Author: Karen Velie

State agency lifts Hurst Financial’s permit

Posted by Karen Velie | Jul 21, 2008 | Uncovered SLO | 0 |

By THE EDITORS

A variety of accusations were filed today by the state Department of Corporations against Atascadero lender Hurst Financial and its owner, James Miller, and the agency has revoked Hurst’s permit to sell securities.

Miller is one of several San Luis Obispo County hard money lenders on shaky ground because of questionable business practices.

Mary Ann Smith, the department’s senior corporations counsel, charged in the complaint that Miller violated at least five of the permit’s terms.

Law reported closing in on EFI principals

Posted by Karen Velie | Jul 20, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

Local and federal law enforcement agencies are investigating Estate Financial Inc. (EFI) and a criminal case is said to be “moving forward” even as a battalion of interested parties scrap over control of the failing hard money lender in federal bankruptcy court.

Federal Secret Service agents, who had commenced a parallel probe into the Paso Robles’ company’s practices, apparently have decided to halt their examination of alleged fraudulent management of EFI. The Secret Services’ interest in the case stemmed from the agency’s charge to protect U.S. financial institutions.

Covert attack mounted on trauma center plan

Posted by Karen Velie | Jul 12, 2008 | Uncovered SLO | 0 |

Physicians and officials at French and Arroyo Grande hospitals have mounted a concerted but furtive effort to halt plans for a trauma center.

Crowded women’s jail is big lawsuit threat

Posted by Karen Velie | Jul 6, 2008 | Uncovered SLO | 0 |

By RON CRAWFORD

A badly overcrowded women’s jail is the result of Sheriff’s Department officials’ penchant for punishment, a policy that poses for county taxpayers a distinct threat of costly litigation.

Repeated warnings from successive San Luis Obispo County grand juries and a variety of state regulators regarding severely deficient conditions and worsening overcrowding in the women’s facility have been routinely ignored.

Cuesta College accreditation reaffirmed

Posted by Karen Velie | Jul 4, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Cuesta College officials learned Wednesday the institution has been removed from warning status and that its accreditation has been fully reaffirmed by the Accrediting Commission for Community and Junior Colleges (ACCJC).

“With all the changes we have made, we are definitely headed in a positive direction,” said Cuesta College media relations coordinator Jill Ivie. “We are looking forward to the future.”

Night Moves: EFI files fund Chapter 11

Posted by Karen Velie | Jul 4, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

Estate Financial Inc. (EFI) principals Karen Guth and Joshua Yaguda placed EFI’s Mortgage Fund LLC into voluntary Chapter 11 bankruptcy with a July 1 appearance in Santa Barbara’s Central District of California United States Bankruptcy Court. Their action puts the brakes on a state court-ordered evaluation.

During the past month, EFI officials have reportedly been spotted packing and moving boxes from their Paso Robles office at 806 9th Street, across from the city public safety building. Last Saturday, three days before Guth’s and Yaguda’s trip to the Santa Barbara courthouse and during dawn’s early hours, a black Mercedes and a dark Cadillac Escalade were parked on the street outside EFI’s private entrance while EFI personnel worked behind closed doors, an eyewitness said.

Bank’s own appraisal questions Gearhart loan

Posted by Karen Velie | Jul 1, 2008 | Uncovered SLO | 0 |

By KAREN VELIE and DANIEL BLACKBURN

A million-dollar loan from Heritage Oaks Bank to North County developer Kelly Gearhart earlier this year was based on “erroneous” and questionable claims, according to the bank’s own appraisal.

That appraisal was not received by bank officials until nearly two months after the loan proceeds had been paid to Gearhart.

More state allegations heaped on EFI

Posted by Karen Velie | Jul 1, 2008 | Uncovered SLO | 0 |

The State Department of Real Estate (DRE) has filed accusations against hard money lender Estate Financial (EFI) of Paso Robles for eight causes of action that include “misrepresentations and false promises made to investors and acting fraudulently and dishonestly in making under-secured loans.”

The accusations were detailed Friday on the state agency’s Web site.

Update: EFI’s bankruptcy expectations

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

By KAREN VELIE

Estate Financial Inc. (EFI) will remain in bankruptcy for at least the next few months and at the same time independent evaluator Hanno Powell will continue his audit, the Fresno attorney said earlier this week.

A “complete evaluation” of EFI’s books was ordered during a June 16 San Luis Obispo Superior Court hearing. During that hearing, a group of investors requested the court appoint a receiver to oversee the company’s $170 million mortgage fund. A week later, the Department of Corporations, on behalf of the people of California, joined the plaintiffs in their request.

EFI forced into Chapter 11

Posted by Karen Velie | Jun 25, 2008 | Uncovered SLO | 0 |

Creditors forced hard money lender Estate Financial Inc. (EFI) into Chapter 11 bankruptcy proceedings Wednesday in Santa Barbara’s Central District of California United States Bankruptcy Court.

Federal attention aims at lending fraud

Posted by Karen Velie | Jun 20, 2008 | Uncovered SLO | 0 |

A federal investigative task force looking into mortgage fraud and related offenses in a seven-county region including San Luis Obispo County will utilize at least 40 FBI agents and investigators from nine other U.S. agencies.

Dubbed SCAM (for Southern California Mortgage), the program was recently initiated, though the probe has been underway for months. San Luis Obispo is one of the seven Southern California counties included in the task force’s range. More than 100 separate investigations are currently being conducted in the region, according to FBI officials.

Ill man tossed under wheels of county justice

Posted by Karen Velie | Jun 19, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Les Harvey’s nightmare encounter with “the system” started with a hamburger.

Outside a McDonald’s in Arroyo Grande, Harvey, 64 and terminally ill, sat in his parked van and started to eat his dinner, the burger he had just purchased from the fast-food eatery. For that, he was about to be forcefully arrested, stripped of his earthly belongings, and sentenced to a year in Atascadero State Hospital, an institution for the criminally insane.

Estate Financial evaluator appointed

Posted by Karen Velie | Jun 16, 2008 | Uncovered SLO | 0 |

San Luis Obispo Superior Court Judge Barry T. LaBarbera Monday initiated a complete evaluation of the books of Estate Financial Inc. (EFI) mortgage fund.

LaBarbera appointed Hanno Powell — an attorney from Fresno experienced in receiverships — to look into EFI’s records unencumbered for 30 days.

Just the facts, ma’am

Posted by Karen Velie | Jun 10, 2008 | Uncovered SLO | 0 |

By THE EDITORS

A Cal Poly official took to the airways Monday to dispute portions of an UncoveredSLO.com article posted last week.

Amy Hewes, director of publications and communications for the College of Engineering, argued on Dave Congalton’s 920KVEC Hometown Radio show that she disagreed with parts of the article, “Cal Poly’s College of Engineering budget bleeds.”

State regulators cancel EFI sales permits

Posted by Karen Velie | Jun 9, 2008 | Uncovered SLO | 0 |

By KAREN VELIE

Estate Financial Corp. (EFI) of Paso Robles can no longer solicit nor accept investor money because the troubled lender’s state permit to do so has been revoked.

Specifically, regulators from the California Department of Corporations (DOC) have stopped the firm from selling mortgage fund securities and part interest in real estate investments. The revocation follows on the heels of an earlier suspension.