Atascadero lender’s sentencing delayed

January 9, 2012

Kelly Gearhart and James Miller

An Atascadero man awaiting sentencing on federal fraud charges was given a few more months of freedom after a judge delayed his sentencing hearing from March 26 to June 25, according to a court order.

James Hurst Miller, the former president of Hurst Financial Inc., agreed to plead guilty to charges of swindling as many as 1,200 investors out of more than $100 million in a fraudulent investment scheme on August 19.

The court then filed the agreement under seal. However, they did not take Miller into custody.

A 2008 CalCoastNews investigation revealed James Hurst Miller and former North County developer Kelly Gearhart allegedly bilked more than 1,200 people, primarily senior investors, out of much of their life’s savings.

If the court convicted Miller on all four counts — mail fraud, wire fraud, money laundering and making a false statement to a bank — he would face a maximum sentence of 80 years in federal prison.

Under an alleged plea agreement discussion discovered by CalCoastNews in April, Miller had agreed to testify against other persons being investigated by the FBI. In return, Miller was requesting prosecutors reduce the four counts to one and allow him to serve a reduced prison sentence in the minimum-security federal correction facility located in Lompoc Calif.

During a hearing in September, Miller relinquished his passport and secured his release through a $25,000 bond.


15 Comments

  1. oto says:

    Wow! If you look at 80 years possible prison time on four counts…..divide by four….20 years per count average…..100 million stolen….divide by 80…..Crap!—Where’s the calculator…..(Should’a paid more attention during math class)….Let’s see, that’s a 1 followed by 8 zeros….100,000,000 divided by 80….That is…One million, two-hundred fifty thousand a year earned, if you look at crime like a JOB and PRISON like really, crappy, low-cost housing and a job hazard which comes with being caught.

    Ya’ know, I could envision successful (=corporate level) drug dealers and human traffickers watching the “justice system” in action in this case, and deciding to make a lateral move into real estate development!

    We’ll have to change those license plate logo’s from, “Welcome to San Luis Obispo! Come on vaction, leave on probation” to ,,,,,,hmmmmmmm$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$zzzzzzzzzzz

    Like or Dislike: Thumb up 5 Thumb down 1

  2. Nancimeek says:

    Again, I will remind all of you that attorney Robert Grigger Jones while on the stand last year in hawaii during our father’s litigation to have the 1st amendment declared invalid (supporting documents confirmed the signatures on the 1st amendment signed in California in Jones’ office and created by Jones) stated he primarily handles cases involving Real Estate clients. He stated he was involved with a Pe Ji Ho Ta casino venture which is no longer in existence. Yet the Ohio Bankruptcy court in documents filed in 2010 stated the investors will be paid back by monies garnered from the fruition of the Pe Ji Ho Ta casino. SOMEONE is lying!

    If Jones is involved with Real Estate clients who would they be?

    Like or Dislike: Thumb up 16 Thumb down 6

  3. Cindy says:

    Funny thing that I will never forget is the night Gearhart showed up at a CC meeting with his old buddy Molina. It was right before the elections when Grigger and Bob Kelly were running for CC and they had been accused of pressuring a city employee to “side step” the Plan Comm process and see things Gearhart’s way.

    At a point (public comment) during Gearhart’s rant , he said, “I don’t need anybody to do pressuring for me, I’m more than capable of doing MY OWN PRESSURING”. At that moment, Wade McKinney looked up at him and they met eye to eye. McKinney kept a stone face but the way his eyes locked into/onto Gearhart’s was so transparent. I’ve never forgot that, it felt like I saw them speaking 1000 private words in that second.

    Like or Dislike: Thumb up 26 Thumb down 1

  4. Bob says:

    I suspect his sentencing delay has a lot to do with how well he cooperates in the continuing investigation of others.

    Like or Dislike: Thumb up 24 Thumb down 0

  5. SewerHeightsRez says:

    Plead guilty to stealing $100M from widows and orphans and promptly bond out for less than a medical marijuana case.

    Well-loved. Like or Dislike: Thumb up 36 Thumb down 0

  6. SloTownMan says:

    No doubt he is making travel plans out of the Country.

