Investor funds diverted to build go-cart track

August 24, 2009
Tony Gaspar's go-cart track

Tony Gaspar's go-cart track


A North County developer financed a go-cart track at his Templeton home by having the asphalt contractor change the work address so it would be covered by a group of Real Property Lenders’ (RPL) project investors, according to the contractor who did the work.

In 2005, Tony Gaspar contracted with Clint Osborne to do $39,873 worth of grading and paving work at his home on Climbing Tree Lane in Templeton. The five and a half acre estate includes tennis courts, a go-cart track, two fire pits, a custom pool with fountains, a separate guest house, and other amenities.

Gaspar failed to pay Osborne for the work on his house, but offered to disburse $15,000 from RPL construction loans if Osborne would replace the invoice with one that claimed the work had been done at a Gaspar proposed development on Ranchita Canyon Road. He sent Osborne four checks for $3,750 on Nov. 6, 2005, according to the receipts.

In January 2006, Osborne installed culverts and graded road extensions at Gaspar’s RPL funded Forked Horn development. Two of the invoices he submitted to Gaspar were legitimate. However, the third invoice for $24,873 was paid to cover the remainder of monies Gaspar owed Osborne for his back yard go-cart track.

“He asked me to bill the work to another property,” said Osborne of Clint Osborne Grading and Paving. “I thought he was cheating on his taxes.”

The torturous path of monies invested in one of the lots billed for Gaspar’s track provides some transparency into RPL’s hard money lending practices, which have already cost hundreds of local seniors’ portions of their retirement funds.

In February 2006, RPL solicited and collected investments from 12 individuals for a proposed single family residence on Reindeer Place, part of the Forked Horn development. Though the loan was slated to mature a year later, Gaspar failed to begin construction.

RPL continued to entice investors to invest in the property and used those funds to cover interest on the previous loan in an apparent Ponzi scheme, according to RPL financial disbursement records.

In June 2007, Gaspar stopped paying interest on the loan. Upon discovering Gaspar had not yet broken ground on the project, a group of investors filed an action that resulted in a judgment against the developer.

Gaspar and his wife, Sue Gaspar, filed a bankruptcy petition on Nov. 17, 2008, stating more than $3 million in estimated debts which froze the investors’ judgment.

Gaspar’s debts include $62,746 owed to Osborne, $1.1 million owed to San Luis Trust Bank, $145,000 owed to Heritage Oaks Bank, and $60,722 owed to Filipponi and Thompson Drilling.

In July, Gaspar filed a claim against the investors stating they had not fully funded his loan. In addition to billing for construction draws on a project that was never started, Gaspar’s loan statement charges investors $145,341 for the one acre parcel. The current value of the lot, according to a local broker, is between $60,000 and $100,000.

Between 2004 and 2007, Gaspar transferred the land five times between different Gaspar holdings and family members. In 2005, Gaspar Inc. lent Gaspar Development Inc. $4.57 million on the undivided tract of land, almost twice what he had paid for the property a year earlier.

A few months later, RPL began dolling out construction loans on 14 of the property’s one-acre lots.

RPL enticed more than 300 investors to fund $55 million in hard money construction loans. The California Department of Real Estate filed an accusation against the lender in May that states RPL principals Rodney Jarmin and Tammy Jordan lending practices included “substantial misrepresentations, fraud, and dishonest dealings.”

Don Fransen, an 80-year-old former regional sales manager for Quaker State Oil invested in several RPL projects including the lot at 5980 Reindeer Place. He doesn’t expect to get his investments back during his lifetime.

“We are now living month-to-month,” Fransen said. “Maybe the kids will be lucky and will be able to cash some of these through.”

Gaspar did not return calls seeking comment.


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Member Opinions:

By: cheseburger on 10/26/09

Okay these guy’s answering machine must be off because they are not returning my call, so just maybe Ron Berry is in on it too? But Noco guy is really annoying and he should at LEAST look for red lines, be fore he posts, I am the pore sap who lost every thing, you can smell your own breath like Gearhart, hell you probably are Gearhart. And if you are, I still have faith you will be brought to justice and your head will be put on a post.

By: cheseburger on 9/13/09

Allgreedy, maybe your not eating enough peanut butter and bread line food, how dare you say this is investors fault, the D.O.C. has revoked Hurst’s license so at least they can’t keep taking money from senile old people, who trusted the (GOB)citizens of the year, these crooks have broken so many laws, like Maddoff they are going away, and please post facts regarding Ron Berry and Josserand, or even pending facts, not bullsh*t on how long it took to finish and final a house. I am waiting for proof but, interested in your accusations. What exactly is your beef with them, the legal defense, that these rich guys, (our money), have is incredible, why don’t you go it, in pro per?

By: Zuke on 9/4/09

It still amazes me that people smart enough to earn & save hundreds of thousands of dollars (or millions), were dumb enough to pour all that money into all these fraudulent developers/lenders, to supposedly make an unbelievable rate of return…

By: CitizenCane on 8/29/09

DA has more pressing concerns like homeless guy catching and eating a trout from the San Luis creek.

By: slojustice on 8/28/09

Where is the DA on this? This guy is a predator and a crook. Why is he still in his house? And why would anyone use him for anything. To find out he is back in business is disturbing.

By: Cindy on 8/28/09

BTDT, Hahhahaha, That was good!

By: BeenThereDoneThat on 8/27/09

Saw the cartoon. Pretty funny. Sorry your name was on the list mule. ;-)

By: bluemule on 8/27/09

One cartoon is worth a thousand words:

By: Wonderboy on 8/27/09

I see that Tony was granted a real estate broker’s license from the State of California on 08/01/08. License #01375483. Watch out. Maybe he has reformed.

