Ex-RVCA co-owner denies cheating bank on short sale of Costa Mesa home

A former co-owner of surf- and skate-wear brand RVCA pleaded not guilty Monday to charges that he bilked his mortgage lender out of more than a half-million dollars when he lied about not being able to repay the loan.

In 2010, Conan Hayes persuaded Bank of America to let him sell his Costa Mesa home at a loss, in what’s known as a short sale, even though he had recently sold his stake in RVCA for millions of dollars, according to the Orange County district attorney’s office.

Hayes, 40, could face up to five years in jail if convicted of one felony count of grand theft with a sentencing enhancement for a loss of more than $200,000.

Katherine Corrigan, a lawyer for Hayes, disputed prosecutors’ allegations but declined to go into specifics, explaining that she is still reviewing evidence in the case.

“There’s always two sides to every story,” she said. “And the story will come out.”

According to the district attorney’s office, the short sale of Hayes’ home cost Bank of America $586,245. That was the amount remaining on Hayes’ loan after the sale, but the debt was settled based on the belief that Hayes could not pay, according to prosecutors.

Prosecutors say Hayes applied to short-sell the house in 2010 and later told his lender that he was unemployed. He neglected to disclose that he had sold his share of RVCA three months earlier for more than $7.5 million, prosecutors allege.

Hayes, who now lives in Topanga, is free on $586,245 bail, authorities said.

He is due back in court June 19.