From prison to Paradise: Builder brought criminal past to California town ruined by wildfire
Jay Soderling and his brother were breaking California’s banking rules just three weeks after they got started.
State regulators slapped Golden Pacific Savings and Loan with a cease-and-desist order in April 1984 over the sin of “self dealing.” Golden Pacific, headquartered in Sonoma County, was lending money to family members, according to stories in the Santa Rosa Press Democrat at the time.
The state’s intervention apparently made little difference. Authorities later concluded that the Soderlings ran Golden Pacific like it was their personal piggy bank, extracting millions to finance their real estate deals and personal expenditures.
“It was a classic real estate scam using straw buyers, inflating the value of the property,” Steven Adler, who ran the major fraud unit at the California Attorney General’s Office, told a congressional subcommittee years later. “And since you own your own bank, you can loan yourself money, based on the inflated appraisals.”
Within 18 months of its founding, the savings & loan was declared insolvent and seized by regulators. The brothers pleaded guilty to misapplication of funds and purposefully overvaluing property, both felonies, and received one-year prison sentences.
For Jay Soderling, it was the start of a lengthy journey through the criminal justice system that landed him in prison time and again — and eventually brought him to Paradise.
Soderling and his wife Jessica arrived in Paradise in 2019, shortly after the Camp Fire, the most destructive wildfire in California history, wiped out more than 12,000 homes.
Paradise needed homes rebuilt. The Soderlings needed money.
Jay had just spent two years in prison on tax charges. Jessica was on probation for the same case. They owed the IRS almost $499,000. The desperate need for homebuilders, after the most destructive wildfire in California history, was an opportunity.
Instead, their work in Paradise caused a fresh wave of legal trouble.
The construction company they started, Aurora Ridge Homes Inc., is under investigation by the Butte County district attorney and the California Attorney General’s Office. Customers have told The Sacramento Bee they paid Aurora Ridge hundreds of thousands of dollars for homes that have not been finished.
The Soderlings and their son, Colton, were named in a 20-page administrative complaint filed in March by the Contractors State License Board accusing Aurora Ridge of failing to complete work and operating without a valid license. Two other men — licensed contractors who temporarily worked with Aurora Ridge — were also accused. All five people named in the complaint could be permanently barred from ever working as building contractors in California.
Among the allegations in the complaint: Jay Soderling, because of his previous legal problems, was a “prohibited person” who wasn’t allowed to work for a construction company in any supervisory role.
When asked to comment for this story, Jessica Soderling hung up on a Sacramento Bee reporter. No one responded to a message left on the company’s phone line, or responded to an email address Jay Soderling listed on a court document filed in connection with a lawsuit filed against Aurora Ridge by one of its suppliers.
Paradise builder lost licenses in 1980s
Savings & loans used to play a major if unexciting role in American finance. They were predictable institutions that relied on home-mortgage loans to generate steady revenue. But in the 1980s, government deregulation and interest rate fluctuations prompted many S&L’s to engage in riskier lending practices. Hundreds of them collapsed under the weight of bad loans, generating billions of dollars in losses that had to be absorbed by taxpayers.
More than a few failed because of fraud, including the Soderling brothers’ Golden Pacific.
In a report filed years later, federal prosecutors said the Soderling brothers siphoned $16.5 million from Golden Pacific, using customers’ deposits “to finance their own real estate ventures and pay personal expenses, including the acquisition of fine homes and thoroughbred horses.”
California officials were stunned when the Soderlings got just one year in prison for destroying Golden Pacific.
“The sentence was ridiculous,” Adler, of the Attorney General’s Office, told Congress.
Jay Soderling got out of prison in 1988, but his freedom didn’t last long.
As part of his sentence for defrauding Golden Pacific, Soderling was ordered to pay the federal government millions in restitution. Instead, he went on “a $500,000 spending spree in violation of a court order,” federal prosecutors wrote.
Soderling told the Santa Rosa Press Democrat that the money was spent on legitimate business expenses, and accused government officials of pursuing a vendetta. “Every time we … try to get something going, they knock the wheels off our cart,” he said.
He was sent back to prison in 1990, this time for three years, according to court records.
Dogged by drugs, bankruptcy, tax problems
Soderling appears to have spent most of his career as a builder and developer in the North Bay. One of his defense lawyers, in a 2016 court filing, said Soderling’s “hard work and expertise in the housing industry helped him build a successful small business. He helped create many local jobs and made hundreds of new homes available to local families.”
But trouble seemed to follow him. In 1989, the Contractors State License Board, citing the collapse of Golden Pacific, revoked three different contractors licenses he held for companies headquartered in Healdsburg. He filed for bankruptcy — once in 1989 and again in 1999. He was sent to prison for six months in 1998 for passing bad checks while on a construction project in Marin County, according to a report by federal prosecutors.
In 2006, according to the Santa Rosa Press Democrat, Soderling parked a new motorhome in front of the Sonoma County Sheriff’s Department, walked inside and reported that the Mexican Mafia was trying to kill him. Deputies found nine grams of meth inside the vehicle, and he was charged with a misdemeanor charge of possession of a controlled substance. He entered a diversion program and the case was eventually dismissed.
The same year he was arrested for drugs, Jay Soderling applied for a new contractor’s license. He was turned down — a legacy of his failure to pay back the millions he owed the government for the savings & loan failure.
Soderling “did not meet the criteria for rehabilitation,” the agency said in the complaint it filed in March against Aurora Ridge.
Then, in 2011, husband and wife were indicted on federal income tax evasion charges.