By: Black_Copter_Pilot on 8/27/09

than’s for the clarification, Cindy

If it’s noise, it begs this question:

Did you hear me?

By: Nancy on 8/27/09

LOL Laura, LOL, Too Funny.


By: Cindy on 8/27/09

BCP say’s “I put up a comment that was deleted.

Thought it was you, but mebbe old age has gotton the better of me or, someone has my password ”

Hahhhahhah I saw the comment you put up that got deleted. I mouthed back at you and mine got deleted too. So we are either both suffering from old age or someone has our passwords or………..It was NOISE.

By: Laura on 8/27/09

Allgreedy , “I had money on some Gaspar projects and I could not find any problems other than a lack of money.”

Dah, Yah wana know where $39,873 went?

By: Black_Copter_Pilot on 8/27/09

I put up a comment that was deleted.

Thought it was you, but mebbe old age has gotton the better of me or, someone has my password

By: George on 8/27/09

Huh? the only comments deleted were “NO you’re

Stupid” type noise, simple as that, there is no editorial bias on this end.

By: Black_Copter_Pilot on 8/27/09

Well George

Let me say that I’m suprised, yet pleased that you have left Allgreedy’s statement stand, seeing that the PG is/was an advertiser here.

Gives me some hope

By: George on 8/27/09

Add or Bring something new to the discussion or do not post.thank you

By: dhgscw on 8/27/09

Some of the boys and girls posting to this site are getting pretty intense in their remarks. It is true that we all have first amendment rights, but at some point we step over the line and into liable and slander. These cases have not been heard in court. Are you sure you have your facts accurate. For more info on the subject go to:

By: Cindy on 8/27/09

Allgreddy and WTF,

There are several scenario’s that you failed to address. How about the fact that EFI funded projects at over 300+% ratio to value?

How about Jay Miller funded Gearhart and Shores projects 100% up front rather than in progress payments and the result was that nothing ever got built and the money disappeared in a bankruptcy? How about both lenders misrepresented the appraised value of real estate and failed to disclose existing debt on projects? How about RPL, who obviously over inflated the construction costs of an investor funded project to build a go cart track for their kids? I could go on…. Anybody know where Linda Kennedy is hiding? I also find it difficult to believe that the DRE didn’t take exception to the funding of loans with out side investments where the completion was contingent on new investments. That just isn’t a viable investment or business plan. If the DRE recognized that this “tactic” was in play and turned an eye then they should be hung out to dry.

By: Black_Copter_Pilot on 8/27/09

well, well, well

Allgreedy reports, we dicide.

By: BeenThereDoneThat on 8/27/09


Glad that you point out that it was the LENDER who should have watched this. I couldn’t agree more. Had they done their JOB, the INVESTORS would not have been taken.

So with myself and others agreeing with WTF, I am glad to see that we all agree that it was not the INVESTORS.

By: hotdog on 8/27/09

I’m seeing some negative comments about the Phoenix group. Since a number of investors have signed up with them (and, by the way, for very little up front money) I’m sure a number of readers would like to see some back up or proof of those comments.

Innuendo and rumor is worthless, give hard facts and data please.

By: Paso_Guy on 8/27/09

Allgreedy is correct in his comments regarding the Phoenix group, but the biggest rip-off may be whats being charged by the court placed EFI bankruptcy trustees.

They are making $ hand over fist with no apparent accounting. Has anyone with an EFI interest even been given a ststus report from them? I call and e-mail with no result.

By: Cindy on 8/27/09

They all had the same thing in common. Borrowing from Peter to pay Paul.


By: George on 8/27/09

“George why just delete mine, Allgreedy said I am ignorant so what is wrong with stupid when it fits!!!!!”

because it brings nothing new to the discussion. note: if you want to ask about a deletion use the email, so as not to clutter the topic discussed with a bunch of noise.

By: George on 8/27/09

comment deleted,stop the name calling, stupid finger pointing . Bring something new to the discussion or do not post.thank you.

By: WTF on 8/26/09


You are the one who is ignorant, or is it just stupid. You wrote when the funds dried up. WWwrong stated the lenders never had all the required funds to FULLY fund loans they had made. Funds would not have dried up if the lenders had all funds on hand to make all their loans good.

Do the math, if lender A has 500K to lend out and he or she makes a 500k loan, they get their 3 points (15k) and their 1 or 2% service fee. Or they go out on the line for 3 loans of 500k(1,500,000) at their 3 points(45k) and their 1 or 2% on 1.5 million and scamble around and find investors to satisfy the commitment they made. The lenders saw dollar signs like 7’s on a slot machine. When money was turning over, things fell into place. When it stopped, we all know what happened.

It would be interesting to see how many loan commitments were made when the lenders had all necessary on hand. When they made loans and did not have all needed funds, everyone was a victim, except the lender with their points in their pocket. And yes, the points were paid up front at the initial funding of the loan.

There is a need for these types of loans and it creates an opportunity for investors to receive an attractive return on their investment. Not all of the builders or developers were crooks. Some good ones got caught in the middle of loans that could not be funded in a slowing real estate market.

Bottom line is things would have never got to the point it is at if the lenders would have kept an eye on the projects they loaned on, not made loans they didn’t have money for, and had the balls to pull the plug and foreclose on the borrowers whom could no longer pay the interest.

People have commented on what we can do so this does not happen again. How about back to the days when the builder actually had some of their own CASH into the project so they had something to lose too. Don’t FULLY fund the loan to the inflated appraised value giving the developer all their profit up front with little or no motivation to finish at all. Developer profit should only be realized at the time the investor loan is paid off. Requiring the builers have something to lose would make a world of difference

By: BeenThereDoneThat on 8/26/09

What went wrong.

