Court finds fraud, orders $3.6 million judgement against San Luis Obispo attorney

May 27, 2024

By KAREN VELIE

In a scheme rife with fraud and deceit, San Luis Obispo attorney John Belsher bilked his clients out of millions of dollars while living a life of luxury. The court ordered Belsher and his partner Ryan Petetit to pay a more than $3.6 million proposed judgement, according to a May 23 ruling.

After passing the bar in 1982, for decades Belsher was a sought-after land use and real estate attorney who watched as many of his developer clients made fortunes. Wanting a bigger slice of the pie, in 2012, the 59-year-old Belsher and 25-year-old Petetit created PB Companies, a development company that quickly grew to include more than a dozen projects they valued at over $300 million.

Under their PB Companies’ name, Belsher and Petetit borrowed money from banks and hard money lenders. Belsher also solicited his friends and clients to invest, a group that included Jeff and Debora Chase.

Jeff Chase and Belsher became close friends while attending San Luis Obispo High School where they shared a love of tennis and water polo. They later married sisters – Debora and Carolyn Young – and became even closer during their college years.

Even after Belsher and Carolyn divorced in the early 80s, the Chases and Belsher remained close. Five years later, Belsher married his current wife Jody and the couples continued to socialize.

In Aug. 2013, Belsher offered Jeff Chase a 100% return for investing in a 259-unit residential PB Companies project – Mission Oaks Camarillo. The Chases invested $500,000 with a promise of a $1 million return. Instead, Belsher wrote the Chases a check for $600,000 while persuading the couple to roll the remaining $400,000 into his Junction Gang mixed-use project, located on Santa Barbara Street in San Luis Obispo, according to the ruling.

A month later, in Sept. 2013, the Chases invested $400,000 in Las Tablas Villas – a 41-unit residential project in Templeton.

Then in Nov. 2013, the Chases invested $350,000 in the Tribune project. Belsher and Petetit needed $400,000 to purchase land from the Tribune which they falsely told the Chases would later be sold to other developers for $800,000 with plans to build a commercial project at the intersection of Tank Farm Road and Higuera Street.

In 2015 and 2016, the Chases invested additional funds in the Junction Gang project for a total of nearly $1.7 million. Located near Miner’s Ace Hardware in SLO, the project included a ground floor commercial component and 69 residential units.

Belsher and Petetit, however, failed to finish most of their projects or reimburse the Chases while living lives of luxury, including leasing private jets, buying luxury cars and traveling abroad.

After Belsher and Petetit failed to return the Chase’s investments, in 2018, Jeff and Debora Chase filed a lawsuit that accused Belsher and Petetit of bilking them out of nearly $3 million they invested in four of the developers’ projects. The Chases also accused Belsher of violating State Bar rules of professional conduct.

While admitting PB Companies owed the Chases for their investments, Belsher argued that Jeff Chase was not a close friend nor his client in 2013 through 2016. Furthermore, Belsher described Jeff Chase as a sophisticated investor and himself as a careless developer, in what appeared to be an attempt to protect his law license.

The Chase’s attorney Kurt Wilson argued that Belsher and Jeff Chase were best friends while providing mutiple photographs showing the couples spending holidays together.

While showing a photo from Thanksgiving 2006, Wilson asked Belsher if he understood he was Jeff and Debbie Chase’s “longtime, close and trusted friend.”

“I think I was a longtime friend,” Belsher testified. “I don’t know about trust. I don’t know what that means.”

Superior Court Judge Michael Kelley determined Belsher’s testimony was not credible.

“The court concludes that, as a general matter, Belsher’s testimony was in multiple respects not credible,” Judge Kelley wrote in his ruling. “This finding is based in part on Belsher’s demeanor when testifying as well as the substance of his testimony.”

Judge Kelley also found that Belsher violated his ethical duties and that he owed a fiduciary duty to his clients.

“The court finds that, in numerous respects, Belsher was acting to maximize Belsher‘s interests rather than the Chases’,” according to the ruling. “The California rule is well established that the attorney for the fiduciary of an estate represents the fiduciary and not the estate. The court also finds that Belsher withheld or misstated material information concerning the projects.”

In another breach of bar rules regarding ethical duties and professional responsibilities, Belsher failed to inform the Chases that since 2012 he was also Petetit’s attorney. That was an ethical duty that he provided Petetit, according to the ruling.

Over the past decade, multiple investors have accused Belsher of taking advantage of them after learning they were ill. Judge Kelley also determined Belsher was aware that from 2013 through 2018, because of Lyme Disease, Jeff Chase suffered physical and mental impairments.

“Plaintiffs have proven a pattern of fraudulent conduct that began with the first investment and persisted through all of their investments with Belsher and his associates,” Judge Kelley said in his ruling.

Judge Kelley found breach of contract, breach of guaranty, breach of promissory note, breach of fiduciary duty and fraud and deceit against both Belsher and Petetit. While the case meandered through the legal system, Petetit changed his name to Ryan Wright.

“It was with sad hearts that we initially filed a lawsuit in 2018 with our lifelong friend John Belsher and his partner Ryan Wright,” Jeff and Debora Chase said. “At the time of our filing, we had no idea that it would take five rescheduled trials, over five years of prosecuting, and five different SLO county judges to get us to this day. The defendants used every trick in the book to delay our day in court. Today, we are grateful for the outcome and to learn that obtaining justice is possible.”

During a pause in the trial, on Oct. 30, FBI agents arrested Wright at his home in Grover Beach on a three-count indictment charging him with conspiracy, falsification of records and obstruction of justice. Belsher and Wright’s business, PB Companies, allegedly paid nearly $100,000 in bribes and gifts to former San Luis Obispo County Supervisor Adam Hill.

While court filings refer to Belsher as Wright’s co-conspirator, law enforcement agents have not arrested Belsher.

Wright attended the bulk of the trial via Zoom from the Los Angeles Metropolitan Detention Center where he is being held without bail.

“John Belsher, with the help of Ryan Wright and motivated by greed, leveraged his position as the Chase’s lawyer and longtime friend to use lies and half-truths to convince the Chases to invest their savings with him,” said Kurt Wilson, with the law firm of Sweeney Mason in Los Gatos. “While he was their lawyer, he lied to and misled the Chases for years to cover up his fraud. Throughout the five years of litigation, Belsher used every dirty trick and lie possible to cover-up and escape the consequences of his actions. It is gratifying to me and the Chases that, in the crucible of a trial, Belsher’s lies have been revealed and confirmed. “