Two North County hard-money lenders, Hurst Financial and Real Property Lenders, and real estate developer Kelly Gearhart are the subject of a criminal investigation, Deputy District Attorney Steve von Dohlen confirmed Thursday. The state departments of Real Estate and Corporations, the District Attorney’s Office and the FBI are cooperating in the high-profile investigation.
A criminal investigation into a third lending company, Estate Financial Inc. of Paso Robles, led to arrests in October of the principals of that firm — Karen Guth and Joshua Yaguda. They face more than 20 felony allegations for crimes such as fraud. They remain in County Jail, with bail for each suspect set at $5 million. The arraignment for the pair has been continued to Dec. 12.
All three companies — Hurst, Real Property and Estate Financial — pooled investors’ money to fund high-interest loans to real estate developers. Lending was based on the value of real estate used as collateral. The companies charged higher interest rates than banks because the deals were considered riskier, and typically did not conform to bank standards. read more
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