Green but Guilty?

Penny Estes is a hugger. She hugs out of professed encouragement and compassion — sometimes with tears, too — and was recently described by one of her victims as “overblown, bigger than life about everything. … She always told you everything was going to be okay.”

For more than three years, between April 2009 and May 2012, Estes allegedly used this inflated empathy to scam 10 Santa Barbara homeowners who lost their houses in the Tea and Jesusita fires out of millions of dollars, promising to rebuild their homes with eco-groovy construction materials but then spending much of their money on hotels, restaurants, shopping, and travel. She and her company, Green Building America, reportedly received $4.87 million from the contracts — which either went over budget, were never completed, or both — and funneled $1.37 million of that sum into her personal bank account.

Estes, 63, was arrested in San Bernardino on June 4, transported to Santa Barbara County Jail two days later, and will be arraigned September 11 on 25 felony counts of grand theft, obtaining services by false pretenses, diversion of construction funds, and a slew of tax violations. Many of those charges carry special allegations that she preyed on senior citizens and victims of natural disasters. If convicted, she faces a maximum of 27 years in prison, said Deputy District Attorney Gary Gemberling. Her bail is set at $4.5 million, and last month she was named a suspect in a Riverside County case where an older couple was swindled out of $500,000 in construction money. Estes — whose attorney, public defender Brian Mathis, declined to comment for this story — has also been sued by American Express in civil court for $200,000 in fraudulent charges.

According to court filings, Estes met most of her Santa Barbara victims at informational and benefit meetings in the wake of the two fires, introducing herself as the “builder with a heart” and marketing Green Building America’s environmentally friendly “hybrid block.” Also called insulating concrete form (ICF), the material, she said, was not only fire and mold resistant, it was made of 85 percent recycled polystyrene (Styrofoam) and 15 percent recycled cement.

Estes got into the hybrid block business, she would tell people, from a desire to help people and the Earth after she herself nearly died from exposure to black mold. She also claimed at times to have invented the ATM machine, wining and dining clients at her Montecito Inn suite or in her motor home parked at a nearby beach. Originally from Florida, Estes has bounced around California — including Newport Beach, Palm Desert, and Orange County — and has family in Mesa, Arizona.

Those taken in by her stories — including a few big South Coast names like prominent physician Dr. William Koonce and Santa Barbara News-Press copublisher Arthur von Wiesenberger — would sign contracts with her, only to have their agreements broken at some point in the building process, said DA investigator Norma Hansen. Most of the victims handed over all the insurance money they received, and many dipped into their savings. When things started to go sideways — eventually Estes would refuse to disclose expense records, file dubious invoices, and/or give her clients the general runaround — some of homeowners tried to enforce the contracts by hiring lawyers but found little to no success. One victim, Nancy Keltner, paid Green Building America more than $500,000 and received zero work in exchange. As of March, Keltner was still living in a trailer on her Tunnel Road property.

While it remains to be seen how the hybrid block performs in the long run — Green Building America did finish construction on two homes — the structures were vetted and approved by city and county inspectors, said Hansen, and the blocks passed the necessary seismic tests. What’s less clear is who actually made them and where. Though Estes told her victims the material was crafted by Green Building Block in Mesa, Arizona, Hansen discovered through her investigation that no such company exists.

None of Estes’s employees have been charged with any crimes. They were interviewed as part of the Santa Barbara DA’s inquiry, but had no knowledge of any wrongdoing and didn’t benefit financially or otherwise, Hansen said. However, one of Estes’s main contractors when she ran Green Building America — which had an office on Hitchcock Way that’s now closed — has been implicated in the Riverside County case, and his license was recently suspended. A number of Estes’s workers and subcontractors have also complained she owes them significant sums of money.