Former Estate Financial principal files bankruptcy

December 12, 2009

Don Vaughn, the former owner of Estate Financial, Inc. (EFI) has filed for bankruptcy, is accused of defrauding investors through his hard money lending company, and is at risk of losing his contractor’s license for failing to pay a civil judgment. [Tribune]

Vaughn sold EFI to Karen Guth and Charlie Applebaum in 1994. Vaughn than founded Country Financial and entered into a business partnership with developer Fred Machado.

The business partners owe an investor in one of their projects $150,000 due to a civil judgment. Vaughn’s bankruptcy filing could erase some of his debts.

However, the bankruptcy court is claiming Vaughn failed to provide complete information, such as his ownerships in Country Financial and All American Foreclosures. The court has given Vaughn two weeks to correct his information.

In 2007, at a time Guth was criminally misappropriating investor funds, she brought Vaughn in as an advisor and gave him an office in her building in which to handle EFI foreclosures.