Paso Robles lenders arrested for fraud and embezzlement

April 8, 2011


Real Property Lenders (RPL) of Paso Robles principals Rod Jarmin and Tammy Jordan were arrested this week for seven counts of fraud and embezzlement in connection with a scheme in which they allegedly swindled more than 700 investors out of about $30 million.

Jarmin, 72, plead not guilty Thursday in a San Luis Obispo courtroom to seven felony counts of the sale of securities by means of false statements and omissions. His bail was set at $5 million.

On Tuesday, a San Luis Obispo District Attorney investigator ordered Jarmin, who was at his country club Palm Desert home, to turn himself in by midnight or face arrest. He drove to San Luis Obispo County Jail and turned himself in late that night.

His partner, Jordan, 49, is currently incarcerated in a Montana jail awaiting a slated extradition to San Luis Obispo County Jail later this week on the same charges.

The former Paso Robles lenders stand accused of fraudulently selling securities to hundreds of investors, primarily seniors. Under their company, RPL, the duo would entice locals to invest in projects that they knew were failing, under false assurances that investor monies were secure, according to the investigation.

The misrepresentation or the omission of facts when offering or selling securities is a felony punishable by up to five years in prison and up to a $10 million fine, per violation.

Enticed by the promise of 12-percent interest on property-secured investments, approximately 700 investors entrusted their nest eggs with RPL in the form of hard money loans.

Jarmin said “people were lined up outside his door to invest their money with RPL,” according to a District Attorney’s office September 2010 interview.

Jarmin said his company’s portfolio contained more than $55 million, much of which is still owed to investors, according to a 2010 deposition.

In 2007, the California Department of Corporations (DOC) began an investigation into RPL.  The state revoked RPL’s license to sell securities in June 2008.

The San Luis Obispo County District Attorney’s office began its inquiry into RPL in December 2008 following the DOC investigation and pressure by numerous local citizens who filed complaints with the county alleging lending fraud.

The company had allegedly distributed inaccurate circulars that disclosed an outdated track record which only noted a history of four loan foreclosures, when in fact it had already foreclosed on 50 projects. The “offering circular” also claimed not a single investor had ever lost money invested in RPL.

Meanwhile, investigators say Jarmin and Jordan fraudulently used the erroneous circulars to lure 80 new investors to make 105 new deals in the amount of $9,223,000 from Feb. 22, 2007 through Dec. 31, 2007.

One of the more egregious investigation findings says that while the lending duo claimed a sound history, they managed to lure some investors into leveraging their retirement funds into projects that unbeknownst to them were days away from foreclosure, according to court documents.

For example, Jarmin and Jordan provided James Pope a property profile flyer that described the builder, Todd Evenson, as an “excellent borrower with excellent credit.” Pope said Jarmin personally told him the project he later invested in “was moving along without any problems and should be completed in a short amount of time,” court documents say.

On August 10, Pope invested $45,000 into the project. He received one partial interest payment before Jarmin and Jordan told him Evenson was in eminent danger of defaulting on the loan.

Pope soon discovered RPL had sent letters on Aug. 1, 2007 to the other borrowers on the loan explaining Evenson’s financial difficulties, nine days before Pope had invested his money into the project.

The lead investigator says he believes the RPL owners intentionally misled Pope into investing so they could use his money to pay other investors’ monthly interest payments in a “Ponzi-like” scheme.

When asked by the county’s lead investigator about Pope’s claim, Jarmin said, “I’m not going to dispute any of that.”

In her October 2010 interview with the lead District Attorney investigator, Jordan said, “that was an oversight.”

Investigators also accuse RPL principals of not properly qualifying borrowers and of misleading developers into believing the project loans were fully funded.

For example, RPL approved $1.3 million in loans for developer Jeff Martin. Even so, Martin said he did not have sufficient collateral to make the payments and that RPI failed to verify any of the information he listed on his loan application.

In her defense, Jordan described these loans to investigators as yet another “oversight.”

Martin told investigators that Jarmin and Jordan pressured him into starting his three projects which were nowhere near completion when he was informed by RPL that no funds were available to finish construction. Martin said he was deceived into believing the loan was fully backed and would not have accepted the $1.3 in loans otherwise.