Glad I saw your post before it got deleted. It isn’t yet but I put money that it will. Thoughts stated well.

By: whatwentwrong on 8/26/09

Allgreedy. No shit when the investors stopped bringing in money the ball stopped rolling. Just what I said, but if the original funds went to the projects they were slated for the problem would not have existed dumb shit!

By: Al on 8/26/09

I get offerings from Heritage Lending (Candy Wells)for 1st Trust Deeds on a regular basis. What’s up with this round?

By: whatwentwrong on 8/26/09

Allgreedy and Bluemule, everyone is entitled to their opinion, the two of yours however I can only asume came from your stupidy in this case! Yes their was risk associated with investing your money with these type of lenders and they should have been as follows. 1. if the contractor took off with the money or did not know what he or she were doing, at which time the lender should have cut them off and 2. if the market value dropped to less than the appraised value at the time of completion all normal stuff.If the loans were issued thru a conventional lender like Wells Fargo B of A etc. the money promised would have been their to complete the project. Granted it may have been worth less than thought but the investors would have had something other than an empty lot! I am not sure where you get your info. but your source is way off base.

By: BeenThereDoneThat on 8/26/09

Oops forgot the t. Honesty

By: BeenThereDoneThat on 8/26/09

I love what Cindy said. Key word HONESY.

Now onto these continuing life lessons that the investors deserved this, here is a refresher lesson.

This started at the top. Your Bernard Madoff’s of the world.

It started with the sub-prime. Remember garbage loans getting repackaged into something that looked legit?

All done in the back room with most people not knowing. Lack of honesty.

People selling other junk like option a.r.m.s (go read up on these to scare the hell out of yourself, different than just a.r.m.s) to people to keep the machine going. Lack of honesty.

People taking money from where it was suppose to go and putting into their pockets or other places. Lack of honesty.

We are a society that should work on honesty. I know we don’t but when others lie, cheat, steal and game the system who is worse?

The guy that was foolish because he thought hopefully in honesty or the piece of s**t loan officer?

For all you arm chair quarterbacks that think you are so above this in your knowledge of not getting taken, you did get taken.

Your state (Califonia) got taken. It invested it’s pension funds etc. in the markets.

Your 401k got taken. Even with good companies, alot of those reinvested into crap, like sub-primes. Don’t think so? Look at insurance giant A.I.G.

So I guess for all the meatheads here that are so smart you must have nothing? You must because you must have never invested in anyone before. You couldn’t have because you are all smart enough to know no one is honest in the first place right?

You have no 401k? Stocks? Pensions? If you don’t then I can see that you are better than the rest of us here. If you do then welcome to the club meathead. You are human and fallable. Must hurt to realize that huh?

By: Cindy on 8/26/09

BTDT, bluemule has been getting under my skin.

I didn’t have any investments tied up in any of these scams. I lost money in the 2000 NASDAQ crash but was able to rebound. Like you said, at least when an investment is legitimate there is a tangible asset to work with. These investors were outright duped and swindled at every turn of the corner. They were even defrauded by a title companies complicity! It just really burns me to no end to see these innocents taunted for their belief in mandated checks & balances accompanied with honesty. They should have been able to have faith in the signed contracts, after all that’s what this country is and always has been built on. Signed Contracts with legitimate attachments including honest appraisals and copies of researched title disclosure.

I agree with Hotdog, anybody that wants to blame the investors should just SHUT UP and GET OUT OF HERE.

By: BeenThereDoneThat on 8/26/09


Don’t let Bluemule goad you. Look at all the posts. He is the only one really sticking it to investors.

Do you really think anybody could be this freaking brain dead?

I think he is just trying to get under peoples skin.

By: Nameless on 8/26/09

By: Cindy on 8/26/09

When UncoveredSlo first broke the EFI fraud in 2008, many builders were logging on saying that their projects had been cut off from lack of funding in mid stream. They explained that they had been on schedule and would have completed construction (even before the bubble bursts) but that EFI had defaulted on the financing.

Your comment is an understatement of truth.

By: Cindy on 8/26/09

bluemule says: “My question now is – what are you going to do differently in the future to make sure the same thing or similar doesn’t happen again? (Assuming your losses weren’t total and you’re still in the game.) Pointing fingers and casting blame after the money’s gone is not part of a viable investment strategy.”

bluemule – Who the hell do you think you are, everybody’s mother? You are so fuc*king condescending.

By: bluemule on 8/26/09

Apparently a good number of investors in these crooked podunk lending scams are still resistant to taking responsibility for their loses, even though they, and they alone, made the decisions on how, where and when to deploy their capital. My question now is – what are you going to do differently in the future to make sure the same thing or similar doesn’t happen again? (Assuming your losses weren’t total and you’re still in the game.) Pointing fingers and casting blame after the money’s gone is not part of a viable investment strategy. For starters I might suggest due diligence and diversification. If these concepts seem foreign to you or maybe just too much of a hassle, by all means consider sticking with US treasuries and FDIC insured CDs.

By: Cindy on 8/26/09

When UncoveredSlo first broke the EFI fraud in 2008, many builders were logging on saying that their projects had been cut off from lack of funding in mid stream. They explained that they had been on schedule and would have completed construction (even before the bubble bursts) but that EFI had defaulted on the financing.

I would also like to add that many investors placed their funds based on building plans, prior to construction, so there would have been nothing for them to check on at the time. Also “swindlers” like EFI placed many investors into a collective pool so their was no exact project to identify (bad move investors). This is a small county where many people know or know of each other. The investors in many cases were dealing with long time residents who had fostered a good, honest (albeit hindsight is 20/20) name.

