial dealings with EFI principles.

Dee and John Lacey did not return requests for comment.

The bankruptcy court recently appointed John Lacey chairman of the investor committee. His attorneys, Frederickson and Susi, have become involved with the bankruptcy court through the livestock LLC.

In July, creditors forced EFI into involuntary Chapter 11 bankruptcy proceedings. Shortly thereafter, Guth and Yaguda voluntarily placed EFI Mortgage Fund into Chapter 11. On October 16, Guth and Yaguda were arrested and accused of 26 felonies. They remain in county jail with bail set at $5 million each.

Susi was approved as the attorney for the Committee of Equity Investors following a recommendation to the courts by Frederickson, sources said. Frederickson handles foreclosures and litigation against borrowers to enforce personal guarantees for the unsecured creditor committee.

All bank accounts listed on the EFI Mortgage Fund bankruptcy statement of financial affairs are with Heritage Oaks Bank. In addition to the Livestock investment, Dee Lacey invested $30,000 in her name and then another $62,000 along with her husband, with EFI, according to bankruptcy exhibit 21b.

 In the end, cattle may play a prominent role in EFI's bankruptcy proceedings.

In the end, cattle may play a prominent role in EFI's bankruptcy proceedings.

Federal banking rules prohibit board members from voting on companies or individuals where they have conflicts of interest.

A small group of investors originally hired Frederickson to help recover monies lent to EFI. Those investors would later be told by Frederickson that Centennial Livestock would assume any subsequent cost of the case, sources said. However, they were not informed of Centennial’s connection to Heritage Oaks Bank.

According to the California Rules of Professional Conduct for members of the state bar, a “member shall not, without the informed written consent of each client, accept representation of more than one client in a matter in which the interests of the clients potentially conflict….”

Frederickson said he was not aware of his clients’ ties to Heritage Oaks Bank and that he did not find Dee Lacey’s position on the bank board to be relevant. He said local prosecutors have told him Heritage Oaks Bank is not being investigated. Fredrickson further said he was appointed by the Bankruptcy Court to investigate fraud. He asked a CalCoastNews reporter to provide for him any documentation of misdeeds by the bank. The reporter declined.

Sources claim the bankruptcy court did not appoint Fredrickson to investigate fraud. Bankruptcy trustees did not return requests for comment.

Susi contacted a CalCoastNews reporter shortly before publication of this article, at the request of Frederickson, Susi said. He asked the reporter to kill the story because it would adversely affect investors. He voiced admiration for John Lacey and worried that the story could result in a change of leadership in the investor committee.

“I am not an attorney for John Lacey,” Susi added. “I was appointed by the bankruptcy court. I researched Lacey and he is a well-liked, upstanding person.”

Court documents show that Susi was an attorney for Centennial Livestock LLC, and thus John Lacey, prior to Susi’s approval by the court to represent the investor committee.



By: insider on 1/20/09

Paso Guy

By your own words "They rob, steal, and cheat" what other "smoking gun" do you need?

By: Paso_Guy on 1/20/09

"It was very definately a rob, cheat & steal scheme."

I would believe this except for the fact that they were still at/near the crime scene when arrested. Are they that stupid, or did they not think what they were doing was criminal?

These two were horrible in regard to their business practices, but has the DA put the huge "smoking gun" on display as of yet? Did I miss that news release?

By: investless on 1/19/09

In reading several comments about how many kept believing Karen Guth was surprising as it was happening. Although I admit she carried that off very well, lied right to your face as someone said "unblinkingly", true, she did. If you read her BIO you would see she has some sort of degree in criminology, duh. They will get their reward as they deserve, both mother & son. It was very definately a rob, cheat & steal scheme. They have no remorse even as they sit in jail, they are criminals.

By: rogerfreberg on 1/18/09

I hope that the investors find some consideration for all of their aggravation .. but I wouldn't get their hopes up.

Many lessons I learned long ago: 1) never invest more than you can afford to lose and 2) never swim with the big sharks as they always get fed first whether or not it is their turn.