Another RPL borrower, Tony Gaspar, 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 RPL project investors, according to work orders and Clint Osborne, the contractor who did the work.

These types of misuses of funds were possible because RPL failed to provide adequate oversight.

Jordan and Jarmin assured investors they would dole out money to contractors in progress payments as the properties were developed. However, they did not inspect projects as promised.

When borrowers failed to make payments, instead of foreclosing as required by their loan servicing agreements, RPL instead would cover the costs by bringing in new investors selling out more than 100 percent interest in properties.

Jarmin’s attorney, Ilan Funke-Bilu, argues that Jarmin’s $5 million bail, which is one of the largest in county history, should be reduced.

“Bail is not about guilt or innocence,” Funke-Bilu said noting that bail is supposed to be set according to issues of public safety and the probability that the defendant will flee.

District attorney officials seized Jarmin’s passport, bank accounts and assets with the exception of a truck and a fifth wheel.

“He is not a threat to anyone,” Funke-Bilu said. “What’s the likelihood of a 72-year-old man fleeing this country without a passport?”

Funke-Bilu is also questioning why a District Attorney investigator searched Jarmin’s wife’s purse and seized $5,000.

“They left her with $4,” Funke-Bilu added. “She is not charged with anything.”

Jarmin’s bail hearing is set for April 14 at 8:30 a.m. and a preliminary hearing is scheduled for April 19 at 10 a.m. Jordan will face charges following extradition.

As for the investors, even though a search is still underway for all assets and accounts owned by the defendants, it is uncertain whether investors will ever recoup their losses.

“It is my belief that aggravated white collar crime, as defined in Penal Code section 186.11, has taken place and the amount of restitution and fines will exceed $10 million which exceeds or equals the net worth of the defendants’ assets,” said District Attorney investigator AJ Santana.


“The lead investigator says he believes the RPL owners intentionally misled Pope into investing so they could use his money to pay other investors’ monthly interest payments in a “Ponzi-like” scheme.”

Gee, they like to fry small fish in this county and just take money from the big ones, $200,000 from Jay Miller. Hot topic debate anyone?


The Federal Government was forced to give Miller back his 200K on a technicality (his civil rights were violated?). I have heard that the FBI was not too happy about it.


What a bunch of crap Kevin McCarthey got Miller’s money back for him and that also means they are all off the hook as far as criminal charges, something tells me some people have plenty of good reasons to take the law into their own hands and at this point I would try to post their bail.


cheese, I’m starting to think you’re right. I was just considering that the FBI has done nothing and it’s been far too long. I wonder if they took the case with the intention of letting Gearhart, Miller and their cohorts off the hook? These players were rubbing elbows with some mighty big honcho’s when they were seeking recognition to erect the Pi Ji Ho Ta Casino and maybe you’re correct about McCarthey?

I’m actually starting to believe that they have a deal somewhere that includes letting them walk. If this is so, our corrupt gov is clearly working for itself.


Like I’ve said a bunch of times when I call the FBI in April of 08 , Deiter Wilcom calmly told me that, I could not accuse Kelly Gearhart of anything, when I asked why?,

Wilcom calmly stated because he is far to wealthy, to be accused of steeling money, imagine that. The big picture is clearly visible at this point.


It looks like Jarmin’s snow job worked on SLO Watcher. P.T. Barnum would be proud.


Speaking of fraud & embezzlement, Look at the entire & very corrupt COUNTY OF SAN LUIS OBISPO.

They have the highest number of “corrupt” government workers anywhere. Judges, DA’s, City Attorney, City Manager, Board of supervisors, etc. The list is never ending & continues to grow. This County really needs to be investigated, there’s so much corruption here, too numerrous to even list all the “players”,

SLO Watcher

Wow, This article is full of inaccuracy.

Being very familiar with the Hard money business in the north county (Yes, I too was an investor), Everyone in this business knows what was going on in 2007 and there is no way RPL collected $9mil in 2007(much less attract 80 new investors).

RPL was one of the better actors in the game. RPL didn’t borrow from themselves. RPL answered their phones for years after the problems started. The principles didn’t run from the country. And if you didn’t notice, Mr. Jarmin turned himself in when it came time to answer to the charges.

