Gearhart, Hurst investors dug their own hole, says lawyer
August 9, 2013
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.