George Eshoo, Faithful Garlock Accomplice
We’ve said before that Bill Garlock could conduct none of his crooked business without a lot of help from accomplices, especially attorneys. They help with contracts and defend him in court against investors and creditors, among other things. His longest-standing and closest association with an attorney is with George Eshoo of Redwood City, ex-husband of Anna Eshoo, the United States Representative from the 18th District of California.
Attorney Eshoo was defending Garlock at least as early as 1999, in the Lydia Mondala case in San Mateo County Superior Court, where the judgment went against Garlock, as usual. He seems to have become Garlock’s primary defender from about 2004 until 2009, when Garlock hired young attorney Jonathan Cummings as his in-house counsel and subsequently Andrew Cross. Eshoo continued to represent Garlock in some cases as late as 2011.
But Eshoo’s involvement with Garlock goes far beyond civil defense. He is on record as “Manager” or “Agent” of at least a dozen corporate entities that Garlock opened, and probably many more. This is very important, because having others act as manager and/or officer and agent of the corporation or LLC is critical for Garlock to be able to hide evidence of his ownership from creditors, including the United States Bankruptcy Court.
For instance, on April 10, 2008, Eshoo signed as “Manager” of 839 Mitten, LLC, on an Investment Agreement with Richard Harrington of Milwaukee, who lost his entire $1 million investment in the deal. Harrington sued in San Mateo County Superior Court and won a judgment. Unusually, Garlock represented himself in that suit, but Eshoo defended him and Rosie and their LLCs against other plaintiff-victims in the same Mitten Road (Burlingame) property fiasco.
Garlock’s blatant breaches of contract against both lenders and investors, which of course Eshoo knew about from many victim lawsuits at the very latest, did not seem to bother him, since he defended his client-partner vigorously. Eshoo called it “bad faith” on the bank’s part in his 9/17/09 answer to Bridge Bank’s lawsuit for judicial foreclosure of the Mitten property, in which the bank cited Garlock’s transfers of the property in violation of the deed of trust as one reason for foreclosure. Eshoo offered the excuse that the bank knew about them because they were public record (that is, filed at the county Recorder’s Office), among other reasons.
These transfers are extremely important, because they are Garlock’s primary method to defraud both banks and investors. He resells a property behind the bank’s back, pockets the investor money and then neglects management, in the Mitten case and many, many others. Banks forbid such transfers since they diminish the lender’s security, and the transfers defraud investors because the bank has the right to foreclose and wipe out the investors, which happened in many Garlock cases. But Mr. Eshoo looks the other way at this conduct.
On Aug. 27, 2008, Eshoo signed as “Manager” the Investment Agreement between Garlock’s 180 Wolfe Road, LLC, and investor Leonard Sklar. Sklar lost all of his $150,000 investment in the deal, suing after Garlock made only three of the promised monthly payments. Garlock had already stopped paying most of his investors in other properties about May of 2008. Thus it seems certain that Garlock’s attorney would have known that his client was in deep financial trouble and any new investment with Garlock was doomed. Eshoo defended Garlock in Sklar’s lawsuit, which ended in a judgment in favor of Mr. Sklar. In his answer to Sklar’s complaint, which bears Eshoo’s masthead but is signed by Cummings, Eshoo/Cummings categorically deny every allegation of the plaintiff and claim Garlock owes nothing. But after being sanctioned by the court for failure to appear at a mandatory case management conference, Eshoo and Garlock caved in and settled for nearly $200,000. The unfortunate Mr. Sklar, like almost all other Garlock victims who won a judgment, has yet to collect and of course incurred substantial attorney fees in addition to his loss because of Garlock’s and Eshoo’s resistance. (San Mateo County Superior Court case CIV481966, Leonard Sklar vs William Garlock.)