Good Luck,


By: Nameless on 1/18/09


Its just speculation for now. Why all the people defended Karen to the end? Ask the defenders. Likely most beleived her story all along or just had their heads in the sand. So whats new? You think Medoff's investors questioned him until the Media came out with the story? It came to an abrupt end when the music stopped. Nothing different here and people are same everywhere, New York, SLO County or around the world.

By: insider on 1/18/09


Is this just speculation on your part or have investors acually been requested to return funds? And does this apply to "Fund" investors only or also the 1st Trust Deed holders? If this is true one can see why many investors defended Karen to the bitter end as if she went down so did they so to speak.


By: Nameless on 1/18/09


Investors were not greedy expecting interest on their money. They were negligent not making inspections on the sites and trusting Karen and Josh. The price is high in both cases. Investors don't deserve such a punishment.

By: Nameless on 1/18/09


It gets more interesting; Investor who invested $1,000,000 six years ago, received their interest for six years @12% APR that would equal to $600,000.

At the end the final payout; $.20 on the dollar means $200,000 out of the $1,000,000 would be returned. Since they already received $600,000, they must return $400,000 to the Trustees. How is that fair? To complicate matters more, their taxes are kept by the IRS and the FTB. Now you can appriciate the real damage done by Karen and Josh. And for what?

By: insider on 1/18/09

If someone invested 50K in principle and recieved 50K in interest payments and at the end of all this are crying about the 50K in principle they lost then their greed is beyond my belief. Anyone who got out of this with nothing more than a financial wedgey should just lick their wounds and move on.

By: Nameless on 1/18/09


To the dismay of many secured frectional lienholders, the Trustee already treating the mess as it was a Ponzy Scheme. Payouts are calculated as if the portion of the capital was already paid back in the form of interest over the years. The amount invested originally is reduced by the interest payments received already.

By: insider on 1/18/09


Are you saying prior to 1/1/2007 They would make a loan for say 500k. 50k by Joe Blow and 450k provided by the fund and then record a TD 100% in Joe Blows name. Or is what your saying they recorded the deed as 10% Joe Blow and 90% Estate Financial Inc. instead of the "Fund" My history tells me when they closed loans they never had full funds available so they would write the TD to the investor that was providing the funds at closing for the appropriate percentage of the loan and then write the remaining percentage as Estate Financial Inc. and then reassign it as they raised the cash. From what I'm gathering what your saying between the lines is they never submitted TD's substituting the "Fund" for the percentage of money the "Fund" provided so it remains as a percentaged owned by Estate Financial Inc. instead of the "Fund". Once again wasn't Karen just treating the "Fund" money as if it were in her trust and she would just take care of the detail later? The problem now is that the "Fund" has no possition on these TD's. Estate Financial Inc. must where the "Fund" doesn't. Why would people put all this money in the "Fund" and not even check the paper work. I was asking before why they didn't check the construction progres, but the basic paper work. Come on.

By: Black_Copter_Pilot on 1/18/09


Must say, I am suprised by your response…being listed as a leinholder in the EFI files and having such recorded with the county on the 1st TD are 2 different things. Without it being recorded at the county clerks office, the fund has no rights the any money when the property sells…only entities that were recorded. Just because EFI/EFMF have a record of the funding fron the Fund doesn't give it legal status when the property sells. As stated before by the new Fund manager, not all monies provided by the Fund were RECORDED with county and do not show up on the 1st TD……and, according to yesterdays mailer from the EFI/EFMF managers, there was NO EMFI funds recorded prior to January 2007. If that is so, then the Fund has no leagal rights for most of it's holdings…a real, real big problem. Where have you been, this is not new info.


By: insider on 1/18/09

Black Copter Pilot

That makes no sense. If 500,000 was lent and 450,000 was lent by the Trust I assure you the "Fund" was listed as a lien holder for the percentage of ownership. Remember Karen considered this her money. What is more likely is she gave investors the impresion that "their" investment was in certain properties. Of course the records on that are confusing at best. Have you fitted yourself for one of those tinfoil hats yet?

