A Paso Robles woman accused of bilking $1.3 million from investors pleaded not guilty to fraud charges Thursday.
Linda Kennedy, 49, was arrested in July in connection with crimes allegedly committed while she was president of 21st Century Financial Resources Inc. She had previously been in Costa Rica for three years.
Currently in custody at County Jail, she appeared for her Superior Court arraignment in handcuffs. She faces four felony charges in a case that involved hard money loans and real estate deals.
“Hard money” lenders provide money to borrowers more quickly than banks but at higher interest rates, typically around 12 percent to 14 percent. The lenders pool investor money into securities backed by real estate deeds and are considered a high risk/high return investment.
When called by The Tribune, Kennedy’s attorney, Jay Peterson, hung up without comment.
Kennedy shut down her firm in August 2007, saying then that it was the result of a “significant reduction in revenue for the company” due to the real estate market downturn. But a representative for the Department of Real Estate told The Tribune in 2008 that Kennedy lied to investors, who lost money after defaults and foreclosures on properties once held in trust by 21st Century.
Kennedy’s firm had been under investigation by state regulators since at least 2005, when the Department of Real Estate found discrepancies in its accounting.
Her trial, set to begin Nov. 26, is expected to last three weeks.