The California Department of Real Estate has pulled Cedar Funding’s real estate license, barring owner David Nilsen and all agents from servicing loans and conducting real estate transactions. The Department of Real Estate took action Friday, May 16, immediately suspending Cedar Funding’s license for 100 days. “For all intents and purposes any agent that was affiliated with David Nilsen…is out of work,” says Tom Pool, department spokesman. Pool adds that Nilsen and salespersons caught doing real estate business could face criminal charges for unlicensed activity. But according to Nilsen’s spokesman, David Armanasco, Nilsen is unaware of the suspension. Cedar Funding’s offices are open and staff are meeting with investors, Armanasco says. The license suspension follows a thorough state audit of Cedar Funding’s investment dealings. Among the allegations, the Department of Real Estate says Nilsen did not put nearly $14 million of investor funds in a trust account. “The money should have been held in the trust and it wasn’t,” Pool says. “It begs the question of course, where is the money?” The state’s enforcement action is another blow for Cedar Funding, which is the subject of an investigation by the Monterey County District Attorney’s office, a license suspension by the state Department of Corporations and at least four civil lawsuits. The Department of Real Estate accuses Cedar Funding Inc., the investment firm’s corporate entity, of servicing loans without a real estate license. The department orders Cedar Funding, Inc. to stop these acts until obtaining a real estate license. Roy Gunter, attorney for Nilsen and Cedar Funding Inc., says he hasn’t seen the Department of Real Estate’s accusation. Gunter says he is not representing Nilsen in regard to the trust fund accounting and couldn’t comment on that accusation. He says, however, that he doesn’t believe Cedar Funding Inc. was servicing loans. Like earlier civil lawsuits filed against the company, the state’s complaint also accuses Nilsen and Cedar Funding of failing to record deeds of trusts in the names of investors and instead putting them in the name of Cedar Funding Inc. Gunter says this practice was done for business reasons, such as making it easier to transfer titles back to borrowers. He won’t comment, however, on whether it’s legal. Cedar Funding Inc., Gunter says, has been busy for the past couple weeks retroactively transferring deeds of trust into the names of investors. The state complaint mirrors allegations in a civil lawsuit filed May 5 on behalf of Cedar Funding investor Stanley Post. Nilsen allegedly put a Pasadera home in his and his wife Angela’s names—all without informing Post—and then borrowed $2.4 million from the property, giving Metrocities a deed of trust on the Belavida Court home. Gunter says Nilsen did this to protect investors because the borrower Kavanaugh Development Co. defaulted on the first loan. “It was to keep the investors from getting a second deed of trust and getting wiped out,” he says. Pool says Nilsen will have the option of contesting the Department Real Estate’s accusations. The audit that led to the state’s action is a follow up to a 2006 complaint that accused Cedar Funding of similar illegal activities. The department then stayed Nilsen’s license suspension after he paid $10,000 in fines.