By: Black_Copter_Pilot on 1/18/09

Well, I recieved a packet Saturday fron the EFI/EFMF folks and it declred that until January of 2007 NO Fund money was recorded on the deeds. When I read that I felt financially assaulted all over again.

From a leagal standpoint, Fund investors will be at the mercy of those holding RECORDED first trustdeed ivestments. e.g. if I have $50k (recorded) on a 1st TD on a $500,000 project that was funded with $450, 000 from the FUND, why would I not demamnd all $50,000 when the time comes for liquidation? Why, with the power RECORDED TD holds would I accept less than full value, assuming it pays off at least an amount greater than $50k?

By: Booty_Juice on 1/18/09

"Why didn't construction people raise heck"?

In 2006 a subcontractor friend of mine calls and says Fetyko owed him $30k on a EFI funded project and that he liened the project. Then Karen Guth calls him into her office and promises him more projects where she guarantees she'll make up the difference if he drops his lien.

I tell him that rancid north county bitch has a battery pack that is not fully clicked in and he should lien, sue, and never deal with them again. He drops the lien, takes the projects, and a year later they owe him $130k which he will never see.

Stupid hurts. If yer gonna be stupid, you better be tough.

By: Nameless on 1/18/09


Can you imagine getting 20 Mill without showing where it goes? Where can I get such a loan and if I am so lucky why bother to pay it back? There must be more to the story that we can see for now.

By: Nameless on 1/18/09


In the eyes of the law, all investors are the same. When one places their money with anyone to fund a specific project and the money is misaplied, its a fraud all around. Therefore everyone is liable including the bank when they lent the money without making sure its proper destination.

By: employee on 1/17/09

FYI, 20 million Line of Credit originated in 2005 and over two years added up to the 20 million, it wasnt given all at once.


By: insider on 1/17/09

I'm sorry. I meant not all investors are the same. And yes many let their greed stand in the way of good judgement. So the bad guys are in jail for now. However if their were investors that knew or should of reasonably known what was going on and they took money from new investors knowing where this was all headed. Well you tell me were they investors or partners in this deal?

By: insider on 1/17/09


Clearly not investors are the same. However I'm sure their were many who knew the builders were getting screwed. I'm sure their were many who knew they were getting paid off by funds gathered from new investors that were going to take the big hit. And I'm sure thier were those that were just dumb and the last sucker in line. I do think that if more attention was placed on progress of constuction of these projects than commissions and interest payments everyone would be better off now. Clearly EFI tried to hide all bad news from the investors from day one. Sometimes its better to know the bad news early, however any attempt at that was viewed very poorly.

By: Nameless on 1/17/09


So, how much are the investors responsible for the fiasco?

By: Nameless on 1/17/09


They did and today the crooks are sitting in jail. Investors only raised questions when their checks stopped. No one cared to follow up why loans made in 2002 to 2005 were not paid off even when it was way past due. The juicy interest checks were coming in on regular base. Karen avoided forclosure, so borrowers could be dragged along or just refinanced them for additional fat fees with the full knowledge that draws will not be honered. As "x-employee" stated earlier "New loans bring in "commissions" and "service Fees" and thats what pays the bills and all of you around here". Go figure!

By: insider on 1/17/09

If you complain it's the back of the line. Your crumbs can go to the next bum. A starving man takes what he can get. Why didn't any of the investors monitor the construction progress and check to make sure that the contractors were getting paid?

By: 4Warn on 1/17/09

I don't understand … why didn't the construction people who were not getting paid raise heck?

Seems like everyone got screwed in this deal but thats what happens when ya start dancing with the devil (greed)

By: insider on 1/17/09

I think employee just told the truth and the whole truth. If you were a builder the chances of getting your necessary and regular draws to fund construction were nill. While the investors regularly got the money that was slotted for construction as interest payments. Not too many complained as the projects ground to a stop while the money that should have paid for construction was just returned to the investors month by month and the contractors request for funding were just put in file 13. The lesson learned is if you are going to put all your eggs in one basket you better watch that basket.

