Gearhart, Hurst investors dug their own hole, says lawyer

August 9, 2013
Kelly Gearhart

Kelly Gearhart

An attorney for Cuesta Title suggested to jurors Thursday in a San Luis Obispo courtroom that investors’ greed was partly responsible for alleged fraud committed by former lender Jay Hurst Miller, developer Kelly Gearhart, and title company officials.

In a session being live-streamed by Courtroom View Network, attorney Mack Staton acknowledged that Miller and Gearhart “are the bad guys,” but noted that investors were receiving 12 to 13 percent return on their investments. Consequently, they did not pay adequate attention to the way their money was being spent.

Staton also suggested that Miller’s prior relationship with many of the investors caused them to be “lulled” into a sense of complacency.

The civil trial initiated by a group of investors started Monday in Superior Court with Judge Charles Crandall presiding. It is the first of several filed civil lawsuits to go to trial.

Stewart Title of California and Stewart Title Guarantee are also defendants in the trial.

Questionable financial transactions by Gearhart, Miller, Cuesta Title and its associates were first reported by CalCoastNews in 2008, beginning a years-long series of exclusive articles detailing the complicit activities of the group.

Most of investors’ money is unaccounted for.

Both Miller and Gearhart are facing criminal charges in addition to their civil woes. Gearhart was indicted by a Los Angeles grand jury, and both men now await further court action.

Cuesta Title official Melanie Schneider is a key figure in the current case, facing allegations that she knew of, and ignored, the fraudulent activities of Miller and Gearhart.

The scheme involved Gearhart’s utilizing false information to secure multi-million-dollar high-interest “bridge” loans from Miller, purportedly for development deals. Gearhart would then use the money to repay earlier investors, and to support an opulent lifestyle.

Gearhart is a one-time “Man of the Year” in his hometown Atascadero, where his largesse made him a favorite of city officials.


32 Comments

  1. Al says:

    8/21/13

    Interesting to see Melanie Schneider on the witness stand. All her attorneys are be paid by Cuesta/Stewart Title it seems although she says she doesn’t know who pays them. Lunch break.

    Like or Dislike: Thumb up 1 Thumb down 1

  2. Al says:

    More irritating news…. Miller is certainly getting away with something here.

    “This is to inform you that the sentencing hearing previously scheduled for October 7, 2013 involving defendant James H. Miller, Jr., has been rescheduled by the Court. The new sentencing date for defendant Miller is March 17, 2014.

    Please note that the trial date for U.S. v. Kelly Gearhart, Case No. 12-CR-631, is currently set for November 12, 2013.”

    Like or Dislike: Thumb up 4 Thumb down 0

  3. Nancimeek says:

    No mention of Gearharts long time friend and attorney Robert Grigger Jones? No mention of syphoning money to the Pe Ji Ho Ta venture? How about the real estate documents notarized more than once by Colleen, Jones’ secretary?

    Like or Dislike: Thumb up 4 Thumb down 4

    • local andy says:

      This is a civil trial between Cuesta Title, Stewart Title, and the investors that were insured under the title policies issued by Stewart Title. It is not Kelly’s criminal trial, nor does it have any relevance to Robert Grigger Jones or Kelly’s dealings with the Pe Ji Ho Ta tribe. You are beating a dead horse Nanci. I think all the people that read this site have gotten the fact that you were the victim of Kelly’s dealings but this trial doesn’t have ANYTHING to do with you. Let it go.

      Like or Dislike: Thumb up 4 Thumb down 5

      • Nancimeek says:

        Local Andy? ( love it when people are afraid of using their real names) Jones was definitely involved as in the words of Gearhart’s stepmother he and Gearhart were thick as thieves. And yes it does involve our case because of the Pe Ji Ho Ta Indian casino investments money from the investors.

        Like or Dislike: Thumb up 2 Thumb down 5

  4. Al says:

    So CCN is not subscribed to the CVN News Feed? Maybe I will pony up the $100 to see whats happening……

    Like or Dislike: Thumb up 3 Thumb down 0

  5. Mr. Holly says:

    With Cuesta being represented by an attorney who is blaming the investors for what they did instead of defending the crooks at Cuesta and Stewart Title companies makes one think about ever using either of these companies in the future.

    Like or Dislike: Thumb up 11 Thumb down 0

    • chickenboo says:

      True enough! The downturn of the economy may have broken our backs, but being lied to and cheated by the very institutions and community leaders we have always been taught to trust has broken our hearts. This travesty will have long reaching effects in our entire society for many years to come. Who can REALLY trust ANYone anymore when it comes to investing your money? Can you REALLY be sure your bank will have it’s doors open tomorrow when you go to get your money? This was a bitter lesson. Americans, by nature, are such trusting people. WE wouldn’t think of cheating anyone, so the thought that we might get skinned by our trusted officials never crosses our minds. This is going to make it really hard for smaller contractors to build homes like they used to. It’s going to effect communities on a very personal level.

      Like or Dislike: Thumb up 8 Thumb down 0

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