By: Paso_Guy on 8/26/09

Let me throw this out there

When the RPL loans went bad and the lenders quit paying their interest, there was still money in the construction fund.

RPL had no problem continuing paying themselves servicing fees from the constuction funds. These loans were non-performing, yet RPL drained the fund while doing nothing productive to save the investments from further devaluation.

Some would call that theft

By: hotdog on 8/26/09

WWwrong has brought up some good new info. Many times the broker made promises to the builder and then cut off funding, leaving the diligent and innocent builder hanging.

This, lack of building oversight and a host of other problems have led us to this point. Though I still hate it when anyone throws rocks at the investors they do have a role in all this but it is minimal compared to all other parties.

In my talks with an honest but lax broker the insanity of the times has become evident. Money was flowing, loans were sought to put it to work, everyone wanted to make a good return (nothing wrong with that). But folks got too loose, too lax, the oversight became limp, the Ponzi schemes were successful so there was no indication of fraud, the brokers had fancy offices and homes and cars etc indicating legitemacy and success. No broker wanted to turn a loan away or the borrower would just go to another less cautious broker and the fees would be lost.

Many, perhaps like the crooks at Hurst, just handed all the money to crooked builders like Gearhead without any oversight (required by law). Money was comingled in a tangled web of accounts and high living.

How were the investors to know anything? Well, they could have and should have perhaps driven by their projects to see if anything was happening, but they got their payments so ‘what’s the worry’? For decades some of these companies seemed to be successful and all was well.

Looking back is easy, at this point. Even with Madoff, he was found out in the early 90s but no one (in the gummint) listened to the whistle blower.

How many of you really digged into the quality of the tires you bought for your car, the safety of the medicines you take? Not much, you just took the word of your tire dealer and doctor. Same thing here, life is like that.

Sure, a couple of savvy investors declined a certain loan here or there because they took a hard look, but the masses didn’t have the inclination or expertise to do much. And in the beginning what could they have done? Many asked probing questions and did some digging-they were lied to. Since all this stuff is done one by one and all the investors were kept secret from one another there was no cross talk or easy ability to determine anyting until the house of cards came down. The DRE and other agencies were supposed to watch these things, do annual audits of brokers etc-they either didn’t or did a crummy job.

Though NoCoGuy made some good points on these issues I object to the continued blame being laid at the door of the investors. And in light of the devastation to thousands of people (and the county) I find it cruel to dwell on this least issue in this saga of crime. I dare say that many who have not suffered directly will also lose out as over 1/2 a billion dollars has been sucked out of our economy by a small group of thieves-that affects all of us.

By: BeenThereDoneThat on 8/26/09


Glad to see others that get it.

By: whatwentwrong on 8/26/09

Lets layoff the investors and ease up on the builders of which most were honest and lets get to the root of the problem, the lender!! As I stated before they lent more than they had to get the points and junk fees up front which was also taken from the investor monies. Does anyone beleive any investor would lend money or an honest builder would begin a project knowing they may not be able to finish for the lack of available funds from the lender? The lender mislead everyone involved both investor and builder.I will agree their were some greedy builders who were in over their heads but this should have been policed by the lender who should be managing investor money not just letting it fly out their door without any checks and balances!!

By: Nameless on 8/26/09

whatwentwrong You must know something others just coming around to recognize.

By: Nameless on 8/26/09

Just because both investors and builders were fleeced, it doesn’t mean investors were greedy. Irresponsible maybe. They should have go out and look at the project personally even if it needed a days drive. Talk with the builder and look at their plans. After all, when you pluck down hundreds of thousands of dollar,that’s the least you could have done. When the note became due, check with the builder what is the problem. Agree, its easy to give advise at this point, but some of the investors with their advanced age should have been more on top of their retirement money.

Lets say, you have a mill at your local bank tied up in a CD. It comes due. Wouldn’t you be alarmed if they just tell you; we can’t give your money, but have another good deal for you?

For the more sophisticated investors, there is no excuse. When one takes out a Mill. Dollar at 5% interest as HELOC than takes it to one of the hard money lenders for 11 – 12% return, they look smart at the time. Now they look stupid. Just fess up bro.

By: NoCoGuy on 8/26/09

hotdog, I typically let my argument speak for itself but felt that I must respond to your false accusations lest you feel that you have succeeded in bullying me off the site. I am a long-time reader, first-time poster, and I must have missed the bulletin where you were put in charge. If you would have read my posts I actually agree with you that this was fraud and that the brokers/developers were evil. You must have been one of the poor, dumb saps that lost everything, and for that, I’m truly sorry. It serves no purpose however to sugar coat it and pretend that these were great investments with reputable firms. Hopefully, some good will come from this, and we can educate the general public about prudent investment choices. This article is about misappropriation of investors’ funds; my posts are relevant to that topic. Nice try in running me off, but I’m not going anywhere.

By the way, lay off the sharp sticks: it appears that you have played with them for too long.

By: whatwentwrong on 8/26/09

Two things went wrong with all of the loans granted by the lenders mentiond in this and other articles posted on this site. First the so called develpers were not properly vested in the projects. Second the lenders loaned more money than they had in hand from investors! If you have 500k you should not fund 2 million for the construction of new housing projects. Which is just what happened! The lenders spread a small amount of investor money over a large number of projects totaling millions in hopes more investors would come in and backfill monies need to complete the projects. All the while collecting 3 points to grant the loan and receiving 1 point per month so service the loan. Not a bad deal if you are the lender collect points on millions you promise developers which you never had and taking it off the top leaving the construction funs short from the get go. Had they only funded projects they had money to complete which every investor thought was the case, we would have completed homes we could take back with the possibility to sell.