Money vanished once the Real Estate market turned south and the hard money lenders couldn’t raisethe capitol to finish the projects. The DRE and the DOC did not require the lenders to have all the money collected to finish the projects when the project began. When the investors stop investing, the projects couldn’t be finished. The hard money lenders were stuck between a rock and a hard place. Even if the projects were finished, they weren’t selling and were soon upside down. Duuuuhhhhhhhh! How was this system not going to fail!

Rod and Tammy do not raise to the level of Karen Guth or her son. Linda Kennedy, Candy Wells and Jay Miller also have much more liability as well as Don Vahn who helped start this whole industry in this county! The DOC and the DRE allowed these businesses to live and exist with minimum regulations for over two decades. DRE Audits and over site were common and in very few instances corrections were made.

As a whole, it was legal for them to lend to anyone on any project. It was legal to lend to anyone regardless of their credit. It was legal to lend to an individual even if they had no money or investment in the project. Each investor should have evaluated each project as any venture capitalist would have.

Investors for fifteen plus years were knocking down the doors of these hard money lenders. Everyone wanted to make money in construction and/or real estate. They were begging for the opportunity to make 12% on their money. Greed got the best of many of these lenders but greed also got the best of major banking institutions also. Obama chose to bail them out.

There was and is no bail out for venture money. FDIC didn’t exist here. Risk was obvious and evident.

I’m not trying to justify fraud or anyones bad behavior but sometimes these investors need to look in the mirror. Rod Jamin and Tammy worked hard for the last years to try and fund these projects and see them to completion or foreclosure. That is much more than any large bank did in our huge foreclosure market.

Did you know that the Hard Money lending business is still thriving in our community? Did you know that most if not all the same rules apply as before? Did you know that there are predators out there that continue to take advantage of defaulted projects?

Pope and other investors are out there to promote their story of how they lost money on projects but I hope they learned their lesson in Venture capitalism.

Humble as me hopefully. I too was invested and lost hundreds of thousands. It was my fault! It was my money. Humble yes, Wiser…….who knows?

SLO Watcher


Pretty good spin SLO Watcher. You completely overlooked the fact that Rod continued to take service fees, even after the loans went paying…he raided the constrution funds over and over again to make sure he got his $.

You going to look the other way on his refusing to sign off on loans he or his wife’s family had $, wouldn’t sign off unless they got a greater % than the other investors, Was that legal or just plain extortion? Either way, it’s boorish.

What Rod and Tami forgot was this: If you take care of the customer, the money takes care of itself

SLO Watcher


Last time I looked, both Prudential and John Handcock continued to take fees from my retirement regardless if I was making money or not. Businesses need money to operate. All the Lending Servicing agreements provided by the hard money lenders (and I do mean all of them) allowed them to draw servicing fees regardless of the funds profitability. It takes more money and time to manage a problematic property.

As far as his families investments I don’t know. I didn’t know about those for sure but I saw his wife and his own retirement on some of these defaulted properties but they were getting paid the same as the other investors.

Again, I am not saying what happened is wrong or right. I just see facts, and much about what was written in this article was not founded in anything other than issues not related to law . The writer listed many issues without evidence such as “un-inspected projects”. Do you think that has anything to do with the law? No, the DRE or the DOC does not require inpections of anything other than tracking money to a particular project.

Also, RPL never over funded any projects that I saw. I am familiar with 25 loans at RPL and all of them were underfunded! The angry people out there want to see blood and that’s ok with me but lets get the FACTS out there not the embellishment.

I’m not totally sure about the circulars that were coming out at the time. My experience was that RPL did very few as compared to the other hard money lenders. The most inacurate ones were coming from 21st century and Heritage. Candy Wells (in my humble opinion) had the worst as far as projected property values.

My experience has been that when this whole thing was coming apart, some of the investors (5% or so) made the job impossible to overcome. I know as I sat in meetings in my own investments and consensus was impossible depending on who was invested on your loan with you.

The investors at RPL seemed the worst as Mr. Jarmin tried to give the investors more say in the outcome or disposition of the property. It was as if the rats overcame the ship. Really, everyone was just overwhelmed and there were very few true solutions to real problems.