Some corporate entities of Garlock’s in which Eshoo served as Officer or Manager between 2005 and today are: Jackson Courtyard Joint Homeowners Assoc. Inc; 7910 Walerga Road, LLC ; San Gregorio Sod Farm LLC; Pulgas Dois LLC; Pulgas Tres LLC; Pulgas Quatro LLC; Pulgas Um LLC; 175 Stone Pine LLC; New 642 Harrison LLC; Gilroy Partners – Kern LLC; and Fillmore Grill LLC.
Probably the most sensational Eshoo-Garlock project began in February, 2009 when Garlock himself signed the Articles of Organization as agent and organizer of 255 12th Street & Kissling, LLC, the entity that soon bought a big commercial parking garage in San Francisco. Eshoo subsequently signed all the purchase (and later sale) documents as Manager of that LLC. The corporate address indicated on the Articles was Garlock’s Menlo Park office address. In April of 2009, Garlock boasted to the San Francisco Business Times that his company had bought the big garage, so all appearances indicate that Garlock was at least part owner.
But in August of the same year, Eshoo filed a Statement of Information with the Secretary of State indicating that he, Eshoo, was then official manager and agent, and his office address in Redwood City was the corporation’s address. It seems Bill had thought better of having his own name on it. There is no documentary evidence of transfer of ownership of the property until late 2011, only the personnel who are required to be identified. We might therefore presume that the owner(s) remained the same as when Garlock purchased in early 2009.
In ownership documents obtained in early 2014 by the Trustee’s attorneys after a court order, Eshoo claims to be owner of two corporations that officially manage 255 12th Street & Kissling, LLC: Gemia Investments, LLC and 12th Street Garage, LLC. They also allege that the owner of 255 12th Street & Kissling, LLC is a certain Gemagold, S.A., a corporate entity registered in a foreign country but not in California as required by state law. Its corporate office is Eshoo’s address in Redwood City. We leave it to the reader to intuit or deduce the owner(s) of Gemagold. (Hint: Recall from prior posts that Royal Parking Corporation, which managed the garage after its sale in 2011, received $2.5 million from the garage sale via 255 12th Street & Kissling, LLC, paid cash for Garlock’s Woodside house for him, took out a $1M mortgage for it, made the $11,250 monthly mortgage payments, and also paid Bill’s and Rosie’s equestrian expenses.)
In early 2009, Garlock had paid $14 million of borrowed money to purchase the garage. In December, 2011 the garage sold for $23 million. Garlock stayed on as manager, leasing the facility back from the new owner via Royal Parking Corporation as the entity that served as the official face of management. Royal was newly formed by Garlock’s since-disbarred bankruptcy attorney Jonathan Fried in November, 2011. There is no evidence of prior association of Fried with the garage, though Garlock claimed in the Creditors Meeting of April, 2013 that Fried and Curtis Gaspard, a longtime Garlock employee or associate, were owners of Royal and that he was not. This defies credibility.
The garage sale’s final escrow statement turned over to the Trustee last year shows disbursements of $1 million before the close of escrow, and another $6,642,605 on December 8. $250,000 of the first million seems to have gone into the new bank account of Royal Parking Corporation two days after the disbursement on November 22. On Dec. 9, 255 12th Street & Kissling LLC wired Royal Parking Corp. $2,250,000, obviously just received from the title company out of escrow. So Garlock’s entities appear to have netted at least $2.5 million from the sale. Of course we wonder where the other $5 million went. Garlock did not turn over the financial records of 255 12th Street & Kissling LLC, nor of the two other entities that managed the entity that owned the garage, so we do not yet know who got this money. As titular owner of the other two entities and also manager of the main one, Mr. Eshoo very likely received handsome compensation for his involvement with that garage and his longtime client-partner.
To verify the references to court-ordered documents above, the reader can see all the turnover documents because they are public record, posted on the website of the US Bankruptcy Court in San Francisco for the case of William F. Garlock, number 12-30802.
March 20 Hearing at Bankruptcy Court
Bill Garlock has still not turned over a number of documents that he was ordered by the court to produce early last September. He produced some of them within the 15-day deadline, then under pressure from the Trustee’s attorney Jennifer Hayes he produced some more in January. But his tactic of stalling has worked for him in many courts over the years so here we go again. Naturally the missing ones are among the most sensitive, or likely to include incriminating information about his activities.