By: Nameless on 8/26/09

Sounds like the paving contractor has an ax to grind. Now that the guy is beaten, he is coming forward with information. Where the hell was he since 2006? he went happily to cash the check with no care where it came from.

A recent conversation with a local banker (not HOB) was disheartening and revealing. Expressing my sympathy about the investors who lost their hard earned money and retirements, he made a sad comment; All those poor folks came to the bank getting their hard earned money out to take it to one of those hard money lenders for the nice returns vs. the meager interest banks paid. “We begged them not to take all their funds, trying to explain the fallacy of putting all your eggs in one basket particularly at their age”. No takers just took the money to HURST, RPL, EFI 21ST CENTURY. Now the entire county is paying a heavy price not only individuals. With close to $700,000 Million out of circulation in a county the size of SLO is significant.

Absolutely no excuse to commit fraud. however there is more than one side to the story.

Good riddance. Top of it many of these investors could be liable to litigants later on.

By: BeenThereDoneThat on 8/26/09

To quote Dr. Seuss. GO DOG GO. Love your post HotDog.

By: hotdog on 8/25/09

NoCoGuy, I’ve covered the topic you seem so self righteous in trumpeting in every post, that the investors were greedy and stupid. That they didn’t check things out etc. You do make some sense but mostly you’re a creep for harping on that.

Many investors did check things out (to the best of their ability)-but were then lied to and manipulated by crooked brokers and developers (such as one who was Man of the Year, Kelly Gearhead).

You are a new troll, I wonder if you have come on here before under a different handle. Which thief are you anyway? I have often invited creeps like you to meet me for a game of sharp sticks in the park. You make me sick, blaming the victims. Many thousands (most of whom are elderly and it is a special crime to rip them off) brought to their knees, many charities heavily damaged-this carnage wrought by callous and selfish bastards. Now slime like you comes along with your callous attitude to heap more abuse on those who cannot fight back.

You’ve had your little say, many times. The subject of these exposes are fraud and thievery, stick to that or get off the site.


NoCoGuy: Absolutely! The old adage “Buyer beware” is tried and true. It is human nature to believe that at the end of the rainbow is a pot ‘o gold but as we have learned the hard way, it usually is just the end of the rainbow. If we didn’t believe that we could make easy, fast money, then we as a State would not have implemented the Lottery!! Which, by the way, was supposed to save our schools – but that is a different argument for another time. I feel bad for all those that lost monies, whether they were suckered, swindled, bamboozled, screwed, etc. Karma has a way of setting things right. I hope that it is sooner than later.

By: JorgeEstrada on 8/25/09

Being funny aside, not only do people hear what they want to hear, they also justify their temporary loans. This guy probably thought inflation would cover his abuse. In addition he problably thinks it’s ok to rob a bank if the intent was to put the money back after he hits the big one in Reno. Again, since the banks have laws that cover them, the crook goes to jail but for the so called investor, you and I, we get to read about his care free life. Buy a safe….

By: NoCoGuy on 8/25/09

Roger F, I agree with you on most of your comments. The investors believed what they wanted to hear. I also doubt that little disclosure was given during the process, and I’m sure that many promises were made. I also agree with the statement that if you don’t have it to lose, don’t invest it. However, I stand by my statement that if they invested everything in high risk real estate transactions to 1)those that were not even proven developers, or 2) those that had such horrible credit they could not get bank financing, or 3) those developers that had little invested in the project themselves, or 4) those developers that couldn’t even pay interest on the amount borrowed and the investors included an interest reserve in the loan, or 5) all of the above, greed or stupidity got the best of them.

I won’t go as far as to say that the state of California is complicit in the fraud perpetrated on the investors, but it was like the Wild West where anything goes with little oversight. Because they were licensed with the State, it gave these operations legitimacy. If the State is going to require companies to license, they should provide the necessary oversight.

By: BeenThereDoneThat on 8/25/09

I love all these LESSON’s. There is no lesson’s to learn. Is it risky. Of course but here is the rub. If a guy takes your money and buys fancy cars, go cart tracks, cloths, jewelery etc. with money that was to go into the investment, that is FRAUD. No risk. The risk is never assumed or started in the first place when the money wasn’t put there! How simple is that!!!!!!!

So how about this equation for all the nay sayers that are trying to defend this. You find out tomorrow that your mortage company you have been paying forever, put your money in their own pockets and now you find your house isn’t yours because you never paid ANYTHING!! You would be pissed off. Oh and you think it can’t happen?

Go research the Tribune back around the years of 88′, 89’ when the Block and Bower debacle of the 80’s was the talk. People living over off Rambulet (close on spelling) in Paso lost their houses (after they where living in them and paying money mind you), to the IRS. There was at least 6 to 12 families this happened to if memory serves right.

Long story but I can break down if anybody would like to hear about a major SCREW JOB!!

People are really cavalier till it happens to them.

Boy I should start taking collections from people who have no problem with this. That way when I screw them they shouldn’t care.

By: rogerfreberg on 8/25/09

The issue here is not stupidity or greed, per se. Most people have an inadequate understanding of what makes any investment a risk. Many normal folks close their ears to everything but what they want to believe. These ‘investors’ are not alone in underestimation of risks, the state of California continually tried to rob the retirement funds when they were artificially inflated by higher interest rates.

So let’s take a look at something close to home, some folks point to gold as a great investment because of gold’s most recent performance. However, anyone not born in the last 30 years might remember that Gold was over $ 800 an ounce way back in 1979 or so. Diamonds were also very high and this all continued until mines opened up all over the world and countries produced their own gold coins and threw diamonds on the world market. So the economic rules of supply and demand can bite ya. In addition, any investment in which the original investor places zero, ten or twenty percent down and can walk away with impunity is risky. No one can — with any credibility — have ever called real estate a safe investment. If you roll the dice 50 years in a row and win, we don’t call that a ‘trend’, we call that luck.

