Back in the day when the only test for getting a mortgage was the ability to “fog a mirror,” Sharon Palmer and James Cecil Stewart might have gotten away with it.
All they did was to cook up some creative financing so they could exercise an option to purchase the leased Ventura County, CA, farm that was helping supply Stewart’s private store with unpasteurized, raw milk.
Their plan was to obtain the down payment funds from Larry Ottings’s line-of-credit, giving him use of 10 acres of the 51-acre farm. Palmer and Stewart figured they could then attract other investors to help them make the tax and mortgage payments.
All three pleaded guilty over the deal more than two years ago, and Stewart, 69, was sentenced in March 2015 to 217 days in jail and 36 months of formal probation. He had credit coming for time served and it is now out on probation.
Palmer, 56, and Otting, 71, are still awaiting sentencing, which is now scheduled for Dec. 19 in Ventura County Superior Court in California.
Stewart founded Rawesome Foods in Los Angeles as a members-only co-op. Palmer’s Healthy Family Farms helped supply raw milk products to the private market before it was closed.
Otting pleaded guilty to one count of felony grant theft with a special enhancement of aggravated white collar crime. Palmer also pleaded guilty to a felony charge.
Catherine Mano, investigator for the Ventura County District Attorney’s office, said the source of the downpayment was being withheld from investors, which is what made it illegal.
The Healthy Family Farm was sold earlier this year for more than $1 million, and “injured parties” have first crack at the funds.
Palmer pleaded guilty to 14 counts including theft, money laundering, securities fraud, conspiracy and special allegations. She first acquired the farm at 6789 Wheeler Canyon Road in San Paula though a lease with options to buy.
Stewart was free on bond four years ago when bail bondsmen returned him by force to the Ventura County jail. They feared he might flee the jurisdiction ahead of his court dates
As it turned out, the owner of Organic Pastures Dairy Co. — Mark McAfee — put up the bond money and was the one who told bondsmen Stewart might flee. Organic Pastures is California’s largest raw milk producer. McAfee did not want to risk losing his home over the Healthy Family Farm scheme.