CapTech investors speak out
Investors in Camarillo-based CapTech Advisors say they suffered losses that have strained their families and left them upside down on their home mortgages.
Lawsuits filed in Ventura County Superior Court claim that investors lost more than $1 million total in a number of projects including a workforce housing development in the Central Valley. Ken Powell, listed in court documents as head of CapTech, blamed the credit market freeze for unexpected setbacks and said he’s going to respond to the complaints.
Robert A. Magaña and his father, Robert B. Magaña, allege in a lawsuit that they lost $491,000 with CapTech. The younger Magaña said he cashed out the equity in his home to make the investments.
“[My wife and I have] had to go to marriage counseling to help sort things out,” the younger Magaña said. “It’s been stressful: How are we going to do it this month? We’re upside down on our house now, and before this we were well ahead. We were going to have our house paid off this year.”
Magaña’s father dipped into retirement money he built up working in the petroleum industry, but now that retirement will have to wait, his son said.
“It was hard to see my dad break down because he took money out of his retirement savings and lost that,” the younger Magaña said. “It upsets me to see my dad so tired when he was so full of life. Now he just looks so drained. It angers me.”
Powell said he’s retained an attorney and plans to answer the six civil complaints against him soon. Another defendant, Paul Lascola, has not replied to multiple phone messages from the Business Times.
“Every contract that we have is supposed to be in arbitration or a mediation before it goes to this level,” Powell told the Business Times. “It’s going to cost probably close to $100,000 to defend myself, which I could have paid the plaintiffs. They’re making this out like I don’t want to pay these people, which is not the case, never has been the case, never will be the case.”
Powell said his firm was a victim of the collapse in the housing market – it simply became impossible to get financing to build homes, and prices dropped too far to make a profit. Powell said he intends to pay back his investors “if it takes me 10 years.”
“I have every intention of paying these people back every dollar of their investment, with some return,” Powell said. “I don’t know if I can honor what we started with because the real estate market has changed so much.”
The idea of building worker housing near the oil fields in Taft seemed a good one. Gil Negrette, whose lawsuit against CapTech alleges he lost $90,000, drove out to the development to take a look. He talked to the contractors working on the project and even to another contractor who was familiar with the area and with Kern County housing assistance programs that could help out buyers.
Everyone told Negrette the plan was solid.
“It was good concept, a good idea, if it had been managed correctly and followed through correctly,” Negrette said. “The problem was that you had two sly people holding the money and looking out for themselves.”
Negrette said Powell was persuasive in person.
“I failed to do my homework. I should have gone to a lawyer first,” Negrette said. “The problem is I’m in the Navy, I come and go a lot, and I have a family to attend to.”
Though Negrette declined to go into details, he said his ordeal with CapTech has hit his home life hard.
“I’m not OK to talk about it,” Negrette said. “I’m burning the candle at both ends, not getting sleep, losing weight. And I’ve still got a job in the military – I’ve got to serve.”
Like others who say they lost money with CapTech, the younger Magaña said he had little experience investing.
“They told us that if we invested $30,000 with them for each Taft property, it would pretty much double our investment to $64,000,” Magaña said. “I had dabbled with online trading, but it was a losing thing. I’d always heard, ‘Real estate is a safe investment.’ Investing at that level, this was the first time ever.”
But Magaña soon found himself hearing one excuse after another – a deed wasn’t recorded properly, a contractor showed up late. “[Powell] could sell ice to an Eskimo. That’s how convincing he was,” Magaña said.
Powell said he still wants to build and sell homes when the markets rebound.
“If the financial markets didn’t freeze up, it would have been very successful,” he said of CapTech’s plans for Taft. “I don’t begrudge [investors] for being mad. It’s just something that happened. It’s a once-in-100-years situation.”