SLO Watcher


Nice spin but when the market went south, the investors should have anticipated a 30% haircut on their principal. I have no doubt that most of them could have lived with that. When an investor takes a 100% loss, that means that the current projects were dependent on new investment’s to cover existing investments and that my dear Sir, is a PONZI scheme.

How anyone could ever be so misleading and irresponsible with someone’s savings (particularly the elderly retirement funds) is beyond me. It isn’t even comprehensible that anyone could be so disgustingly complacent.

Five years and bankruptcy isn’t even close to enough punishment. No doubt they will be out of prison in three years and will dig up a few million that they have stashed.

SLO Watcher


At RPL, investors did not end up with a 100% loss. We ended up being property owners with the other investors on the project, On the average I have recovered anywhere between 50% to 95% of my money on these properties as we finished them or sold them.

My investments at Estate Financial were different. There I lost 100% on some of my investments. RPL didn’t have the “Fund”.

As far as Ponzi scheme, I would say “yes it is” but it is a system that was set up and managed by the Department of Corperations (DOC) and The Department of Real Estate (DRE) . The same system is still in place and currently working in our county under different Hard Money Lenders. (yes, even today)

The moral to the story is; 1) CHANGE THE DOC AND DRE LAWS. 2) It’s your money. Watch it and know what you’re invested in.


So if Mr. Jarmin is so on the up and up, how about the $75,000 that the North County Humane Society invested with him? Every dime is gone.

Thank you, Cal Coast news for sticking with this story.


SloWatcher sounds like one of the “lucky” or even “privledged” investors. Sort of like the fellow from the HOB fraud that managed with the help of the bank officials and Kelly G to garner a clear property title and just minutes befor the well went dry on a few 1000 other investors.

To hear that the Humane Society got ripped off for 75K infuriates me. First the elderly and now helpless dogs and cats. No doubt countless others have similar stories about a 90-100% loss. Five years is not enough.

SLO Watcher


I am not saying Jarmin is on the “up and up”. I am talking facts and relating my experience.

Every investment at RPL was attached to a First Trust Deed on a legal piece of property. NCHS must have a Deed on a property somewhere as a result of their investment. There’s no telling what that property is worth now but it is not zero. Do you know what property they were invested on?

That has been the problem with attaching this form of business to a “Ponzi Scheme”. Every investment is attached to a piece of property through a First Trust Deed.


SloWatcher, you say that every investment is attached to a first trust deed and that does speak volumes as compared to Gearhart, EF and Hearst Financial. It’s unfortunate that these investments were based on project completion and not just land purchases, however it’s also my understanding that the value of the trust deeds were over sold beyond 100% of current market value “at the time” of investment. Regardless, if what you say is correct, then no investor should have a 100% loss.

SLO Watcher


Very well said! Yes, investments were taken for the amount to complete the project and cover necessary interest. If the project were to go dormant or incomplete do to i.e. market, availability of funds, inability to sell………and then the interest reserve runs out…………..kaboom!

The project is not over funded based on the finished project value but it is over invested to what the incompete project could sell for.

This is an allowed and legal business model regulated by the DRE and DOC.

Most projects failed at RPL and other hard money lenders because the investors STOPPED investing. All projects died. Ka boom


My question is, why would a project be allowed to proceed apart from the secured investment in the first trust deeds until it was fully funded? There is where a major flaw existed in this business model.


I should add that the developers as well as the investors were all acting with the belief that their projects were fully funded. These fiducuaries not only took down the investors but many of the developers as well. They took everybody down and there was no reason for it with a little oversight, this didn’t have to happen. It was obviously about collecting fees and to hell with everyone else.

SLO Watcher

Bingo Cindy!

That’s the exact correct question. The DOC is now seeing Hard Money lenders fully fund the loan. But…the never to the industry that it is thge requirement.

Hard money lenders didn’t do it be cause the borrowers couldn’t or didn’t want to pay interest on money the haven’t used yet. Investers wanted to get paid on all the money they gave the lender. If they fully funded the loan in the beginning, the project would flounder in interest. So….collect money as needed and on the go.

SLO Watcher

Kellygirl and Cindy,

Keeping it real here but………What the hell was North County Humane Society doing investing in HARD MONEY?

What officer of that company was allowed to invest non-profit funds in such a risky investment. GIVE ME A BREAK! Who did that?