The real problem in the disclosure (assuming there was one) in this ‘investment’ should have read something like this: “I hope this is money you can afford to lose, because it aint safe or secure! Get back on that pony , ride home and hide both you and it under your mattress!”

The real lesson here is never ‘invest’ what you can’t afford to lose.

By: JorgeEstrada on 8/25/09

If you buy dinner and a bottle of wine, sometimes you get the hubba hubba but if you just pay for the hubba hubba and get caught, you go to jail.

This clearly understood process is not to be confused with misappropriation of funds, even if spent on go carts, ringa ding ding. In this case, it is ok to directly pay for the ringa ding ding so long as it is clearly your money. Nice try!!!

By: BeenThereDoneThat on 8/25/09

Wow I love this statement.

“And I might add that any investor who steadfastly refuses to take responsibility for his or her losses, even in the face of fraud, is destined to be a perpetual loser.”

Guess next that a person who gets murdered, raped or robbed probably had it coming to. I mean comon they probably made the person committing the crime do it.

Yep it is that mentality of society now. It is the victoms fault. You can’t blame the person committing the crime! Pathitic.

By: Cindy on 8/25/09

McDave say’s: “Is it unfair to consider banks who bought mortgage-backed securities during a huge property bubble stupid? ”

Banks have always purchased mortgage backed securities. If homes didn’t sell like crazy during a housing bubble,there wouldn’t be a bubble. Residential, single family homes are usually purchased as a long term investment and the borrows generally can weather a down turn in the market. We saw the market correct itself by 30% in the early 90’s and then rebound over the next 6-7 years. It was no big deal, people who had been upside down held on or sold at a loss, and then downsized. Back then the underwriting regulations were adhered to and that’s what made the difference.

This time around the greedy brokers and under writers overstepped all the safeguards and gave anybody a secured loan based on “stated income” and worse, then passed the “bogus paper” off to the banks. The American people have a beef with the mortgage/loan originators, not the banks that purchased the securities. Albeit, the banks did some sloppy lending of their own.

By: bluemule on 8/25/09

Excellent insights, Nocoguy. My only comment is that greed and stupidity are by no means mutually exclusive. The combination of the two makes for the perfect mark for some of these hard-money salespeople.

And I might add that any investor who steadfastly refuses to take responsibility for his or her losses, even in the face of fraud, is destined to be a perpetual loser. That capital you hastily deployed is not coming back. Take the lumps, learn the lesson, and move ahead with eyes wide open.

By: NoCoGuy on 8/25/09

The simple fact is that investing in hard money loans is high risk. Whenever there is the opportunity for high return, it is a high risk investment. The first rule of investing is to not put all your eggs in one basket. Spread it out and lower the risk invovled. If you are near retirement or retired, STAY AWAY FROM HIGH RISK INVESTMENTS. This isn’t rocket science.

The investors were looking to earn higher returns instead of spreading the risk at a lower rate. If these retirees invested all of their hard-earned money, they are guilty of one of two things: Greed or Stupidity.

I do agree that had the projects been managed properly, the loss would not have been as substantial. For that, the hard money lenders are at fault. They should have managed the investor’s money better. I have met many of the hard money lenders, and quite frankly, I wouldn’t have invested one cent with them. Talk about sleazy salesman. They make used car sales look good. While I like to think that I have great instincts, many of the investors had to feel the same thing. But, they let the hope of a higher rate cloud their judgement. Some have told me as much.

By: NoCoSkeptic on 8/25/09

When I met Josh Yaguda for the first time six years ago, I had an un-easy feeling. A feeling that this wasn’t a man I could trust.

Years later, I met Tony Gaspar and I had the same feeling. I am going to start trusting my instincts more.

By: mccdave on 8/25/09

BeenThere: Is it unfair to consider banks who bought mortgage-backed securities during a huge property bubble stupid? That seems to be the strongest basis for all the anger over bail-outs. Some people saw the crash coming and even profited from it. Goldman Sachs and others loaded up on credit default swaps, sold their MBS holdings, etc., which is why they’re still standing.

Even if there hadn’t been any outright fraud by the hard money lenders, these would have been the dumbest investments around, and the fact that a speculative bubble was accompanied by massive fraud isn’t surprising.

By: Paso_Guy on 8/25/09

Wow, I didn’t know that Tony was part of RPL and I was an investor with them from 1996 to last year. I was by their office at least 5 times a month and never saw the guy.

I was on one of the loans on Reindeer and with Tony’s cooperation, got back 82 cents on the dollar.

This article is short a statement from Rod Jarman and/or Tammy Jordan, the principles of RPL. Was an attempt even made?

It’s about time that a story about RPL shows up here, but there is more that smells here than Tony Gaspar.

CCN should look into what happened to a lot of the construction funds with RPL when the projects stalled out…now there is a story.

By: BeenThereDoneThat on 8/25/09

Oh wait and another. It is hard for an investor when the deck is stacked against you. How would they have known that Cuesta Title was acting like crooks in complicity?

How about Heritage? I can go on……

By: BeenThereDoneThat on 8/25/09

Another on this. Kelly is still living in his 600 thousand dollar warehouse in Ohio, which at this point he still owns.

He still owns properity here. I know for a FACT!

Hmm but meanwhile the investors who’s money it was in the first place, have NOTHING!!

Too bad we aren’t in biblical times. We would have stoned all these a-holes by now and been done with it.

By: BeenThereDoneThat on 8/25/09

I am at the point of HAD IT with the stupidity of saying it is the investors fault.

