Lawsuit accuses PB Companies principals of fraud and deception
June 22, 2016
Editor’s Note: The lawsuit by Jonathan and Crystal Westbay against PB Companies, Alder Partners, Ryan Petetit and Russ Sheppell is at the bottom of this article.
By KAREN VELIE and DANIEL BLACKBURN
PB Companies principals engaged in fraud and deception in order to lure a Nipomo man to invest in their companies and provide access to his property, a lawsuit filed last week alleges.
The suit, filed by Nipomo resident Jonathan Westbay and his sister, alleges that PB Companies principles John Belsher and Ryan Petetit deceived Westbay into investing money in a development project they never finished, failed to abide by an agreement to develop a property owned by Westbay, and damaged Westbay’s’ property.
“Throughout his tenancy on the property, Petetit punched and kicked several holes in the walls in the property and caused damage to several other areas as a result of numerous drunken tirades,” the lawsuit says.
Belsher, 62, and Petetit, 30, are involved in more than a dozen proposed projects that once completed, they say, will be worth more than $300 million.
Belsher and Petetit have secured money for their projects from banks, hard money lenders and private investors, according to county records. In some cases, investors have been promised rates of return between 20 to 50 percent, according to an email from Petetit to several potential investors. However, none of their projects have ever been completed.
In Dec. 2012, Belsher and Petetit asked Westbay to invest $25,000 in a 26-home proposed development in Templeton then known as Toad Creek; it has since been renamed Oak Knoll Homes.
In a promissory note Belsher emailed Westbay, Belsher claimed Westbay would get his principal and 20 percent interest returned within 90 days. However, PB Companies has yet to return Westbay’s investment into Toad Creek, the lawsuit alleges.
Additionally, several subcontractors who worked on the Toad Creek development said they have not been fully paid. Multiple lawsuits and mechanics liens have been filed against the developers for failure to pay contractor and investors as contracted, according to county and court documents.
Four people affiliated with PB Companies told CalCoastNews that San Luis Obispo County Supervisor Adam Hill works as a paid consultant for the development company. Hill identifies himself on a statement of information filed with the state as the “managing member” of San Luis Consulting, one of 33 limited liability corporations tied to PB Companies.
While attempting to woo Westbay, Petetit bragged that he was working with Hill, Westbay told CalCoastNews.
Nevertheless, Hill has repeatedly denied that he has worked for the developers, asserting on state financial reporting documents that he is paid to do writing and editing for a publishing company.
Westbay’s suit, filed by attorney Michael McMahon with the Paso Robles firm of Carmel & Naccasha, says Petetit approached Westbay in 2011 regarding plans to build a four-unit housing development in Arroyo Grande. Petetit asked Westbay to purchase a property with one home already built on it, and later Petetit promised to return $15,000 of $20,000 in closing costs. The remaining $5,000 would buy Westbay a 10 percent profit when the project was finished.
However, construction on the proposed three homes was never started, Westbay said.
In May 2015, Westbay signed a purchase agreement with Alder Partners, an LLC owned by Belsher, Petetit and PB Company investor Russ Sheppell. In the agreement, Belsher, Petetit and Sheppell agree to purchase Westbay’s Arroyo Grande property within 12 months, which they failed to accomplish, Westbay said.
Even though the developers failed to start construction on the additional three homes, Petetit asked to rent the existing home for his own residence, Westbay said.
Petetit, PB Companies and Sheppell, wrote checks to cover the rent, but $27,000 in checks bounced, the lawsuit says.
Multiple calls to Belsher and Petetit’s office went unanswered.
Westbay and his sister Crystal Westbay are asking the court to assist them in evicting PB Company employees and Petetit’s family from their Arroyo Grande property, return of their investments, payment for damages and court costs.
In the past few years, the Belsher and Petetit team has been accused of breach of contract, commingling investor funds, operating a Ponzi scheme and not compensating contractors. In addition, Petetit is currently facing five felony charges for reportedly choking a girlfriend and smashing her head through a window.
Following Petetit’s arrest, Belsher changed the name of PB Companies several times and announced a separation from Petetit. However, both men continue to work out of the same office.
Jonathan Westbay, who at one time considered Petetit a friend, said there are many people involved with Petetit and Belsher who were never paid for their services or investments.
“I know there are many people who have been physically or financially abused by these tyrants,” Westbay said. “I know that you might feel afraid to speak up or that your voice may not be heard. My answer to you is that you do have a voice and you do deserve to be heard. Only you can make a difference.”