By: 4Warn on 1/17/09

My apologies employee. There seems to be so many crooked folks with ther hands in the the pot that it is hard to tell who is who.

I do hope you are cooperating with authorities by providing inside information.

It is still hard to believe that Guth and Yaguda didn't squirrel something away though. Just look at Bernard Madoff as an example. While he was out on bail he was secretely sending jewelry and checks valued in millions to family members.

Another example is that lady who split from Paso Robles to Costa Rica. She's probably living it up down there.

I guess once you step to the dark side anything goes.


By: employee on 1/17/09

To 4warn, I assure you I am not trying to simply coverup Karens actions. I am simply trying to let all you "unaware" and "speculating" bloggers that are putting false hope into the minds of the investors that Karen had this line of credit to pad an offshore account. What I am saying is that during my employment period this money was used to fund escrows to close loans, specicially properties that Karen was purchasing thru her LLC's, and also to fund loans to make interest payments. Thats what a ponzi scheme is, to take in money to make interest payments to earlier investors to keep the cycle going, If she would not have secured this line of credit this whole thing would have came to a hault back in 2006. When you have 300 million dollars worth of investments to make interest payments to the investors and the cycle of loans closing and new investors investing stops the cash flow you gotta do something to keep everyone in the dark that you have over extended yourself. Karens favorite line when we questioned the fact that she was still doing "new Loans" was "thats how we make money around here. New loans bring in "commissions" and "service Fees" and thats what pays the bills and all of you around here". And when you completely fund construction loans to cover the interest payments and cover loan commissions, when it comes time to actually build a house, there is no money left, hence making it impossible for the contractor to build a house, sell the house, payoff the loan, and keep the cash flow coming in. Unless you have worked in this business and actually been there to witness these practices, you should keep your fingers from typing things that you have no idea about, much less accusing someone who is trying to help the investors of telling lies and covering up Karens criminal acts. Anyone who posts negative crap about people who were actually there should shut up.

By: Nameless on 1/17/09


Well, well, well. Why would anyone want to come forward with information if tdoing so will earn the accusation of misleading? Give credit to the x-employee, he/she may know more than you think. In a small office its not hard to see what everyone was doing. Besides, any information passed on might be useful.

By: 4Warn on 1/16/09

Dear Employee:

You write "let me assure you that this money was used as investment money by karen to purchase properties thru estate financial and her llc's, it was also used to fund loans to make interest payments"

Unless you were an employee or agent assigned financial oversight, how would you know whether or not funny business occurred?

You also write "so to think that she has a hole dug some where on her ranch with a can of money in it is not the case"

I am with ya … I doubt any money is buried in a can, but what about an off shore account?

I think it is great you are cooperating with the DA but I have a feeling you are fibbing and simply trying to cover Guth's tracks.

By: employee on 1/16/09

As an ex employee of efi I just wanted to make a coment on the 20 million dollars that some think may be stashed, let me assure you that this money was used as investment money by karen to purchase properties thru estate financial and her llc's, it was also used to fund loans to make interest payments, so to think that she has a hole dug some where on her ranch with a can of money in it is not the case. I also want to say that I have contacted the criminal investigator from the DA's office and have agreed to speak to them regarding the transactions that I witnessed during the period of my employment. I would encourage all other ex employees to also "do the right thing" and share their information. It is our civic duty to help put these two people away for ruining all the lives of not only the investors but also the borrowers who were also harmed by them.


By: Kmikelonis on 1/15/09

My wife called HOB Tuesday regarding the log-in to an online account she maintains for a local non-profit that was banking with HOB. The HOB representative gave her the information without confirming her identuty in any way.

My wife and I went to HOB yesterday to close an account that the State BOE required us to establish for sales tax deposits 3 years ago when we acquired a reseller permit for our business.

The 3 year term was expired and we were glad to be able to close out the remaining account we had at HOB. We have not been in an HOB branch in 2 years so the staff does not know either of us by name or by appearance. We closed the account iand recieved our $2,000 deposit back and no one asked for our ID during the process.