Prosecutors said the couple engaged in a scheme, dating back to 2004, to hide personal funds in a family-run development company, Ripp It Earth Movers Inc., which was doing land deals in Lake County.
A federal jury convicted both Soderlings of conspiracy to defraud the government in December 2015. Jay Soderling was convicted of tax evasion as well.
Jessica Soderling was placed on probation. Jay’s lawyer made a plea for a light sentence, based on Soderling’s skills as a developer.
“Mr. Soderling regrets having let down his family and friends, and is determined to right the wrong by using his real estate expertise to make the IRS whole,” his lawyer wrote in a court filing.
Federal prosecutors, in response, were less flattering, and asked that Soderling get a prison term of nearly three and a half years. “Defendant is a long-time white-collar criminal who has habitually conducted business outside the bounds of the law, taken advantage of others, and encouraged others to participate in his illegal conduct,” they wrote.
Soderling got a three-year sentence.
Couple brought huge debts to Paradise
Jay Soderling was released after two years, in December 2018, a month after the Camp Fire. He and Jessica owed the IRS restitution totaling $499,000.
Months later, the Soderlings were doing business in Paradise. The newly-incorporated Aurora Ridge set up shop in one of the few office buildings still standing in town. It printed up stationery with the slogan, “Building Community in Paradise!” It wasted little time finding customers.
“They seemed like really nice people,” said Linnie Wallin, who wound up paying Aurora Ridge more than $220,000 to rebuild his home. “They were really, really friendly.”
In time, Wallin said, he came to realize that Aurora Ridge wasn’t going to complete his home and stopped making payments. Last fall the company left Paradise and moved its offices to Hamilton City, in Glenn County.
Wallin has been finishing the job himself.
“It’s been kind of a living nightmare, to be honest with you,” he said.
The Soderlings’ work in Paradise has triggered multiple investigations. Notably, the state license board referred the matter to the Butte County district attorney and the California Attorney General’s Office for possible criminal prosecution.
BEHIND THE STORY
MOREWhy did we report this story?
Practically every year, a massive wildfire destroys one of California’s forested communities, leaving hundreds if not thousands of people homeless. When the smoke clears, the rebuilding phase can be a time of financial vulnerability for desperate wildfire victims, many of whom are holding insurance payouts larger than their life savings. The stories Camp Fire victims tell of handing over hundreds of thousands of dollars to problematic builders who failed to complete their homes serve as cautionary tales.
Where did the idea come from?
In November, Sacramento Bee reporter Ryan Sabalow got an email with an alarming subject line: “Camp Fire Survivors — Victims Again.”
It came from Chico lawyer Jennifer Ellingson, who had been working with Camp Fire survivors in Paradise. The survivors claimed builders had taken huge sums of money from them but had failed to rebuild their homes. Some of them had already begun telling Redding-based TV station KRCR about their frustrations.
Ellingson’s email triggered a five-month Bee investigation into the people behind two of those companies, Aurora Ridge Homes and Cubic Quarters. The investigation revealed that the people behind these companies had a history of business dealings where money went missing or wasn’t repaid and the courts got involved.
How did we report it?
Sabalow and reporter Dale Kasler conducted dozens of interviews, reviewed hundreds of pages of court documents and other public records, did some social media sleuthing and enlisted the help of a retired FBI agent.
Uncovering the lengthy criminal history of Jay Soderling, the founder of Aurora Ridge Homes, was a relatively simple matter. Kasler read decades-old news accounts from his trials and reviewed hundreds of pages of criminal court records and transcripts of congressional hearings about his role in the 1980s savings and loan crisis. Documents also showed that Soderling and his wife Jessica, who worked with her husband at Aurora Ridge, had been convicted on tax charges in 2015.
It was trickier to learn more about Tricia Cohen, the owner of Cubic Quarters. As far as The Bee could learn, Cohen has never been charged with a crime. “Patricia Cohen” also is a common name that made using background check search programs or searching social media a challenge. Most of her customers in Paradise never actually met her in person, and it’s unclear where she actually lives.
But her customers in Paradise shared with The Bee emails and phone numbers that she’d been using to contact them. Using that information, Jim Ellis, a retired FBI agent and certified fraud examiner from Texas whom Sabalow interviewed, was able to run a background check that provided a comprehensive list of her and her ex-husband’s history of court judgments. They totaled at least $736,111 in judgments issued between 2006 and 2008. The records also revealed that in 2007, the IRS put a $190,905 tax lien on the Cohens’ homes in Florida and Nevada.
Sabalow began pulling court records from the judgments awarded against Cohen in Washington state, Nevada and Florida.
Who did we speak to?
The Bee used court documents to track down three of Cohen’s former investors.
In interviews, they told The Bee that a woman they knew as Patty Cohen and her former husband, Michael, took their investments in deals involving shipments of Chinese products and never returned their money.
The failed business deals were remarkably similar to the pitch the woman calling herself Tricia Cohen was making to fire survivors years later in Paradise. She claimed to have a line of prefabricated homes made in China that would arrive in shipping containers.
Finally, to confirm it was the same Patricia Cohen behind the various failed business deals, The Bee received photos pulled from Cohen’s social media accounts before they were set to private or deleted. A Camp Fire survivor who met her in Paradise confirmed to The Bee the woman in the picture was indeed Cohen. So did two of her former business partners from years earlier — the ones who obtained court judgments.
The Cohens and Jay Solderling didn’t return messages from The Bee. Jessica Soderling hung up the phone when contacted for this story.
This story was originally published April 28, 2022 at 5:00 AM with the headline "From prison to Paradise: Builder brought criminal past to California town ruined by wildfire."