    Like or Dislike: Thumb up 19 Thumb down 1

  7. Eighty years is not enough time for the loan fraud that has been done to County residents!

    Now is the time to make an example of this type of fraud!

    Santa Barbara Bank & Trust is currently trying to fraudently collect $45,171.20
    From the Oceano Nursery SBA loan against December 20, 2011 SBA FOIA documents. It is time to expose all types of banking fraud and hold those people accountable!

    Hot debate. What do you think? Thumb up 37 Thumb down 7

    • SloTownMan says:

      Why dont you admit you made a horrible decision to by the property and now you want the tax payers to bail your sorry behind out.

      Hot debate. What do you think? Thumb up 7 Thumb down 29

      • —————–SLO Town Man——–Tax payers do not have to bail me out! I made a bade decision in allowing Santa Barbara Bank & Trust to commit SBA PLP Loan Bankiing Fraud up to this point! I Now have some questions! It is time for Santa Barbara Bank & Trust to answer some questions as they required Oceno Nursery to fight the Inverese Condemnation in Oceano! Please read this email asking questions of Santa Barbara Bank & Trust!

        From: Bill Bookout [mailto:Pismobeachdiveshop@charter.net]
        Sent: Saturday, January 07, 2012 4:55 PM
        To: ‘Diana Lee’; ‘lol@rsmediate.com’
        Cc: ‘cj.ward@keyt.com’; ‘wmccaw@newspress.com’; ‘velie@calcoastnews.com’; ‘rmiller@newtimesslo.com’; ‘Kaplan, Adam D.(Off. Inspector Gen.)’; ‘kari.overson@sba.gov’; ‘Babcock, Lisa J.’; ‘ombudsman@sba.gov’; ‘tcassidy@porterscott.com’; ‘Thomas Cregger’
        Subject: RE: Bookout/PCB Mediation per thier Bank Fraud and Breach of Contract since 2007

        January 7, 2012 Office of the Comptroller of the Currency Complaint Re: Case# 01944977

        Attention Sharon Gilstrap Fax # 713 -336-4301 OCC complaint

        Diana Jessup Lee, Esq.

        Reicker, Pfau, Pyle & McRoy LLP

        1421 State Street, Suite B

        Santa Barbara, CA 93101

        Diana Jessup Lee, (California State Bar # 155191)

        When will Santa Barbara Bank & Trust be providing the January 2012 monthly payment notice? This payment notice has not been received as stated and promised by Reicker, Pfau, Pyle & McRoy LLP’s Attorney Robert B. Forouzandeh, per SBA Form 147 Note in 2012. Robert B. Forouzandeh, Stated to Richard Rossi on November 30, 2011: “Please be advised that pursuant to the terms of Mr. Bookout’s loan, the loan will be re-amortized as of January 2012. Due to Mr. Bookout’s long running default on this loan, upon re-amortization, the monthly payments will change. Once the loan is re-amortized, I will provide you with the new payment amount which will be applicable for the entire 2012 calendar year.”

        A) Can you explain as to why Santa Barbara Bank & Trust has removed the online accounting for this SBA loan per the Office of the Comptroller of the Currency’s June 30, 2011 accounting letter showing the May 19, 2011 Notice of Default to be fraudulent by Santa Barbara Bank & Trust?

        B) In the October 26, 2010 Demand Statement written by Sandra Sheffield. Why if Santa Barbara Bank & Trust believes that they are owed $45,171.20 in deferred and defaulted payments is this not requested per this Demand?

        C) In the September 13, 2010 SBA Form 1149 that you and Santa Barbara Bank & Trust, Vice President Doug Lutz, presented at the April 27, 2011 Mediation with Lol Sorensen. Why is the $45,171.20 in deferred and defaulted payments not seen in this document?

        D) In the June 3, 2008 Pacific Capital Bank Vice President Joe L. Kennedy SBA Program Manager, letter written to the Office of the Comptroller of the Currency Case No. 770567. Why would Santa Barbara Bank & Trust now claim that they are owed $45,171.20? SBBT in this letter had told the Office of the Comptroller of the Currency, that back interest was being paid!