This speaks volumes to us about the business culture at HOB, all business culture is established and maintained from the top down.

HOB could change their tag line from 'expect more' to 'watch this space'

By: investless on 1/15/09

I want to comment that I am surprised that more of you, especially investors, are not supporting this website! Both as readers and responders but also financially.You can be an advertiser or just send them some money to defer costs. It benefits us all. Do we need a website like this with investigative reporters? I was thinking this morning how EFI, HOB,Hurst, 21st Century, the contractors may not have ventured there if they thought there was this kind of coverage that might put them in jail. I am amazed at how little fear, they had and have about the consequences of what they are doing to their own families and ours? It is greed in it's ugliest form. It is I am going to get mone no matter how it hurts someone else. It is "I am powerful because of who I am in this county, because of my roots, my family and you newcomers just go home! I have been here almost 20 years with a business and am still condsider an outsider. I just didn't know how much until now.

This kid of trporting is essential to keeping people honest, they can't go underground as they have here because big brother and sister are watching.

I am shocked at the attorneys who are willing co-conspirators with the mortgage companies and banks to continue to rape and pillage by securinf g the unsecured loans after the fact and now foreclosing. I wonder who rae going to be at the court house steps bidding and buying those properties at pennies on the dollar? I bet you are beginning to figure that out aren't you? This was a master minded plan by some who think the world owes them because of who they are and what their roots are. The y want us "newcomers" to go home and now they have tried to show us the door.

This brings me to law enforcement, what a joke, good old boys and ones who got the jobs because of who they know. They are angry because many for them have left this area because we outsiders drove prices of homes up and they can no longer afford to live here? I could go on and on. I am a womans and am being harrased on a daily basis because I call it as I see it, I tell the truth and I stand up and speak it and I know what I am experiencing is real and it is wrong. Karen and Dan spend hours & hours researching,interviewing, gathering documents, editing, making sure the accusations are real and what the legal ramifacations are, they are uncovering the TRUTH in SLO, and it's about time!!

By: Nameless on 1/14/09

shingh, MikeKnecht

If Karen was able to obtain $20,000,000 in unsecured credit line from the bank, she had to have strong support from all board members. Later when the bank realized the gravity of the situation with EFI exposed through this site, they asked and received collateral from Karen/Josh/EFI. Under no circumstances the bank was ignorant of the fact that most of those properties didn’t belong to EFI and it was already encumbered. If they were clueless, they deserve to pay the consequences even if for nothing more than criminal irresponsibility (i.e. stupidity).

If much of the $20,000,000 was stashed away, it will be located over time. However I believe most of it was paid to investors in the form of interest over time. That information should be available to the DA and the FBI. That action constitutes a “PONZY SCHEME” and will come to light.

By: shingh on 1/14/09

Mike makes a good point, since HOB seems to be involved in many of these loans now in default. I was at Cuesta yesterday on a deal and was told the office is closed and Jim is shredding the last of records and if you need anything call our Lawyer at Buttery etc. I was only interested in the bulk sale of 5 Mile Bridge from Hertel/Fowler to conceal assets they told me Martha did that and she got fired. SO with all the defaults where is the Cash $. One Chief Investigator from Bank of America said they are on to the fraud his word, and are making a referral to the US Dept. of Justice for prosecution of many of the names you all have mentioned on these sites. So keep up the expose' of these people certainly the rip off's are far deeper than we know. They have over 73 LLC's and LP's under a fraud probe. ALL in SLO County


By: MikeKnecht on 1/14/09

I don’t know much but I do know what an attorney says, “Kill the story because it would adversely affect investors” like Mr. Susi said, you better watch out. Heritage Oaks Band involvement in lending twenty million dollars to Karen Guth needs to be publicly examined. Who approved the loans and what guidelines were followed or ignored would be a good place to start. Do these loans prevent Estate Financial Investors from getting thier money back from Karen Guth?

