Kelly Gearhart and James Miller receive another reprieve
January 17, 2014
By KAREN VELIE
For the fifth time, former North County developer Kelly Gearhart’s fraud trial and Hurst Financial president James Miller’s sentencing hearing have been delayed.
A federal judge continued Gearhart’s trial from Feb. 18 to June 17. Miller’s hearing has been continued from March 17 to Sept. 8.
“Failure to grant the requested continuance would result in a miscarriage of justice, would unreasonably deny defendant continuity of counsel, and would deny defense counsel the necessary time for effective preparation , taking into account the exercise for due diligence,” said United States District Judge Otis D. Wright II in his finding.
According to federal prosecutors, Gearhart and Miller defrauded investors who put money into Central Coast real estate projects. Gearhart allegedly siphoned off development funds for other purposes, including maintaining a lavish lifestyle.
In the summer of 2011, Miller agreed to plead guilty to charges of fraud and money laundering as part of a plea agreement the court then filed under seal. It is likely that his testimony against Gearhart and others will result in a shortened prison sentence.
Because Miller’s sentencing hearing is to follow Gearhart’s criminal trial, each time Gearhart’s receives a continuance Miller is provided a reprieve from federal prison. Both men remain out of custody.
Gearhart was indicted on July 5, 2012. A month later, Gearhart plead not guilty to 16 charges of mail fraud, wire fraud and money laundering at a federal court in Los Angeles. He faces up to 300 years in federal prison if convicted on all charges.
Attorneys for Gearhart have noted a variety of reasons for the delays including the need to have more time to review financial documents, other court conflicts and the need for Gearhart’s public defender Kim Savo to be out of state due to an adoption. The current extension was granted in order to provide the defense attorneys time for preparation.