        E) With the May 30, 2008 SBA Form 1149 provided by Pacific Capital Bank Vice President Joe L. Kennedy, SBA Program Manager. Why does Santa Barbara Bank & Trust not pay anything to principal with the now claimed $45,171.20?

        F) In the July 2, 2008 Pacific Capital Bank Vice President Pierette Marie Mageo, letter written to the Office of the Comptroller of the Currency Case No. 770567. Why would Santa Barbara Bank & Trust now claim that they are owed $45,171.20? In the attached (Default Affidavit) by Sandra Sheffield, with this Pacific Capital Bank July 2, 2008 letter. How did Santa Barbara Bank & Trust on May 19, 2011 come up with $45,171.20 that Santa Barbara Bank & Trust thought they were owed?

        G) In the September 30, 2008 letter written by Santa Barbara Bank & Trust Vice President, Sandra Sheffield to the U. S. Small Business Administration. Why would Santa Barbara Bank & Trust claim on May 19, 2011 that Santa Barbara Bank & Trust was owed $45,171.20 in deferred and defaulted payments?

        H) In the April 18, 2008 Pacific Capital Bank Vice President Pierette Marie Mageo, letter written to the Office of the Comptroller of the Currency Case No. 770567. Why would Santa Barbara Bank & Trust now claim that they are owed $45,171.20? Pacific Capital Bank Vice President Pierette Marie Mageo, stated that interest was paid current up to October 2007 from her letter to the Office of the Comptroller of the Currency!

        I) Diana Jessup Lee. Why would you in your May 19, 2011 letter, threaten a restraining order for asking Santa Barbara Bank & Trust Banking questions?

        J) Diana Jessup Lee. Why would you in your May 19, 2011 letter, change the Santa Barbara Bank & Trust accounting to the Office of the Comptroller of the Currency in 2008 per OCC Case # 770567?

        K) Diana Jessup Lee. On December 24, 2011 Robert B. Forouzandeh, California (State Bar # 247177) Stated: “You are not to contact anyone at Santa Barbara Bank and Trust. If you do so you will be in violation of the restraining order issued against you by the Santa Barbara Superior Court.” Diana Jessup Lee, Please explain as why Santa Barbara Bank & Trust would file a restraining order for asking California Banking questions of Your two May 5, 2011 amortization schedules and Your May 19, 2011 Fraudulent accounting against the Office of the Comptroller of the Currency June 30, 2011 Case No. 01394465– Santa Barbara Bank & Trusts accounting going back to 2007?

        L) Diana Jessup Lee. (California State Bar # 155191) With the Santa Barbara Bank & Trust 2003 Deed of Trust, requirement to fight inverse condemnation. Why has Santa Barbara Bank & Trust not paid the Oceano Nursery liens to the County of San Luis Obispo and Union Pacific Rail Road for this requirement as reinforced in the 2007 forbearance and workout agreement by Santa Barbara Bank & Trust?

        Diana Jessup Lee. Christine Sontag (California State Bar # 138999) of Santa Barbara Bank & Trust has put you in charge of answering, all Santa Barbara Bank & Trusts; banking questions, per the Oceano Nursery SBA Loan. The Office of the Comptroller of the Currency has acknowledged your involvement in the Office of the Comptroller of the Currency’s June 30, 2011 letter. Please explain as to why Santa Barbara Bank & Trust; in communication with the Office of the Comptroller of the Currency would apply past interest and then in your May 19, 2011 letter and SBBT Notice of Default claim that Santa Barbara Bank & Trust was owed $45,171.20 in deferred and defaulted payments, that had already been paid?

        Diana Jessup Lee. (California State Bar # 155191) With your email statement below on January 3, 2012 as you state: “Your questions have been repeatedly answered. Your accusations are inaccurate, and repeating them over and over is not productive. Please see the many factual responses we have provided you which explain exactly the amount of your default, the amount due on your loan and where all your payments have been credited.”

        All questions asked above and below are of public record and need to be answered either by (Diana Jessup Lee) or Santa Barbara Bank & Trust. Santa Barbara Bank & Trust has given you their, authority to answer their banking questions and it is now time that these California Banking questions are answered!