He did not show up at the hearing on Jan. 31 when he was ordered to appear and discuss this issue with Judge Montali. So there was a second hearing on March 20. This time Garlock finally appeared to face the judge. Jennifer Hayes appeared by telephone to represent the US Trustee.
Unfortunately the court’s recording does not capture the first part of the conversation, where presumably Garlock would have explained why his obvious contempt for the court by not showing up in January was not actually contempt. His IQ sounds about 20 to 40 points lower than it really is, as though he has trouble understanding what’s required of him, and he acts apologetic, but of course this is only his act.
The Judge and Ms. Hayes lectured Garlock on how to fulfill the court’s requirements: if you don’t have something, you must make a formal declaration, furnishing adequate proof why you don’t have it. Astonishingly, both Hayes and the judge offered theoretical explanations for non-availability of documents, such as a fire in the storage room, or shredding, though Garlock would have to offer strong proof of such a claim. As though he might have a legitimate reason for non-production. Of course no petitioner will believe that the dog ate the documents and will pursue them in other ways if that’s the claim.
What it all comes down to is who actually owns Royal Parking Corporation and related corporate entities including 255 12th Street & Kissling LLC, as explained in a prior post. That address was the location of a commercial parking garage in San Francisco that the LLC sold in December of 2011 for a profit of several million dollars. Royal Parking Corporation continued to (mis)manage the garage for the new owner, a typical Garlock strategy, until the dissatisfied buyer kicked him out.
Recall that in the Creditors’ Meeting chaired by the Trustee a year ago, Garlock told petitioners’ attorney Peter Bonis that he had an agreement with Royal Parking Corp. to pay for his horses and house. See recording and transcript below. That agreement is one of the still-missing documents. Of course Garlock would have a copy, and Fried and Gaspard would also have copies of an agreement whereby Royal agreed to buy the Garlocks a Woodside house for $1,545,000 and pay its $11,000 mortgage plus a similar monthly amount or more for his and Rosie’s equestrian activities. But why is a commercial parking garage management company paying such sums to non-owners in the first place? We believe that in fact Garlock doesn’t need an agreement because he owns Royal Parking and calls all the shots, so now he has to invent or forge some excuse to satisfy the court. The outcome of this particular cat and mouse game will be intriguing.
Garlock has until April 21 to produce the remaining documents. Among those that he admits he has are the reverse sides of checks written on Royal’s bank account, or one of them (he often had multiple accounts for his corporate entities). Given insufficient production, Mr. Garlock will face a less patient Judge Montali in a future contempt hearing.
March 20, 2014 Audio Download Audio File
Contempt hearing Friday, Jan. 31
Last September, attorneys for the US Trustee got a court order ordering Garlock to turn over a slew of documents pertaining to the ownership and operations of Royal Parking Corporation, an entity that managed a large commercial parking garage at 12th & Kissling, San Francisco after Garlock sold it in December of 2011. Royal also owned the Garlocks’ personal residence at 635 Patrol Road, Woodside until Garlock sold it last October — right out from under the Trustee’s nose.
In the Bankruptcy Creditors’ Meeting last April (see below), Garlock told questioners that he didn’t own that corporation, but rather his associates Curtis Gaspard and Jonathan Fried did. Yet Garlock admitted under questioning that Royal was paying for the house, and for his polo expenses as well as wife Rosie’s participation in the annual HITS equestrian show in Thermal, California. You can hear this testimony in the attached links below.
Maintaining a stable of polo ponies and participating in polo matches can easily cost $10,000 per month or more. It’s not just about hay. The team leader has to hire grooms to take care of his own animals and may have to furnish mounts for other players. He usually hires a polo professional to ride with his team. Polo is a very expensive habit. The HITS show in which Rosie’s horse Gentry competed is reputed to cost a participant tens of thousands as well. Yet Garlock asserted that these expenses were donated, or in return for his “services” to the corporation that he alleges he does not own.
