Penny Estes Sentenced to 11 Years, 8 Months in Prison

Victims Say Her Construction Scam Ruined Lives and Broke Families

Penny Estes at her sentencing hearing
Paul Wellman

Penny Estes, who recently pleaded guilty to scamming several Santa Barbara homeowners out of millions of dollars under the guise of eco-friendly and fire-resistant construction following the Tea and Jesusita fires, was sentenced Wednesday to 11 years and 8 months in state prison. A hearing on restitution to the victims will be held at a later date.

After her arrest in June, Estes pleaded guilty to 28 felony counts of diverting construction funds, grand theft, theft by false pretenses, theft from an elder or dependent adult, and failure to file several years’ worth of income tax returns. She also admitted to defrauding victims of a natural disaster and theft exceeding $500,000.

Her crimes were committed in the wake of the Jesusita and Tea fires, between April 2009 and May 2012, when she promised homeowners whose houses burned down that her company, Green Building America (GBA), would rebuild their homes using fire- and mold-resistant materials. Although GBA received close to $5 million from those contracts — $1.37 million of which Estes deposited in her personal bank account — all but two of her clients’ homes went unbuilt. Estes’s modus operandi was to meet with fire victims at informational and benefit sessions.

With the fires, said Deputy District Attorney Gary Gemberling, the victims saw “that danger approaching and instinctively knew to flee. What they didn’t see coming was Penny Estes.”

Crying and looking downward, Estes, 64, addressed her remarks to the judge Wednesday afternoon, admitting that it was “hard to know what to say.” She continued, though, deflecting some of the blame to her former business partner, saying that she “took a great amount of trust” in him and that she was “not suited” for the business. To her victims — she never looked directly at them — Estes said, “I am deeply sorry that they’ve been hurt by my actions or lack of knowledge.”

Judge John Dobroth speaks during Penny Estes's sentencing
Paul Wellman

Before handing down his sentence, Judge John Dobroth — who commended Estes for quickly pleading guilty to the charges as opposed to dragging the case through the justice system — told Estes’s attorney, Brian Mathis, “I’m not buying anything your client’s saying. She’s just a crook.”

“She did this totally consciously, totally intentionally. She is a bad person,” Dobroth continued, speculating that something must have happened to Estes earlier in her life to make her “lose the empathy gene.”

The maximum sentence Estes could have faced was nearly 37 years in prison. The Probation Department recommended 17 years, and the defense asked for eight years. Estes’s 11-year, 8-month sentence will be slightly lighter after her credits for time served are applied.

Several of Estes’s victims spoke at her sentencing. Dr. William Koonce went first, sharing what happened after he lost his Mission Canyon home in the Jesusita Fire. After he collected his insurance, Koonce said he started considering contractors, and that GBA was recommended. Estes was “very charismatic,” Koonce said, “almost too charismatic.” After a while, he began to suspect something was amiss, Koonce said, explaining how he asked for receipts and spoke with vendors before realizing the extent of the scam.

“It was such an awful experience. I’m not here for closure. I’m not here for vindication,” he said. Koonce — who said he treated Estes to free medical care before he realized what she was doing — added that Estes’s actions destroyed his personal life and forced him to make house calls on Christmas Eve to pay his family’s rent.

“She took our peace, our trust,” said Nancy Keltner, who told the judge how Estes took more than $500,000 from her and her family but left them with a vacant lot. Keltner said she lived with her daughter in a “leaky old motor home” — using an outdoor shower and toilet — for three years after the fire destroyed her home and that her “whole family has been split up” because of Estes’s actions.

Riverside County residents Kay and Robert Hillery, victims of Penny Estes
Paul Wellman

Riverside County residents Kay Hillery, 77, and Robert Hillery, 85, also stood before the judge, with Kay speaking about how Estes swindled them out of $536,000 from their family trust in 2008, money that records would go on to show Estes used to set up her Santa Barbara operation. Kay said that Estes preyed on her and her husband, describing how Estes brought flowers to Robert in the hospital following his back surgery. (In October, Estes also pleaded guilty to three felony counts for defrauding the Hillerys.)

Estes’s attorney, public defender Brian Mathis, painted a different picture of Estes. “When Ms. Estes came to Santa Barbara, she did that with the hope that she could help people,” he said. “She didn’t come to hurt people.” Mathis told the judge Estes became ill in the 1990s after being exposed to black mold and that that experience inspired her to promote environmentally friendly materials. But Estes didn’t have a building background, Mathis said — her background was in marketing and sales — and her lack of experience “turned into a situation where [she was] robbing Peter to pay Paul.”

“But the life that preceded this has to count for something, too,” Mathis continued, citing Estes’s swimming accomplishments in high school and college and her lack of a criminal record as reasons for a lighter sentence. The repercussions of her actions made Estes clinically depressed and led her to attempt suicide, Mathis said.

Norma Hansen, an investigator for the District Attorney’s Office who worked on the case, said that no GBA employees have been charged with any crimes, as they didn’t know of any wrongdoing and didn’t benefit from any of the money, which Hansen said Estes transferred between several accounts. There isn’t any evidence to indicate that Estes hid any of the remaining $5 million, Hansen said.

Gemberling took issue with Estes’s apology. “She’s still not accepting responsibility for what happened,” he said, noting the $200,000 in American Express charges — including her stay at the Montecito Inn — “thousand-dollar dinners” at Lucky’s, and shopping sprees that Estes treated herself to with her clients’ money. At her “one chance” to address her victims, Gemberling said, Estes only seemed to regret that she had been caught. “If she hadn’t been, she wouldn’t be sorry,” he said.


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