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Full repayment seems unlikely in the Estate Financial bankruptcy case

After a court hearing in Grover Beach on Thursday, investors defrauded by failed Paso Robles lender Estate Financial remain waiting on how much of their lost money they might be paid back.

Superior Court Judge Jac Crawford held off on appointing a receiver to take over the assets of the bankrupt lender’s top executives.

And control of $14,000 found in a Cuesta Title escrow account will eventually be transferred to the U.S. trustee in the Estate Financial bankruptcy case.

Estate Financial President Karen Guth and her son, Vice President Joshua Yaguda, are now in prison for defrauding hundreds of investors in a Ponzi scheme that collected as much as $340 million. The firm would pool investors’ money to fund high-interest, high-risk loans that financed real estate development.

The county Probation Department is conducting a detailed accounting of restitution owed by Guth and Yaguda based on losses declared by their victims.

At a hearing set for Sept. 24, the department is expected to report on its accounting, and the court will hear further arguments regarding the disposition of Guth’s personal property.

Deputy District Attorney Steve von Dohlen believes Guth’s personal assets in real estate — which include her office building and olive ranch in Paso Robles — will have some value to the victims, although he would not say how much.

Some earlier estimates have been around $4 million, depending on market conditions.

Chances that victims will be able to recover 100 percent of their money seem slim to none, according to people involved in the case.

According to the San Luis Obispo District Attorney’s website on the Estate Financial case, Guth and Yaguda must continue to repay losses to victims for the rest of their lives.

The criminal restitution debt to victims is not dischargeable through personal bankruptcy and continues to accrue interest at 10 percent per year.

Some of the investors who came to the hearing say they don’t understand much of the process, except that their money is probably gone.

Marjorie Maloney, a 75- year-old seamstress from Arroyo Grande, said she was solicited by Estate Financial with a phone call in 2005 and handed over $64,000 — her life savings — to Guth for what she understood was a “savings account” that she could draw from at anytime.

But when she wanted to cash it out in 2007, she was told the money would be delayed and was coming shortly. It never came. Maloney now has nothing to live on but her social security and has no money for travel.

Aileen Machaj of Paso Robles, 83, said she gave Guth $400,000 — again, her life savings. Her husband (now deceased) gave Guth $500,000, and her grand-daughter gave Estate Financial $40,000. Machaj believes it is all gone.

She says Guth reinvested her money without her permission; she also said Guth told her that her investment would be returned when she tried to liquidate her account, but she never got the money.

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