Estate Financial president Karen Guth has been sent to prison for defrauding investors, but the county District Attorney’s Office continues to make allegations against her of further criminal behavior — including money laundering.
Guth and her son Joshua Yaguda put their money lending company, Estate Financial, into bankruptcy in July 2008, about four months before they were arrested and jailed on 26 counts of felony violations. In December they were sentenced to 12 and eight years in prison, respectively.
In the meantime, the bankruptcy trustee on the Estate Financial case has been trying to sort out $350 million worth of real estate, property deeds and investors, so convoluted and confusing that one trustee likened it to “a mess of scrambled eggs.”
The Superior Court has maintained control over the mother’s and son’s personal assets to help give restitution to victims. Estate Financial trustee attorneys are claiming part of Guth’s personal assets, including two gas stations in Templeton and Morro Bay, because she transferred money from the company into her personal business coffers, according to a filing made by Deputy District Attorney Steve von Dohlen.
Estate Financial trustee attorneys and von Dohlen say she took as much as $684,000 out of her company coffers in as many as 13 advances to the gas stations, collectively called Templeton Products Inc.
Guth admitted in one of her declarations during her criminal proceedings that she transferred several thousand dollars to the stations from 2004 to 2007, von Dohlen said.
“There was no new construction or any other explanation to justify the movement of money between EFI (Estate Financial) and TPI (Templeton Products Inc),” he said.
In 2008, district attorney’s investigator John Tooley found that Guth asked her gas station managers to withhold cash from their daily receipts for her — promising that she would later replace the money with a personal check. Von Dohlen told The Tribune he believes the $50,000 in cash Guth had at her home the day she was arrested more than likely came from her “looting the assets of TPI.”
“That is the most plausible explanation,” he said.
The Estate Financial trustees are asking Judge Jac Crawford to allow them on behalf of Estate Financial investors to an equity stake in the gas stations because of Guth’s transfer of money between Estate Financial and the gas stations.
Von Dohlen opposes that. If Guth illegally put Estate Financial money into the gas stations, the trustees’ claim on the gas stations should be denied, he argued.
“This indebtedness appears to be a product of the defendants’ criminal activity of looting the assets of TPI and laundering money between the defendants’ two businesses, to facilitate the fraudulent activity at EFI and maximize the defendants’ interest in the asset,” von Dohlen said in a filing.
Von Dohlen is also asking the judge to determine whether Heritage Oaks Bank has a right to claim a position over Estate Financial’s other creditors in its attempt to retrieve $4.7 million that she borrowed from the bank in a revolving line of credit.
When Estate Financial was in trouble in 2007 — Guth had written to her investors that they would not be receiving their interest payments because many loans were going into default — the bank had attempted to cover its loans to her by putting a blanket lien on several of her personal assets.
Von Dohlen believes the bank has the right to secure restitution from Guth but that it should not be allowed “to jump ahead of other unsecured victims based on actions it took after the defendants’ commission of the crimes.”
Crawford is scheduled to review these issues at a 1:30 p.m. hearing today in Superior Court in Grover Beach.