UPDATE: Shores pays thousands to avoid paying investors
June 23, 2009
By KAREN VELIE
North county developer Jimmie Shores, his brother Ronnie Shores, and Hurst Financial Inc. (HFI) President Jay Miller, in twisted and conflicting deposition testimonies and interviews, each maintains one of the others is responsible for paying back $700,000 to a group of 20 investors, primarily seniors.
HFI granted Jimmie Shores two short term construction loans in 2006. Miller, in turn, placed 20 investors on the deeds of trust of the two parcels used to secure the debts. Located in northeastern Atascadero, the proposed sites of two custom homes remain bare lots except for a tangled crop of weeds.
Earlier this year, Jimmie Shores told investors he had received only $15,000 of the $700,000 he was promised by HFI. After copies of the canceled checks surfaced showing the loans were fully vested by the end of 2006, Jimmie Shores said he didn’t have to repay the debt because his brother Ronnie Shores had stolen the money.
This week, in depositions, Jimmie Shores said he was unsure who took the money, though he claimed he had paid Miller $50,000 to release him from any responsibility for repaying the debt.
On March 13, 2006, Miller deposited funds in a segregated loan account. Four days later, Ronnie Shores began picking up checks from HFI for alleged construction work. Shortly after he deposited the funds in a joint account he had with Jimmie Shores, Ronnie Shores withdrew the funds.
Within two months, Ronnie Shores withdrew more than $578,000 from the account.
Jimmie Shores, the owner of two car washes, a gas station, two commercial buildings, and four residential properties, said under oath that he was unaware of the theft for months as he never reads his bank statements. He only became aware of the banditry when he went in for a construction draw in July and was told all the money was gone; Miller had doled out the funds to Ronnie Shores.
Too angry to discuss the situation with his brother, Jimmie Shores claimed he waited three months to confront Ronnie.
In December 2006, Miller and Jimmie Shores entered into an agreement that released the builder from any liability regarding the debt. According to the contract, Jimmie Shores would pay HFI $50,000, Ronnie Shores would throw in an additional $200,000, and HFI and the investors would release them from their responsibility to repay the debt. According to the contract, Miller had informed the investors of the release and received their permission to move forward.
However, numerous investors claim Miller never informed them of any such agreement nor did he give them a portion of the $50,000 payoff. Ronnie Shores, whose signature is missing from the agreement, claims he never knew anything about the release.
Nevertheless, Jimmie Shores claims the payment releases him from any financial responsibility regarding the loan.
In addition, Jimmie Shores stated he paid Robert Borba of Stinchfield Financial $5,000 to help him persuade investors to take 30 cents on the dollar. Earlier this year, Borba told investors Jimmie Shores was offering the payout even though HFI had never released the bulk of the loan, because Jimmie Shores was a nice guy.
When asked how he knew about the loan, only days after his brother had secured it, Ronnie Shores refused to answer. Ronnie Shores also refused to say whether or not he took the money. He did claim he thought Miller should repay the loan because he had doled it out.
Miller told CalCoastNews he believed the brothers had no intention of building the proposed homes and that they intentionally defrauded the investors. He claims the Shores brothers are completely responsible for paying back the debt.
However, Miller used funds from Jimmie Shores’ loan account to pay for construction work on other HFI properties. In 2006, Miller wrote two checks out of the account; he paid an excavating company $75,000 and a tile company $29,000.