This looks suspiciously like significant illicit income to us. We believe that Garlock or his wife Rosie owns the majority share of Royal Parking Corporation, or all of it. We think Fried and Gaspard are conspiring to conceal debtor assets, as is their boss. That’s a federal crime.
On about September 20, Garlock turned over some of the documents ordered by the court on Sept. 5, but by no means all of them. Then Garlock and his lawyer Fried did not respond to requests for the missing information. So now he must appear before Judge Montali to explain why the judge should not hold him in contempt of court.
Garlock can continue to withhold the missing documents, but if he persists, he will soon be thinking about his decision in jail, according to the filing papers.
The hearing is open to the public.
Hearing on Trustee’s Motion for Coercive Contempt Sanctions
10:00 a.m. Friday, January 31
US Bankruptcy Court
235 Pine Street, 22nd floor
San Francisco
Recording of the Creditors’ Meeting
Recording of the Creditors’ Meeting
Last April, Bill Garlock appeared in front of the U.S. Trustee Barry Milgrom, who is in charge of his bankruptcy case. A dozen or so creditors of Garlock’s were in the room to watch the proceedings and quiz him. We got cut short, regrettably, but the recording and transcription reveal how Garlock reacts under pressure from questioners who know the answers to the questions they are asking. He “forgets” and he lies.
The meeting is also called a “341 Examination” after the federal statute number, since the Trustee and creditors examine the debtor with their queries.
Unfortunately the Trustee did not follow up on incriminating aspects of the examination such as why Royal Parking Corp. gives him so much money despite allegedly having no formal agreement with him, and exactly what his association is with NorCal Care, the marijuana dispensary in San Jose. (Probable true answer: Garlock owns both entities.)
Things are hopping lately, so check back soon at garlockfraud for new posts.
Attachments
341 Creditors’ Meeting for William F Garlock, April 17, 2013Transcription of the recordingDownload Audio File
Creditors Meeting on April 17
Bill Garlock condescended to put in a personal appearance as honored guest at the Creditors Meeting on Wednesday, as ordered by the Bankruptcy Court. Unfortunately the U.S. Trustee, who conducted the meeting, had booked several other such meetings in the same half-hour time slot, so he had to cut us short after not many minutes of questioning. We were hoping we could take up the whole hour and reconvene after lunch, but no such luck.
Seeing that we were just getting started, the Trustee continued the meeting until May 15, when the Trustee and the petitioners’ attorney Peter Bonis will continue their questioning of the debtor at the Trustee’s conference room in San Francisco at 235 Pine Street. [This venue is a correction of an earlier post.]
We think the questioning was productive as far as we got, so the day was not a waste of time as most court hearings tend to be. The Trustee makes an audio recording of such meetings, which we will post here after we get a copy, together with our preliminary analysis. Watch this space.
Garlock complies with the court order, sort of
Garlock’s attorney Jonathan Fried finally turned in the papers that Judge Montali had ordered. Late. Around 8:30 on the morning of March 12, Fried uploaded them to the bankruptcy court website as required.
As we predicted, Garlock still in essence declares no income. But there’s a new twist.
As usual, the Hearing on March 8 didn’t end in a completely predictable manner
Attorney Jonathan Fried showed up. Garlock didn’t, despite the fact that Fried has still not filed the papers required by the judge’s order of last week. Everything hinged upon how strictly Judge Montali was going to enforce his order.
Hearing at U.S. Bankruptcy Court, March 8
The temperature seems to be rising perceptibly in the Garlock case lately.
Bill Garlock and his lawyer henchman Jonathan Fried are probably going to have a hot and sweaty day on Friday the 8th. In February, their nemesis Peter Bonis filed a turnover motion asking the court to order Garlock to turn over to the Trustee his polo ponies and wife Rosie’s hunter-jumper horses, the rents from a trailer park on Woodland in East Palo Alto (about $9,000/month) that he and Fried have been collecting, and Garlock’s proceeds from the sale of a property in Palo Alto last July.
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