Author: Karen Velie

ESTATE FINANCIAL UPDATE: Conflicts of interest?

Posted by Karen Velie | Jan 11, 2009 | Uncovered SLO | 0 |

By KAREN VELIE

Several key players in a hard money lender’s federal bankruptcy proceedings have apparent conflicts of interest, a situation which may further complicate investors’ efforts to recover hundreds of millions of dollars in lost assets.

Trustees appointed by the Santa Barbara bankruptcy court are trying to sort out the convoluted financial dealings of Estate Financial Inc. (EFI) and EFI Mortgage Fund of Paso Robles with the assistance of an investor committee chaired by John Lacey. Roger Frederickson, of the San Luis Obispo law firm of Sinsheimer Juhnke Lebens & McIvor, LLP, and Santa Barbara attorney Peter Susi represent Centennial Livestock LLC, according to court records.

John Lacey is a principal owner of Centennial Livestock LLC and the single largest investor in EFI with more than $3 million placed in EFI’s Mortgage Fund.

Yet Lacey and his livestock LLC’s attorneys, Frederickson and Susi, apparently did not disclose that John’s wife, Dee Lacey, sits on the board of directors of Heritage Oaks Bank, which reportedly lent EFI president Karen Guth $5 million, originally unsecured. A county prosecutor has suggested Heritage Oaks Bank may have “dirty hands” regarding its financial dealings with EFI principles.

BULLETIN: $8 million claim hits Paso water plans

Posted by Karen Velie | Jan 9, 2009 | Uncovered SLO | 0 |

A group of North County residents has filed a claim against the city of Paso Robles to recover $8 million in water and sewer fees they say has been improperly levied against property owners and ratepayers for the past six years.

John Borst of Concerned Citizens of Paso Robles (CCPR) said the claim was filed earlier this month for “damages as a result of violations of [state constitutional amendment] Prop. 218.” Four of its members retained the Manhattan Beach law firm of Huskinson, Brown, Heidenreich and Carlin, which specializes in taxpayer refunds and class action lawsuits. Such a claim, almost always denied by city lawmakers, is a precursor to a lawsuit. Paso Robles officials have 45 days to respond.

Big-money frauds top our 2008 investigations

Posted by Karen Velie | Dec 31, 2008 | Uncovered SLO | 0 |

By THE EDITORS

A scandalous stack of brazen fiscal rip-offs and obscene financial schemes that today imperil the very economic stability of San Luis Obispo County is the most important news story of 2008 – and readers learned of them first through a string of investigative reports on this site beginning March 14.

In a groundbreaking article headlined “Hard money lending schemes creating fiscal chaos, devastating SLO county investors,” we reported that “a number of SLO County investment firms have allegedly participated in schemes that may already have cost local investors more than $500 million, setting the stage for a colossal collapse unrivaled in this state’s history.”

DUMPSTER CHRONICLES: Web of deceit

Posted by Karen Velie | Dec 22, 2008 | Uncovered SLO | 0 |

(EDITORS‘ NOTE: For months, a concerned investor sifted through Hurst Financial Inc.’s trash, tirelessly collecting eight bags of “Post-it” notes, hand-written letters, and typed documents from the imploding lending company. The investor then shared that trash with us. Part I of the Dumpster Chronicles reveals how Hurst Financial Inc. principals knowingly defrauded investors. Part II explains how district attorney’s officials only grudgingly investigated the lender.)

By KAREN VELIE and DANIEL BLACKBURN

PART THREE

Investors and creditors who have lost millions of dollars to local hard money lenders may find financial reprieve through a plethora of entities with dirty hands.

Sources contend those entities were either culpable in assisting the allegedly fraudulent lenders, or failed in performing a fiduciary duty to report suspected fraud. And as a result, many traumatized Central Coast investors might eventually recover more of their investment than originally believed.

Cal Poly Saudi deal: Dueling contracts

Posted by Karen Velie | Dec 17, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

Deal-making with the Saudis is proving plenty problematic for Cal Poly officials.

Efforts to ink what has become a contentious and controversial plan linking the CPSU Engineering College with Jubial University College (JUC) hit another snag recently when attorneys for the Saudi Arabian institution rejected Cal Poly’s latest proposal.

Santa Margarita Ranch property on auction block

Posted by Karen Velie | Dec 8, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

A thousand-acre parcel of the controversial Santa Margarita Ranch, owned by developer Ronald Hertel, is in default and will be sold at auction December 30.

Also on the block, this one slated for December 22, is a Pismo Beach Hertel development project; both will be offered at sales to be conducted near the entrance of the San Luis Obispo County Courthouse.

The properties being sold are at the center of numerous multi-million-dollar default judgments against Hertel in favor of commercial lenders. Transamerica Financial Life Insurance Co. is foreclosing on Hertel for failure to make payments on a $7.6 million loan on a parcel located on the Santa Margarita Ranch.