There are a lot of ways to hide money. You can finance a piece of property for someone for a lot of money and take a kick back. You can be a partner in a piece of property and finance it for a lot of money and then put the money in your pocket.

You can borrow a lot of money (like twenty million dollars in unsecured from Heritage Oaks Bank) and do any of the following:

1)Wire the money to an offshore account in a country with strict secrecy laws. You can then borrow the money using the off shore account as collateral. If the money was ever traced, there is a lien against the money and nothing can be collected. That is something like what happened with Heritage Oaks Bank. They gave Guth the twenty million and then encumbered it so investors in Estate Financial couldn’t retrieve any of their investment. If the money is hard to trace then it is hard to recover and harder to prove criminal charges against who ever has the money.

2) Make a whole bunch of $9000.00 deposits all across the county in various banks, then consolidate those funds into certificate of deposits and use that money as collateral for a loan. Then take that money and transfer it off shore. Use the off shore money to buy gold or diamonds and put those in a deposit box in Italy. Sell the gold or diamonds off piece meal as you need the money. If you move the money around enough it becomes impossible to find. (this method of hiding money can be substantiated in an article from the New Times).

The point is, whether Heritage Oaks Bank meant to or not, they helped secure money for Josh Yaguda and Karen Guth. Karen Guth is one of the most dangerous sociopathic personalities I have ever met face to face. If she was tough enough to stand up and lie to five hundred people then she is tough enough to sit in jail for a while until she can figure a way to get out of the country. If you were Karen Guth and knew from 2003 that what you were doing was going to blow up someday, wouldn’t you hide a little of the hundreds of millions that came through your business away some place? If Heritage Oaks loaned Karen Guth $20,000,000.00 of their investor’s money, there needs to be an explanation and that explanation needs to be made available to the public. Heritage Oaks Bank owes that to the citizens of this county.

By: Josixpack on 1/14/09

To Nameless: Hertel and Fowler are partners in The Santa Margarita Ranch LLC. Rossi wouldn't let that happen before he and lawyer friend Metchik snapped it up himself under one or another of his LLC'S names. Re-arrange things a little…Check the records. It should be interesting to see the new owner?

By: 4Warn on 1/14/09

Say Booty:

Pretty sure John Lacey's wife was also invested in EFI aside from the Centennial connection. Hmmmmm ?


By: Nameless on 1/13/09


Whatever the price was on the fire sale, its still much better than going through a Bankruptcy.

By: Josixpack on 1/13/09

Who Bought the Hertel FIRE SALE???Pozo Rd property???Kitco holdings had 6.5 million out on that???


By: Nameless on 1/13/09

Cal Coast News was on the forefront of exposing EFI when many were skeptical, rather in absolute denial. Now, let’s see if the “Big” players will be exposed as well. Being on the Creditor Committee has many advantages and naturally they will place themselves ahead of everyone else. If you believe that they will be looking out for everyone’s interest equally, you must be smoking something.

Being on the Bank Board has advantages as well. Being in the know who is on the upswing and have inside information on potential investments etc. It also has the additional burden to keep ones nose clean, unless of course everyone is on the dole. However, when a loan comes across the loan committee, the one who has a potential conflict of interest just recuse him/herself and as long as it’s in the records no regulation was violated. We don’t know the records, but if there are serious problems with the bank’s loan portfolio the regulators will be scrutinizing every little detail.

For now, let’s see what comes out of this latest revelation and not shooting the messenger for now. With all these loans defaulting with such a rapid succession in one institution, the Feds will be looking over their shoulders. Shareholders look out.

By: Booty_Juice on 1/13/09

This John Lacy chap, the biggest single EFI investor, chairs the Investors Committe.


He has legal representation in this matter.


Lacy's wife sits on the HOB BOD.


Lacy's lawyers also represent other clients attempting to recover from EFI.


You state: "Federal banking rules prohibit board members from voting on companies or individuals where they have conflicts of interest.", implying the wife has voted inappropriately on matters re: EFI for which you provide zero support.