        Sincerely

        Bill Bookout

        CC John Walsh Fax # 713 -336-4301 OCC complaint

        CC Sharon Gilstrap Fax # 713 -336-4301 OCC complaint

        Like or Dislike: Thumb up 18 Thumb down 2

        • ———–SLO Town Man———–Reade this response from Santa Barbara Bank & Trust for asking bnaking questions about the 2003 Oceano Nursery SBA Loan.

          From: Robert Forouzandeh [mailto:rforouzandeh@rppmh.com]
          Sent: Monday, January 09, 2012 10:44 AM
          To: Bill Bookout
          Cc: Diana Lee; Mary Jo Barbeau; Richard Rossi
          Subject: RE: Bookout/PCB Mediation per thier Bank Fraud and Breach of Contract since 2007

          Mr. Bookout:

          As you are fully aware, pursuant to the Restraining Order issued by the Santa Barbara Superior Court on June 27, 2011, you are not to contact anyone at Santa Barbara Bank and Trust other than Diana Jessup Lee and myself. Failure to abide by the Restraining Order may result in the Court holding you in contempt and incarcerating you and/or imposing civil penalties and fines against you.

          I have reviewed the 10 questions you posed below. These are questions which you have previously asked on multiple occasions and which have been previously answered on multiple occasions by either Mrs. Lee or myself.

          Additionally, as you are aware, you have initiated a new bankruptcy claim in the United States Bankruptcy Court in which you are represented by counsel. The questions you have posed go directly to Santa Barbara Bank and Trust’s loan to you and its claim in your bankruptcy proceeding and thus, any and all questions pertaining to your loan with Santa Barbara Bank and Trust must be posed by your counsel.

          Robert B. Forouzandeh
          Attorney at Law
          Reicker, Pfau, Pyle & McRoy LLP
          1421 State Street, Suite B
          Santa Barbara, CA 93101

          Tel: 805-966-2440
          Fax: 805-966-3320
          E-mail: rforouzandeh@rppmh.com
          Website: http://www.reickerpfau.com
          ————————————————————————————
          This e-mail may contain confidential and privileged material for the sole use of the intended recipient. Any review or distribution by others is strictly prohibited. If you are not the intended recipient, please contact the sender and delete this e-mail.

          ________________________________________
          From: Bill Bookout [mailto:Pismobeachdiveshop@charter.net]
          Sent: Thursday, January 05, 2012 6:06 PM
          To: Robert Forouzandeh
          Cc: rmiller@newtimesslo.com; cj.ward@keyt.com; ‘Wilson, Nick – SLO’; velie@calcoastnews.com; wmccaw@newspress.com; Weber, Tad – SLO
          Subject: RE: Bookout/PCB Mediation per thier Bank Fraud and Breach of Contract since 2007
          January 5, 2012 Office of the Comptroller of the Currency Complaint Re: Case# 01944977

          Robert B. Forouzandeh, California State Bar # 247177,
          Attorney at Law
          Reicker, Pfau, Pyle & McRoy LLP
          1421 State Street, Suite B
          Santa Barbara, CA 93101
          Tel: 805-966-2440

          Robert B. Forouzandeh, California State Bar # 247177,

          Now that you have had a chance to fully read the Office of the Comptroller of the Currency’s June 30, 2011 accounting from Santa Barbara Bank & Trust records, provided to the OCC. Do you still feel that the amortization schedules that you and Diana Jessup Lee have prepared with Santa Barbara Bank & Trust are accurate?

          Do I have your permission to now contact Santa Barbara Bank & Trust and ask the 10 questions below of Diana Jessup Lee? Diana Jessup Lee has not responded.

          Notice in the Comptroller of the Currency’s June 30, 2011 accounting from Santa Barbara Bank & Trust, that in 2007 only interest of $53,358.70 was paid to Santa Barbara Bank & Trust. Per the 2007 forbearance and workout agreement, the $22,274.46 was to be applied to principal and interest. Does Santa Barbara Bank & Trust commit this type of fraud with all of their loans?

          The U.S. Small Business Administration’s December 20, 2011 documents back up the Comptroller of the Currency’s June 30, 2011 finding showing the May 19, 2011 NOD to be fraudulent!