Bank dubbed co-conspirator

Posted by Karen Velie | Dec 5, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

Estate Financial Inc. (EFI) creditor Ron Cooper said he plans to identify Heritage Oaks Bank as a co-conspirator with EFI principals Karen Guth and Joshua Yaguda in a lawsuit to be filed later this month.

Heritage Oaks Bank allegedly lent Guth approximately $20 million in unsecured loans. Following reports by this Web site that EFI was in serious financial distress, HOB placed liens on Guth and Yaguda’s Pasolivio ranch, their service stations, and a commercial property on Ninth Street in Paso Robles that once housed the failed lender.

Atascadero manager admits falsehoods

Posted by Karen Velie | Dec 2, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Atascadero city officials lied in public statements regarding an eminent domain controversy and made a scapegoat of a city employee.

City Manager Wade McKinney, one of those officials, confessed the deception only when testifying under oath in depositions earlier this year.

Housemate cops cruising to cash in

Posted by Karen Velie | Nov 29, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Atascadero City Manager Wade McKinney probably isn’t feeling very gay this holiday season after getting some straight talk about a looming and large payout of taxpayer money to settle a police department dispute.

McKinney, who heads SLO county’s most litigious city, learned recently that a mediator’s decision that favors Police. Lt. Carole Robinson will cost the city heftily, according to well-placed city sources.

Estate Financial attorneys blame market downturn

Posted by Karen Velie | Nov 24, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Following a fourth bail hearing and arraignment continuation, Joshua Yaguda’s attorney pointed at the downturn in the market as the catalyst for the financial ruin of Estate Financial inc. (EFI), on Monday morning.

“The market shifted and changed,” Yaguda’s attorney Dyke Huish said. “That’s what happened here. They made people lots of money on the upside.”

Hospitals battle over market share

Posted by Karen Velie | Nov 23, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Care of San Luis Obispo County trauma patients takes a back seat while local physicians and hospital officials battle over lucrative patient dollars.

French Hospital Medical Center and Sierra Vista Regional Medical Center continue to scuffle over whether either hospital will receive a specialty care system designation of trauma and/or ST-Segment Elevation Myocardial Infarction (STEMI).

While French Hospital CEO Alan Iftiniuk and Arroyo Grande Hospital CEO Rick Castro asked SLO County Emergency Medical Services Agency (SLOEMSA) and county Health Agency Director Jeff Hamm to proceed cautiously in designating a trauma system, officials from both hospitals have asked SLOEMSA to fast track a French Hospital STEMI designation.

Former EFI employee: ’We all knew it was fraud’

Posted by Karen Velie | Nov 7, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

Three former employees of defunct Estate Financial Inc. (EFI) claim they witnessed fraudulent behavior while employed at the Paso Robles hard money lending firm.

Speaking to CalCoastNews on condition of anonymity, the individuals provided new details of working conditions and financial practices of their ex-employers, Karen Guth and her son, Joshua Yaguda. Each of the former office workers expressed concern about becoming involved in the continuing investigation into EFI’s collapse.

Bank board links Santa Margarita Ranch developer, supervisor

Posted by Karen Velie | Nov 2, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

San Luis Obispo County Supervisor Katcho Achadjian occupies a salaried seat on a local bank’s board of directors along with a key developer in the proposed Santa Margarita Ranch project.

Achadjian’s vote on plans for the Santa Margarita Ranch could be the determining factor in the project’s future. The supervisor and Douglas Filipponi both sit on the board of Santa Lucia National Bank (SLNB). Filipponi and partners Rob Rossi and Karl Wittstrom are presenting the controversial housing development project to a divided Board of Supervisors for approval, perhaps on Tuesday.

Estate Financial chiefs’ arraignments postponed

Posted by Karen Velie | Oct 27, 2008 | Uncovered SLO | 0 |

By THE EDITORS

San Luis Obispo Superior Court Judge Jac Crawford Monday agreed to continue the arraignment of Estate Financial Inc. principles Karen Guth and her son Joshua Yaguda on 26 felony charges to Nov. 21.

Irvine-based attorney Dyke Huish requested the delay to allow time to retain and brief a second defense attorney. Crawford also granted Guth and Yaguda access to discovery.

Estate Financial investors have chance to claim assets

Posted by Karen Velie | Oct 26, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Estate Financial Inc. investors have just 30 days to file any claim to assets belonging to EFI principals Karen Guth and her son Joshua Yaguda, according to a financial notice posted by the San Luis Obispo District Attorney’s Office Oct. 24. ”

“The property and assets subject to the above described proceedings includes all property and assets in the control of Guth and/or Yaguda, or which has been transferred by Guth and/or Yaguda to any third party subsequent to the commission of any criminal act alleged pursuant to Penal Codes section 186.11(a),” the notice reads.