The Santa Barbara County District Attorney’s Office filed dozens of criminal charges Monday against couple Byron Richard “Rick” Tarnutzer and Vonna Tarnutzer accusing them of fraud, money laundering, forgery, grand theft and conspiracy in taking more than $2 million from a local woman. 

The Tarnutzers have homes in Santa Barbara and Newport Beach, which is where they were arrested last Thursday. They were booked into the County Jail on $2 million bail each and remained in custody as of Monday afternoon.  

The complaint accuses the Tarnutzers of soliciting a $1.75 million promissory note from local resident Mystica Fleury for a “fraudulent investment pitch.” 

The arraignment hearing is scheduled for Tuesday afternoon in Santa Barbara County Superior Court. 

The hearing was initially scheduled for Monday, but Judge Thomas Adams recused himself from the case, saying defense attorney Robert Sanger had represented him previously in a separate issue. 

In the courtroom on Monday were roughly a dozen members of the public interested in the case, including Fleury. 

Rick Tarnutzer knew Fleury had millions of dollars from a recent divorce settlement, the case alleges. Tarnutzer had made himself Fleury’s “primary advisor” during her divorce proceedings by drafting a proposed settlement email and reviewing legal documents for her, according to court documents.

The Tarnutzers allegedly convinced Fleury to purchase the house adjacent to theirs on Owen Road in Santa Barbara and pay them money for remodeling the property.  

Fleury sued them in 2022, citing the lack of payments on the $1.75 million loan and failing to pay subcontractors, despite her paying the couple for the work at the property. 

The civil case is still pending, and recent court documents mention the growing criminal investigation. 

In the lawsuit, Fleury said she agreed to purchase the property and have the Tarnutzers perform design and construction work to remodel the home. At no point did they say that neither of them had a general contractor license, Fleury alleged. The case accuses them of charging a fee for acting as general contractor for the project, which she did not agree to, and failing to pay workers despite Fleury paying the Tarnutzers for the work at the property. The Tarnutzers denied all allegations of the third amended complaint. 

The criminal complaint filed this week accuses the Tarnutzers of 68 counts of financial crimes, mostly related to the Fleury promissory note and the arrangement to remodel the Santa Barbara home. 

The District Attorney’s Office alleges that the promissory note was “intentionally designed with specific legal defects to frustrate future collection efforts” and that Tarnutzer knew he would default on the note. 

At the time that Tarnutzer was soliciting the $1.75 million from Fleury, he had outstanding unpaid debts and pending litigation in Orange County Superior Court, according to the Santa Barbara County District Attorney’s Office. 

That included an unpaid promissory note to a woman for a vintage vehicle (a vehicle he allegedly asked Fleury to help store at some point); defaulted loans of more than $1 million; and unpaid debts to several individuals. 

“At the time Tarnutzer solicited Fleury’s investment in October 2020 through May 2021, he had an unpaid $175,000 promissory note from 2001 (over 19 years in default), had been sued in 2008 for fraud, and had a judgment or settlement obligation from that prior fraud case,” according to court documents. 

The Tarnutzers are also accused of money laundering related to the wire transfers from Fleury; filing false tax returns; forgery; diversion of construction funds; and mortgage fraud. 

The Tarnutzers transferred Fleury’s money into Vonna Tarnutzer’s business account for American Interiors to make it appear that the business was profitable during a mortgage application process, the complaint alleges. 

The company generated no income, the criminal complaint alleges, and most of the money in the deposits for that account was from Fleury’s “investment” funds or money Fleury wired “in response to fraudulent remodeling invoices.” 

Last month in the civil case, the parties stipulated to stay the case given the ongoing criminal investigation. 

A Superior Court judge also recently awarded monetary sanctions to Fleury since the Tarnutzers have failed to attend and testify at their depositions in this case. 

South County Editor Evelyn Spence contributed reporting to this story.