Estate Financial principals plead guilty to all charges
October 5, 2009
By KAREN VELIE
The North County mother-and-son team who ran Estate Financial Inc. have been convicted of fraudulently selling securities without the proper licenses, lying to investors, and stealing or destroying property worth $3.2 million.
Estate Financial owners Karen Guth and her son, Joshua Yaguda, pleaded guilty today in the San Luis Obispo Superior Court to 26 felony counts and five enhancements.
They are to be sentenced Dec. 7 by Judge Jac Crawford.
On Sept. 24, Crawford offered Guth and Yaguda an agreement that stipulated that Guth accept a sentence of 12 years in state prison and Yaguda agree to a sentence of 8 years in state prison in exchange for pleading guilty to all counts and agreeing not to appeal.
“We received an offer from the court,” Steven Smith, Guth’s attorney, said. “It is good and fair.”
The guilty pea is conditional on the sentencing agreement being followed.
In court, San Luis Obispo Deputy Dist. Atty. Steve von Dohlen argued that the proposed sentences should be longer.
“It is the people’s opinion that it is not sufficient time,” von Dohlen said. “Hopefully we can persuade the court to add additional time.”
However, it appeared that the judge will reject the prosecutor’s arguments for more prison time for the pair.
Seven of the company’s investors asked the judge to hand down a stiffer sentence. They described health problems, sleepless nights, and financial distress as a result of the pair’s illicit schemes. One investor said the pair had threatened her if she spoke out about their financial misdeeds.
Yaguda, 49, could be released after serving another three years and two months in state prison. Guth, 65, considered to be the primary owner and operator of the failed investment firm, faces an additional five years and two months of incarceration if conditionally released early.
Enticed by the promise of generous returns on property-secured investments, approximately 3,400 investors entrusted their nest eggs with EFI. In July 2008, EFI’s portfolio contained more than $317 million in monies owed to investors, though less than $25,000 remained unencumbered.
Guth and Yaguda were arrested Oct. 16 by a joint task force including agents from the state departments of Corporations and Real Estate, the district attorneys office, the IRS, and the FBI. They currently remain in jail awaiting sentencing with bail set at $5 million each.