Gearhart’s $28 million Paso project imperiled

April 29, 2008

By DANIEL BLACKBURN and KAREN VELIE

It’s only a few second’s drive time between the weathered plywood sign on Paso Robles’ Jardine Road announcing the imminent approach of “Vista del Hombre,” and its equally unimpressive, unmarked entrance, but that brief moment is sufficient to show passersby that they have encountered one truly unremarkable piece of real estate.

What is remarkable, though, is that hundreds of local investors have put big money and faith into Hurst Financial of Atascadero, and in turn into Vista del Hombre — approximately $28 million already for this project alone — yet have seen only minimal progress on the Kelly Gearhart golf course-business park development over the past several years.

Hurst has doled out to numerous investors approximately 8,000 percent beneficial interest in the planned 32-building development, according to the title report. It appears that investors hold more than 200 percent interest in each structure.

“It’s the lender’s responsibility to make sure beneficial interest adds up to 100 percent,” said one local escrow officer. “You see a lot of this with Hurst and Estate Financial title reports.”

And now recent developments, including both a looming recession and what may prove to be misleading reports of progress on the project, are casting foreboding shadows on the very future of this once-ambitious project.

Just a few months ago, Gearhart was maintaining an optimistic public front regarding Vista del Hombre. In a letter delivered to investors, Gearhart reassured stakeholders that project requirements of the city had been satisfied, and then asked for an extension of 24 months to allow him to “market and sell units.”

He even enlisted the help of a local daily newspaper to validate his “progress” claim.

“This letter is written to update you as to the progress of my major project, Vista Del Hombre, located in Paso Robles,” Gearhart wrote in the letter. “I have attached to your information an article from a recent San Luis Obispo Tribune story. As the article states, the first phase of the overall project is slated for completion by mid-2008. We have installed the entire infrastructure per the city of Paso Robles requirements including a road from the project site all the way to Aerotec Road. This creates an easier pathway.”

However, Gearhart has not yet submitted plans to the city for the required conditions of approval, which include two large expenses — connecting to the city’s sewer system roughly two miles away, and repaving approximately two miles of Dry Creek and Aerotec Roads. Conditions of approval are required prior to occupancy, said Paso Robles City Engineer John Falkenstien, who confirmed that Gearhart’s development currently is not approved for occupation.

“Buildings associated with the golf course, such as the clubhouse, fall under past approvals,” Falkenstien said. “We have approved plans for three buildings for the golf course. We have not approved conditions of use plans for any of the tract.”

Also of growing interest to some Hurst Financial investors is the seemingly cavalier manner in which huge amounts of their money have been doled out based on incomplete and apparently unverified loan application forms.

Neither Gearhart nor Hurst’s Miller have yet responded to telephone calls and detailed e-mails from UncoveredSLO.com asking for explanation or clarification.

Gearhart, a major North County developer, recently stopped making interest payments on many of his Hurst Financial loans. That includes payments to Vista del Hombre investors. Some investors have expressed concern that recouping their principal may be impossible.

The developer owns or controls interest in approximately 100 San Luis Obispo County properties, according to tax and escrow records. Those records suggest that many of Gearhart’s properties are financed well beyond their value.

Gearhart purchased the 35-acre parcel incorporating The Links in 2006 for about $2 million, according to sources. Experts interviewed for this article estimate the property’s current value at no more than $5 million. UncoveredSLO.com talked to escrow and title officers, individual local investors, contractors, and lenders during the article’s preparation.

Located six miles east of downtown Paso Robles, the “new” Vista del Hombre project is on the site of The Links golf course, a flat, dust-blown, tree-bereft expanse of land situated a stone’s throw from the airport. Looking more like a property on the decline than a multi-million-dollar development-in-progress, Vista del Hombre begins with a blacktop road winding through the existing golf course, which was opened in 1996. The narrow road terminates at a group of drab, temporary buildings featuring Porta-potties and a small trailer which houses both a pro shop and a cafeteria.

The Links is promoted on its Web site, www.linkscourseatpaso.com, in a much more colorful manner: “Designed in the tradition of the historical Scottish layouts like St. Andrews and Royal Lytham, The Links at Vista Del Hombre is both fun and challenging for any level of golfer. Four sets of tees accommodate the novice and challenges the advanced player. The Links at Vista Del Hombre is in the heart of the California’s Central Coast wine country. Surrounded by vineyards, The Links Course is just minutes away from wine tasting at its best.”

Some of Gearhart’s investors say they have been informed that the entire project is just “months away” from completion.

However, most of Vista del Hombre’s commercial zone remains vacant land. Three larger steel buildings have been erected near a driving range. Plans –- yet to be approved by city officials — call for eventual construction of the 32 buildings within a 14-acre expanse.

