County files fraud lawsuit against owner of Bodega Bay vacation rental firm

Sonoma County is suing the owner of a defunct vacation rental company in Bodega Bay alleging she embezzled money and owes the county $2.2 million in overdue taxes, fees and penalties.

Joann Beckman, a Guerneville resident, closed Vacation Rentals USA in late January, leaving a wake of unpaid debts, unreturned rental deposits and irate homeowners and renters. The Sonoma County Sheriff's Office has opened a fraud and embezzlement investigation.

Beckman and her attorney, David Chandler Jr., did not return calls seeking comment Monday.

The county accused Beckman of fraud, embezzlement and tax evasion in a lawsuit filed Friday in U.S. Bankruptcy Court in Santa Rosa.

Beckman sought Chapter 7 bankruptcy protection in November. But now the county is asking the court to throw out her case, which would prevent her from discharging any of her debts. Beckman owes more than $1.4 million to more than 100 creditors.

“This is very unusual,” said attorney Michael Fallon, who teaches bankruptcy law at Empire College in Santa Rosa. “They (the county) are basically doing this for the benefit of all the creditors.”

Some county officials were caught unaware of the lawsuit Monday.

“It's news to me,” said Rod Dole, who is the elected auditor and tax collector for Sonoma County.

The lawsuit was filed on Dole's behalf by a Los Angeles-based firm that provides outside counsel for the county. The attorney who filed the lawsuit did not return calls seeking comment.

“You can't file a complaint like this and not follow through with it,” Fallon said. “They have taken on fiduciary responsibility for all the creditors.”

In the lawsuit, the county levels a wide range of allegations against Beckman, including embezzling money to benefit either herself or the vacation rental business in Bodega Bay recently started by her son.

Beckman's son, Michael Huffstutter, started a new vacation rental service in partnership with another former Vacation Rentals USA employee. Their business, Sonoma Coastal Vacation Rentals, shares office space with Beckman's house-cleaning business, Dustbusters, on Highway 1.

The county's lawsuit also alleges that Beckman did not fully report all of the taxes that she collected from renters.

Further, it alleges Beckman has failed to explain what happened to more than $3 million she received for taxes, rents, loans and other debts she accrued.

Beckman owes the county about $1.6 million in occupancy taxes paid by renters for vacation homes, plus about $550,000 in interest and penalties related to those unpaid taxes, according to the lawsuit. The county's lawsuit asked the judge to not discharge those taxes, meaning Beckman would still owe the money after her bankruptcy case is closed.

But taxes are not dischargeable in bankruptcy, Fallon said. So it was strange the county asked the judge to rule on it, he said.

The county is also seeking punitive damages “in an amount to be proven at trial,” according to the lawsuit.