Solvang Councilman Agrees to Pay Back Loan Allegedly Borrowed for Campaign Debt

McCarthy claimed Djernaes still owed her at least $10,000. Although he borrowed more than that amount, $10,000 is the cap for for small-claims court cases.

“The defendant borrowed money to pay back his debt from his city council campaign,” states the legal paperwork discovered by Noozhawk in Superior Court files. “He was put on a payment plan and the defendant stopped making payments.”

The claim lists the time period as Sept. 15, 2018, through Dec. 31, 2018.

“The amount was determined by the amount I gave the defendant in cash and verified in writing,” McCarthy’s claim says. “He agreed to the amount and started making payments, then just stopped.”

McCarthy said in the legal filing that she had asked Djernaes to pay her back the money.

“The lawsuit is simply just to get my money back,” she told Noozhawk in November.

On Friday, the pair met in private with a mediator before reaching an agreement that included Djernaes consenting to making payments of $250 starting this month with a balloon payment at the end of the year to repay the debt.

Djernaes lashed out against Noozhawk’s coverage of the court case and the public records associated with it.

“This is a personal matter,” he said in an email to Noozhawk. “I’m more curious as to how and why you are so excited about my personal business. Perhaps you should ask your source — the ‘leaker’ at City Hall.”

His financial difficulties may not be over.

In paperwork filed with the Fair Political Practices Commission, Djernaes did not list any outstanding or received personal loans for the 2018 reporting year.

He answered “NA” for not applicable under the category requiring him to disclose any “personal loans or loans received not in a lender’s regular course of business.”

In his biography on the City of Solvang website, Djernaes claims to work with international investors, corporations and government agencies, contending he “brings decades of experience as CEO/CFO and advisor to businesses of all sizes.”

Forms filed for 2019 with the FPPC list Praesidia Consulting, which Djernaes said provided services to foreign businesses and generated gross income between $1,000 and $10,000.

On campaign finance forms, Djernaes said he was self-employed and identified his business multiple times as “Praesidia Advisors.” He reported personal contributions to his campaign of $2,100 from Oct. 2, 2018, through Oct. 15, 2018.

On the next form, covering the period from Oct. 23, 2018, through Jan. 31, 2019, Djernaes refers to the business as “Praesidia Consulting” and disclosed personal contributions of $9,540 between Oct. 24, 2018, and Dec. 6, 2018.

An FPPC spokesman said Friday that the agency had no investigation of Djernaes.

This isn’t Djernaes’ first financial snag.

In 2005, he filed for Chapter 7 bankruptcy, claiming $1.1 million in liabilities and $2,478 in assets, according to federal court records.

Creditors included his parents, Beatriz and Niels Djernaes, for $345,776 for debt of Mira Media and a 1993 Eagle car Djernaes was buying from them.

Many of those owed money were individuals and businesses from Santa Barbara and Ventura counties along with students loans and credit cards for Sears, Nordstrom, Chevron and Union 76 for consumer purchases and gasoline.

Djernaes listed himself and Mira Media as a creditor with an amount unknown for “unliquidated and contingent claims regarding Broadbank Telecom, a Nevada corporation.”

The actual name may be Broadband Telecom with various spelling versions appearing in the legal filing.

He claimed shareholder interest in Mira Media, apparently a defunct California corporation formed to settle disputes with Broadband Telecom and its attorneys.

Djernaes also has been the focus of a 2001 legal dispute, apparently from a role with Hampton-Porter Investment Bankers, according to the Financial Industry Regulatory Authority, or FINRA.

“Claimants alleged breach of fiduciary duty, unauthorized trading, unsuitability, fraud, negligence breach of third-party beneficiary contract and failure to supervise,” the dispute resolution said. “Claimants’ allegations concerned transactions in the common stock of En Pointe Technologies Inc.”

Djernaes denied the allegations as the claimants requested unspecific compensatory damages, unspecified punitive damages and costs.

The dispute resolution ended in 2003 with Djernaes deemed “liable to and shall pay claimants the sum of $32,000 in compensatory damages” along with costs associated with the case.

Others involved were ordered to pay $80,000 in compensatory damages, and $270,000 in punitive damages.

After working in the finance industry from November 1993 through September 1999, Djernaes no longer holds a license to act as a securities broker or investment adviser providing information about securities, according to FINRA.

Djernaes has been outspoken about alleged improprieties in Solvang, including claiming in a recent email to a constituent to have “zero tolerance for malfeasance and corruption.”

In his Friday response to Noozhawk about the lawsuit, Djernaes resurrected his vague allegations against Solvang’s prior elected officials, city employees and two civic organizations.

“I am humored by your continuing interest in trying to smear me,” he said. “It won’t work.

“Perhaps you should investigate the massive fraud and criminal negligence at the SCVB (Solvang Conference & Visitors Bureau) and Solvang Chamber of Commerce. Or the weaponization of the Planning Dept (Planning & Community Development Department) and the appalling favoritism given to members of what many call the Danish Mafia.

“Don’t worry … I’ll be writing that story for you,” he added. “I will not rest until the City has extirpated decades of Corruption perpetrated by past City Managers and Council members.”

— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com.