SloWatcher, I have to agree with you on this one. Although the investors were led to believe that this was a (certain) viable/safe investment because they were backed by First Trust Deeds with “supervised” progress payments on the development, it was not an investment for a non profit. Also all investors should have been qualified and how the current laws didn’t require qualification is beyond me. I was also working in an industry at the time that was solicitng investment income. I qualified every investor and turned more than a few away that didn’t meet the criteria. Something is wrong with the DRE and DOC if they have side stepped this guideline for this particular industry.

Who ever made that investment on behalf of the Humane Society is fiscally incompetent and complacent in his fiduciary responsibilities. That person should be dis-charged. I have to wonder if it was that “greedy” Dr Anderson?


Here’s the deal………….Jarmin was successor trustee for a trust where the primary trustee died and left $75K to the shelter. Well, what and opportunity for the shelter to get 12% on the dough and help his cause as well.

The shelter had to sign off on it of course.

That’s what i heard anyway…call the shelter and ask the head honcho


Any idea who appointed Jarmin?




He still commingled funds, I hope he get’s life, all the crooks deserve life in prison, or to be accidentally hit by a truck if they get off on a technicality, like O.J. Simpson.

Jack L

Karma bats last. It may take time, but evil doing does not have a statue of limitations.


I find it disheartening to learn that it took a Dept of Corporations investigation and then pressure by the many victims to spur the DA into action. Unfortunately by then the barn door had been left open for many nights and nothing was left inside the barn except for two scrawney coyotes..

The many instances of massive fraud (Gearhart, Hurst/Miller, Cuesta, etc) have been enabled in part, from a lax attitude on part of the DA and the Grand Jury system. They seem reluctant to take on fraudulent behavior by the rich and famous and corrupt officials who look the other way.

Until we elect someone who is willing to take such matters on, regardless of the persons social status and public persona, we will suffer more of the same criminal behavior which ultimately punishes many good and often elderly people.


I think you’re right about the DA, but the DA in this county doesn’t have nearly the funding to investigate white collar crimes that DAs in more urban counties does. Some of the cases you mentioned are going to be prosecuted in the future, the investigations are ongoing and cases are pending.

As far as the elderly, what were they thinking? Someone retired should not be handing their money to a hard money lender! People doing this kind of investing should be up and around and be able to go over the books of the financial intermediary themselves, and often, while their money is tied up, and someone in a retirement home or assisted living facility is NOT in that category. They did not deserve to get ripped off by a de facto Ponzi scheme, but they should have been more careful.

Sometimes I think that these old people go into wildy risky investments that they know are almost certain to blow up, because they think to themselves, “well, if this turns out to be okay, I’ll make a lot of money. And if it doesn’t turn out okay, I can scream bloody murder because the company I loaned my money to can be portrayed in the media as an outfit that rips off vulnerable elderly folks. I can’t lose!”

If these old people weren’t greedy, they would never have gone in for these schemes. As they say, you can’t con an honest man.

fat chance

Let’s hope Gearhart and Miller are next. Let’s not forget Linda Kennendy and friends!


Agreed. As I was reading this artilce I am thinking if you just change names in it to Kelly G. and Jay Miller, it would read almost identical. So Mr. F.B.I. where are we at in that case????


They bought the republican Kev,,, my good friend,,, they will all walk,,, some one will probably follow,,, hopefully. I will wear white to all there funerals.


Its mind boggling that every month it seems theirs another story about yet another corruption scandal in SLO counties real estate. Statistically speaking per capita it appears more money has been stolen or missing in this county than some small third world governments have managed to pull off by its corrupt regime. What gives you greedy bastards?


Crooks. Both should be punished to the full extent of the law. In this case, they defrauded investors and developers alike.

At least they both had the decency to move away from the county. The Yagudin family is still here with their olive oil business, participating in all the olive festivals (that I boycott because of their acceptance in that group).


Truly a fine example of KARMA . Anyone that invested with RPL/Rod knows what I’m talking about.

Squeezing every dime from investors at a time when leadership and sacrifice were called for has it’s consequences.

I do feel bad for Jordan, she was sold a sinking ship. She should have jumped overboard, but greed won out.