Let’s break this down for small minds. If you invest in something like this you have a tangible. I.e. PROPERITY!! Now if they had the properity and it was worth a million for example and the market corrected and it dropped to say 600 thousand, they would at least still have the properity and could either sell for a loss or wait till the market comes back in a few years and sell or keep then.

When you take money that was suppose to buy land or build a project and use elsewhere that is FRAUD period!!!!!!!!!!

Please I would LOVE to hear someone explain how I may have this wrong??

Same with 401k and stocks. If the price drops you still have x amount of stock and if the price comes back you can sell. My 401 took a beating last year but has come back, because I didn’t sell but I still have a tangible asset.

Yes it is risky investing in these loan companies if the market changes, in that your price can drop and you lose value but you still have a tangible ASSET!

PLEASE stop with the idiotic arguement that these people did something wrong in investing. They got SCREWED plain and simple. Hmm simple. Just like the minds that believe it is the investors who are at fault. It boggles the mind the stupidy!

By: mccdave on 8/25/09

No slight to that high-resolution reconnaissance photo, but is this the property in question? The satellite imagery here seems to show grading work for a some kind of track:,-120.643754&sspn=0.191235,0.242386&ie=UTF8&ll=35.572078,-120.639555&spn=0.002989,0.003787&t=h&z=18

A lot of richish people in this county seem to enjoy building little Disneylands on their ranches and sealing themselves inside their own private hell. You wonder how much joy a personal go-cart track brings after the thousandth butt-grinding lap, especially to the neighbors who seem to be very close to this one. Don’t you need some kind of a permit from the County Office of Abominations and Eyesores before you break ground on something like this? Of course, people inside the Atascadero city limits build motocross tracks on their property and take a huge dump on the neighbors while the police ratify their violations of the noise ordinance.

It’s not clear at the top what Tony Gaspar’s relationship to RPL is. Is he an independent developer who went to RPL for finance?

“undivided track of land” –> “tract”

By: bluemule on 8/25/09

So many people doled their hard-earned money into the lax atmosphere that it’s astounding. But they likely won’t do it again. The School of Hard Knocks is a great teacher.

By: Cindy on 8/24/09

I’m tired of people insinuating that the investors were “greedy”. The fact is that if these projects had been approached according to the presented plans, if the funds had been disbursed in progress payments and if the projects would have been on schedule then they would have been viable. Even the projects that were effected by the down turn wouldn’t have been even close to a total loss. The investors wouldn’t have come out any worse than people did with their IRA’s, 401k’s, mutual funds, stock investments and the like. It was the outright fraud, deceit and negligence imposed by the investment firms and (some) developers who outright swindled the investor’s that caused these losses.

BTDT & Hotdog are absolutely correct. These predators didn’t think anything through or concern themselves with how they were going to get away with this. They saw the money and just took it. Play now and (hopefully) never pay, they obviously thought the elderly would be easy targets. So many people took advantage of the lax atmosphere that it’s astounding.

By: bluemule on 8/24/09

A go-cart track? Sheesh – the guy sounds as juvenile as Kelly Gearhart.

As far as the investors go, they have nobody to blame but themselves. This victim baloney is hogwash. These folks were easily wooed by the promise of huge returns (when compared to truly low-risk investments like US treasuries) and didn’t bother to do their homework in assessing the risk involved or the strength and background of the folks they were handing their money over to. But on the bright side, this is a truly cleansing event – the dishonest builders and lenders are all now out of business and looking at jail time, and the rubes have all been fleeced. Time to start from scratch and begin the cycle again, hopefully with some lessons having been learned. Children, keep an eye on your parents. Parents, keep an eye on your children. Don’t let your loved ones make stupid investment decisions.

By: hotdog on 8/24/09

Right on Roo. Many if not most of these investments resulted in nothing, no collateral worth a damn. The appraisals were false to begin with, many times the money was used to purchase property (not right, it was supposed to improve the property, thereby increasing the value). Everything was a scam and crooked as hell. The trust of investors and secretive nature of the brokers allowed this to go on too long, and with lax oversight by the various agencies charged with monitoring these things we had a perfect storm.

Even in a crashing market most of the investors would be OK, or just slightly damaged IF the damn brokers had conducted their business legally and competently-they didn’t. They lied, cheated and stonewalled as long as they could.

What is so crazy is that despite their idiocy in assuming they could ultimately get away with this the crooks just kept going, living large and hoping somehow they would not be found out. Aside from having no heart, it appears they are dumb as a bag of rocks. Blows my mind, you’d think they would have some plan to survive the storm they created.

And I wonder too, where are the honest builders and brokers who have been tarnished by all these crooks? One would think they might be very alarmed they and the industry is being trashed by a very large number of bad apples. I would certainly join the lynch mob if someone in my business was a rotten bastard.

By: BeenThereDoneThat on 8/24/09

I stand by my earlier comments about developers. We just keep getting more and more every day. I am getting tired of seeing senior citizens and others getting screwed out of their money, while others buy planes, fancy cars, they put in go cart tracks, they take fancy vacations all with OHTERS money!!!!!!!!

The other developers then should stand up and say how tired they are also of others making them look bad.

This is going on WAY to much for a county our size. If my brush is broad then boo hoo.

I like many, am tired of hard working people getting screw again and again. ENOUGH!!!

If the guy is a loan officer and jumps into the developer pool, then what is he???

Sounds like a DEVELOPER!! End of sentence!

By: Roo on 8/24/09

Hot Dog, you are correct. I might also add that these investments were in a real estate development project (supposed collateral) with a certain loan-to-value ratio, not a wind-blown piece of dirt with no money left in the project…

Yeah, the RE market is down 40%; give me my 60% and I’ll RUN…how about you?