          Robert B. Forouzandeh, Again, Do I have your permission to now contact Santa Barbara Bank & Trust and ask the 10 questions below of Diana Jessup Lee, as Diana Jessup Lee has not answered these questions asked of Santa Barbara Bank & Trust?

          Sincerely

          Bill Bookout
          ________________________________________
          From: Bill Bookout [mailto:Pismobeachdiveshop@charter.net]
          Sent: Thursday, January 05, 2012 3:59 PM
          To: ‘Diana Lee’
          Cc: ‘Kaplan, Adam D.(Off. Inspector Gen.)’; ‘kari.overson@sba.gov’; ‘Ashker, Terrill K.’; ‘cj.ward@keyt.com’; ‘rmiller@newtimesslo.com’; ‘velie@calcoastnews.com’; ‘lol@rsmediate.com’; ‘Mary Jo Barbeau’; ‘Ashker, Terrill K.’; ‘carlos.mendoza@sba.gov’; ‘Hobby, Jill C.’; ‘Karen Grant’; ‘legal@fdic.gov’; ‘sbcountyda@co.santa-barbara.ca.us’; ‘ombudsman@sba.gov’; ‘Richard Rossi’; ‘Robert Forouzandeh’
          Subject: RE: Bookout/PCB Mediation per thier Bank Fraud and Breach of Contract since 2007

          January 5, 2012 Office of the Comptroller of the Currency Complaint Re: Case# 01944977
          Attention Sharon Gilstrap Fax # 713 -336-4301 OCC complaint

          Diana Jessup Lee, Esq.
          Reicker, Pfau, Pyle & McRoy LLP
          1421 State Street, Suite B
          Santa Barbara, CA 93101

          Diana Jessup Lee,

          Per your Santa Barbara Bank & Trust statement on January 3, 2011 “Your questions have been repeatedly answered. Your accusations are inaccurate, and repeating them over and over is not productive. Please see the many factual responses we have provided you which explain exactly the amount of your default, the amount due on your loan and where all your payments have been credited.”

          Attached above is the June 30, 2011 Office of the Comptroller of the Currency Case # 01394465 letter showing that the prior principal and interest payments of $54,922.70 in 2006 and 2007 had been paid back to Santa Barbara Bank & Trust! Please explain as to why Santa Barbara Bank & Trust would file a fraudulent Notice of Default against the Office of the Comptroller of the Currency Case # 01394465 findings on June 30, 2011?

          Please answer the following questions for John Walsh of the Office of the Comptroller of the Currency Case # 01394465, myself and those the San Luis Obispo New Times and Cal Coast News attached above?

          1) How did Santa Barbara Bank & Trust come up with $67,445.46 in your May 19, 2011 letter attached?

          2) Why would Santa Barbara Bank & Trust claim in the May 19, 2011 NOD, that SBBT was still owed $45,171.20 against the June 30, 2011 Office of the Comptroller of the Currency accounting from Santa Barbara Bank & Trust? The OCC shows that the unpaid interest on July 12, 2007 was $33,062.51 instead of the May 5, 2011 amortization schedule claimed amount!

          3) The June 30, 2011 Office of the Comptroller of the Currency letter shows that all prior interest accrued and unpaid through September 29, 2008 had been paid in full! Can Santa Barbara Bank & Trust explain as to why in the October 28, 2011 (Proof of Claim) to Judge Robin L. Riblet as to why Santa Barbara Bank & Trust would claim $45,171.20 owed SBBT against the June 30, 2011 Office of the Comptroller of the Currency Case # 01394465 letter?

          4) The June 30, 2011 Office of the Comptroller of the Currency letter shows that Restraining order was filed on June 3, 2011 by Santa Barbara Bank & Trust. Why would Santa Barbara Bank & Trust file a restraining order for asking Santa Barbara Bank & Trust for an accounting of the Oceano Nursery SBA Loan?

          5) In Santa Barbara Bank & Trusts May 19, 2011 accounting letter and threats of a restraining order letter combined! Explain as to why and how the Office of the Comptroller of the Currency on June 30, 2011 comes up with different accounting, then the May 19, 2011 SBBT accounting per the two May 5, 2011 amortization schedules prepared by Santa Barbara Bank & Trust?