You further state: "According to the California Rules of Professional Conduct for members of the state bar, a “member shall not, without the informed written consent of each client, accept representation of more than one client in a matter in which the interests of the clients potentially conflict….”, implying that the wife's board position renders her and the hubby as avdersarial to the interest of the other swindeled investors for which you also provide zero support.

I suggest in the future you have the usual nap after those 12 packs, undoubtedly with your sister, instead of cranking out shite like this.

By: 4Warn on 1/13/09

Nosedatruth's posts on this story and Roadrunner commentary indicates great compassion for the crooked ways of those once held in esteem. He must be in bed with the crooks himself or has his his buried in the sand refusing to acknowledge the obvious.

Nosedatruth truth probably thinks Madoff is getting a raw deal too.

By: nosedatruth on 1/12/09

Karen, I must be a little slow. So the Laceys invested a lot with EFI and lost it? And HOB loaned EFI a lot and lost it? How does that make a conspiracy? How does that differ from the dozens of greedy little investors who wanted to play with the big kids? They all lost money. Maybe it was due to the economic slump, or maybe Guth & son weren't smart enough to see the slump coming. If a county prosecutor did suggest that HOB had "dirty hands" as you say, why don't you name him and state the date and time he told you that? And if you have evidence of fraud, why did you "decline" to provide it to the trustees' appointed counsel. Your story smells like it came from the business end of the cow in that photo.

By: Unbelievable on 1/12/09

What a buncha crooks! Too bad the local police are more interested in busting pot dispensaries.

By: hotdog on 1/12/09

Wow, what a tangled web of deceit. I wonder what will come up when the folks at Hurst/Gearhart are called into account.


By: DanBlackburn on 1/12/09

CalCoastNews' Karen Velie will be on Dave Congalton's News Talk 920 KVEC today during drive time, 5 p.m., to discuss this and other stories related to this county's unfolding fiscal disaster. I'll be standing by, also. Call in and voice your opinion.

By: SMR on 1/12/09

Well one thing for sure is your correct the Cattle are going to play a role especially with SMR & EFI in conjunction with Farm Credit West and VP Pearce as well the money trail is long and somewhat corrupt. I just learned this morning that one more Local Bank is out Hundreds of Thousands to the Hertel Group all involved in the Cattle and Ranch scams.Coast National Bank Loan #202-102819 lost plenty on these guys and HOB lost many millions the entire mess is going to get much bigger. One Fraud Investigator from Out of State is putting a very big case together to submit to the US Attorney's office for a Indictment of the Perp's and some Bank officials.

By: 4Warn on 1/12/09

Being the honest, upstanding, country folks they are, I am sure John and Dee would appreciate the old saying ….

…. "Somebody get a rope"

By: Kmikelonis on 1/12/09

Like the tag line says…

'Expect More'

By: shingh on 1/12/09

HOB does have some questions to answer and I doubt it will be done on the local level. The DA's office is 100% in the dark as to what is going on at the federal Level. Watch who is behind the HOB 7+ Million dollar loss with SLO-HAAS, LLC check the others such as:

SMR-Ventures, LLC

HFL Express, LLC

Hundred Acre Wood Too, LLC

KITCO Holdings, LLC


SMR-SLO Properties, LP

SMR=Santa Margarita Ranch







all lost monies on these deals and more is to come. So if anyone has valid criminal or you suspect Criminal Wrong doings fax your information to US Treasury CID 805-383-0162 and remember false or perjured information is a Federal Felony, just the truth of tax fraud, money laundering, tax evasion, bank fraud, loan application fraud, bankruptcy fraud, illegal transfer of assets to avoid creditors etc..

By: investless on 1/12/09

Frederickson is obviously an ambulance chaser. He tells investors he knows everything about this case, but it is obvious he is clueless. His good looks and kiss ass personality have taken him far, to a point. What is about some attornies who see a group of seniors who have lost millions of dollars, smell the rotting flesh, and dig for the few remining dollars, with their money grubbing fangs.

By: Nameless on 1/12/09

Seems like Heritage Oaks Bank will have a lot to answer soon