By: Cindy on 8/24/09

Lifelong is always looking for something to denigrate CCN about.

Hey lifelong, go complain to the Tribune, KSBY and every other media outlet for calling Robert F Jones, Grigger.

By the way, you get all this reporting for free so stop telling us how Karen needs to be so perfect for no financial return and no appreciation from folks like you.

By: DashRiprock on 8/24/09

The North County is simply a joke, they couldn’t do a sitcom silly enough to expose the idiots up their.

By: BeenThereDoneThat on 8/24/09

Lifelong. Not trying to start anything with you but a minor correction.

Hurst’s legal name is James but he went by Jay. I have done business with him indirectly and casually knew him and he went by Jay.

So I wouldn’t be too hard on CCN. You are both right.

By: hotdog on 8/24/09

Pretty much a lot of bull to blame the investors. These loans were not risky if the crooked brokers had not been thieves; or, in the case of at least one I know of, overly lax in administering the money.

These cases are fraud, that’s all. The deals were not ‘too good to be true’, they were just OK.

I’ll do the math for you again.

Inflation is about 4%

Cost of money is about 5%

These hard money loans yield on average 12%.

So investing in them gives us 12-4-5=3% return. Three percent profit! Big deal.

It is true many investors put way more into these gigs than prudent, or even legal. Another failure of the crooks, to limit the investments to the legal maximum of 10% of an investor’s mad money.

These slime (21st Century, Estate, Hurst, RPL, Wilson) have stolen and lost the entire futures of many people. This post would probably be removed if I were to suggest what I would submit these crooks to as an incentive for future crooks to chill out.

And don’t forget the lax and lame authorities in coming to the rescue. Incredible sloth and incompetence. Their fiddling around has allowed many of these crooks to hide stolen assets and avoid sanctions in a timely manner. Combine that with lax regulation and massive confusion in investigating and prosecuting these crimes and the victims get beaten again.

This is not an indictment of government involvement in the public good, only that lax interaction has increased the pain. We need more regulation, effective controls on what human nature often leads us to; greed and incompetence. Most or all these crooks are psychopaths, without a soul or any empathy for anyone but themselves. Shoot them…

By: Lifelongatasresident on 8/24/09

NoCoGuy, thanks for the honesty. Your are exactly right in your response. The ilk that writes this blog is only looking to stire the pot, nothing more. They can’t even get names correct, such as Jay Hurst Miller. Thats not his name, its James Hurst Miller Jr., I know i have several suits against him. They really need to do better job here and in the Tribune.

By: NoCoGuy on 8/24/09

There are more points to this story that haven’t been uncovered.

1) Tony Gaspar is NOT a developer. He was a Loan Officer that jumped into the developer pool while the market was hot. He should have dipped his toe with one, but instead took the plunge at the expense of the investors.

2) He was a Loan Officer at RPL. This is an outrage that they would lend investor money to him to develop properties while he was in their employment to do loans. Definitely seems like a conflict of interest to me.

3) He left RPL and now has his own mortgage firm: Connect Home Loans. SCARY!

4) His partner Todd Evenson was also employed at RPL and also attempted to be a “Developer”. I’m not sure if it also went south but shouldn’t be too hard to figure out.

5) The investors took a huge risk in hard money lending. These are loans to individuals that do not qualify for bank financing or do not want to adhere to the strict bank regulations. It is for that reason that the investors earn a higher interest rate: it is a riskier transaction. They took the gains and are now crying because they lost it all. They shouldn’t have invested everything into such risky transactions. This does not excuse RPL or the ilk from operating underhandedly, but it was risky. Moral of the story is to diversify. As the Good Book says, “The love of money…”. Another saying also applies, “If it sounds too good to be true, IT IS.”

Cindy and BTDT, its not fair to point all developers with the same brush. There are many that are hardworking, fair individuals. It isn’t to say that they have been hit hard by the current economic times, but they didn’t commit fraud and are working hard to pay and meet their commitments. The developers and lenders that took the investors for a ride are evil, but as in every profession it is a small percentage.

By: Lifelongatasresident on 8/24/09

Does anyone read this before it’s put out to read? I think not that RPL had 300,000 lenders! And has anyone ever delt with Osborne? He is also a crook. He knew exactly what he was doing when he wrote the fake invoices.

By: Cindy on 8/24/09

BTDT – My exact thought’s almost word for word!

I agree with every post I’ve seen so far.

Except rather than kick their butts I’d like to see them paraded through the streets wearing nothing but monopoly money pasted to them.

By: BeenThereDoneThat on 8/24/09

Good God. Is there any developer in the North County that isn’t a crook?

I would like to hear of just one. This is boarding on insanity.

By: BIG_SMILES on 8/24/09

Rany :”When do we want it???? Come on people……. ”

It’s time to kick some ass around here the way they did in Ohio.

I’m getting ready to start spitting nails at all these Son’s of a Bitches.

By: Rany on 8/24/09

Damn It, I’m tired of hearing about investigations and million dollar attorneys for the defense that the public has to pay for.

What do we want?


When do we want it?


What do we want?


When do we want it???? Come on people…….

By: AA101 on 8/24/09

Give both Garpars’ the Bernie Madoff treatment.

By: paperboy on 8/24/09

Boy what a pit of vipers these guys all are. Heritage Oaks keeps coming up over and over here. When does the fickle finger of fate point in their direction?

By: mcdonald on 8/24/09

This kind of fraud has been running unchecked and rampant in North County for way too long. It’s time to make an example of those who would fleece our seniors of their life long savings. A 3rd DUI gets a person more prison time than these criminals generally get. Lock them up for 10 years and take every asset they and any culprits or enablers own.