          6) In the email from Robert B. Forouzandeh on September 7, 2011 in regards to the Office of the Comptroller of the Currency’s June 30, 2011 letter as stated by Robert B. Forouzandeh: “Furthermore, as we have repeatedly told you, the amortization schedules that we provided to you on May 6, 2011 were prepared by Santa Barbara Bank & Trust employees, not by any of the attorneys in this office, this office simply delivered them to you. Thus, your claim that “Neither You [Robert Forouzandeh] nor Diana Jessup Lee are qualified to prepare Santa Barbara Bank & Trust amortization schedules” is simply incorrect. Also, we provided you with 2 amortization schedules simply as a courtesy to you and to extend additional benefits in Schedule #2 to you which you were not entitled to as a gesture of good faith and in an effort to settle this matter.

          Lastly, you have not provided any information or evidence which would lead Santa Barbara Bank & Trust to either rescind the most recent notice of default or to suspend the currently scheduled Trustee Sale from proceeding.” Please explain as to why Santa Barbara Bank & Trust would change their accounting as explained by the Office of the Comptroller of the Currency in the June 30, 2011 response Case # 01394465? Robert B. Forouzandeh, had reviewed the OCC June 30, 2011 letter as he shows below in his September 7, 2011 email showing that the 2006 and 2007 deferred payments had been made!

          7) Why would Santa Barbara Bank & Trust claim in the May 6, 2011 letter that 2007 deferred payments had not been paid in direct conflict with the Office of the Comptroller of the Currency’s June 30, 2011 letter and communication with Santa Barbara Bank & Trust?

          8) Why would Santa Barbara Bank & Trust in the May 6, 2011 letter claim that they were owed “in excess of $100,000).” Against the June 30, 2011 Office of the Comptroller of the Currency’s letter of $50,000.00?

          9) Why would Santa Barbara Bank & Trust not properly amortize the 2007 forbearance and workout agreements as seen in the two amortization schedules prepared by Santa Barbara Bank & Trust? Please pay close attention to this email statement on September 7, 2011. ““Furthermore, as we have repeatedly told you, the amortization schedules that we provided to you on May 6, 2011 were prepared by Santa Barbara Bank & Trust employees,”

          10) With the Office of the Comptroller of the Currency showing that $54,922.70 was the deferred amount in 2007 prior to the $22,274.46 being paid in the forbearance and workout agreement. What should the Oceano Nursery monthly payment have been, if it had been properly amortized by Santa Barbara Bank & Trust?

          The questions asked above now need to be answered by (Diana Jessup Lee) or Santa Barbara Bank & Trust with the documents that have been provided by the U. S. Small Business Administration on December 20, 2011.

          Sincerely

          Bill Bookout

          CC California State Attorney General
          CC Office of the Comptroller of the Currency Re: Case # 01944977—01394465 Fax # 713 336-4301
          CC United States Small Business Administration
          CC Adam D. Kaplan Assistant Counsel to the Inspector General U.S. Small Business Administration
          CC Kari A. Overson, Special Agent in Charge Western Regional Office U.S. Small Business Administration Office of Inspector General

          Like or Dislike: Thumb up 11 Thumb down 2

  8. standup says:

    Gotta like that “other persons” part. It looks like Kelly will have some company. Maybe Wade, Warren, etc.

    Like or Dislike: Thumb up 32 Thumb down 1

    • centralcoastcoyote says:

      I think more like people that signed your checks, thats all jay ever worked with was the contractors.

      Like or Dislike: Thumb up 3 Thumb down 8

      • Cindy says:

        He worked with people like Grigger Jones and also the A-Town city staff but I suspect it was Gearhart that cut the big deals behind closed doors. The thing about Gearhart is that he constantly exercised his “bragging rights”. No doubt, Miller knows plenty in fact I wouldn’t be surprised if following the footprints and grubby fingers of those who hide behind doors is what has taken so long.

        Like or Dislike: Thumb up 16 Thumb down 1

  9. danika says:

    Um….why?

    Like or Dislike: Thumb up 5 Thumb down 3

    • Robert1 says:

      He needs more time to paste as much as possible on the other person!!!!! Deal making in the back room.

      Like or Dislike: Thumb up 17 Thumb down 1

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