Earlier this month, Gearhart admitted to some investors that he is financially strapped and unable to pay interest on many of his Hurst loans. Numerous investors claim they stopped receiving interest payments months ago, and no principal has been recouped.

In an April 1 letter to investors, Gearhart detailed his plan for financial recovery:

“Obviously, I have formulated a detailed strategy to work my way through liquidating my large portfolios,” Gearhart wrote. “Several of my properties are in escrow at this time, and the sales of these properties will enhance my ability to move forward. I realistically see only these options at this time: 1. Elimination of interest payments, while I work to liquidate properties as fast as possible. 2. As offers are made on properties, I will notify you and we will make a joint decision as to whether we should accept the offers presented. 3. Foreclosure.”

A closer look at the funding methodology involved with Vista del Hombre — considered by Gearhart to be his “major” project –- offers clues about some hard-money lenders’ extraordinary management of investment funds entrusted to them.

(The ongoing woes of another hard money lender, Estate Financial of Paso Robles, have been detailed in a number of UncoveredSLO.com articles beginning March 14.)

Gearhart got his first loan for Vista del Hombre’s purchase and initial infrastructure construction in May 2006 from Atascadero Realtor Jay Miller, owner of Hurst Financial, in the amount of $15 million. Miller in turn had secured that money from private investors lured by promises of high interest returns and placated by Miller’s pledge of a loan-to-value ratio of 44 percent, according to one loan agreement. Translation: the hard money loan could fund no more than 44 percent of the project’s total value. That initial loan was slated to mature in late 2006, but Hurst has not reimbursed investors and ceased providing interest payments.

But by then, Hurst had already lent Gearhart another $11,850,000 for the Vista del Hombre development – escalating Gearhart’s annual interest payments to $4 million. That pact was inked on June 22, 2007, after Hurst attracted more than 100 investors with the same loan-to-value promise. These investors received interest payments for only six months before the payments abruptly ceased.

It apparently wasn’t hard for Gearhart to get the two loans, documents obtained by UncoveredSLO.com show. In his loan applications to Hurst, Gearhart’s reported monthly income and expenses varying dramatically from loan document to loan document.

According to the first Vista del Hombre agreement in 2005, Gearhart claimed a salary of $31,667 a month. Another Hurst agreement dated January 14, 2008, set Gearhart’s monthly income at $240,000. Two weeks later, according to yet another Hurst contract, Gearhart’s income had dropped to only $138,000 a month. Most of the other information lines on the loan applications, copies of which were supplied to investors only after repeated requests, contained no information.

Tags:, Gearhart, Hurst Financial, Paso Robles


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Stefan

By: Anonymous on 5/2/08

You backwoods North county hairy palmed dwarves should stick to what you know: Deer molesting, kiddie fiddling, wife beating, meth snorting, stabbing, pissing up the wall, and robbing.


Actually, sounds like situation normal, so what's the problem then?


By: Anonymous on 5/2/08

One way to know how gearhart is doing financially is to look at his assets. Are there 'for sale' signs up on the cessna, the rolls, the gearhart house? If so, you hurst employees,investors, and gearhart fans are in for a real disapointment. Also, those senior cracker jack boxes never got finished. I heard they did not sell so gearhart is renting them but you do not have to be a senior under the gearhrt rental program – "Have Cash, Will Rent". Meanwhile, work stopped on their senior center building last year and is now deteriorating, along with the entire project. Drive down there and take a look. It is pathetic. And to think the city beleives they will get the printery building restored by gearhart. What a joke!

By: Anonymous on 5/2/08

In memory…. you are the lowest of low. Your comments are worse than rude. The administrator should have censored your ignorant, sensless & disrespectful comment!

By: Anonymous on 5/2/08

Previously

insider says:


interesting! Those senior shacks down by the Tracks, railroad that is, behind Staples in Atascadero, are not in the multiple listing anymore. Hmmmmm. How many sold? Not many I'll bet. However if Kelly got them all rented out and is sending the money to the investors maybe all is good. Is there an investor out there that can enlighten us to the truth on that project. Are you waiting for the market to return? Did you get your money back?


Answer:


Last week the City Council had to approve the special tax assesment districts for that whole area behind the Home Depot/Staples in Atascadero. The choice was to extend over collected funds into future years or povide a one time refund to each property owner. In general the niehborhood wanted to use the funds for future assesments however the unnamed developer who owned the majority of the properties who I assume was Gearhart and the properties which I assume are the senior shacks wanted the money now. I'll bet he did. The developer did not speak for himself. unusual for Kelly. He probably did not want to highlight the fact he still owns 95% of those units. I'll bet he owes 100% more than they are worth. If I am wrong on this please someone correct me.


Stefan

By: Anonymous on 5/2/08

I was at the funeral too and, owing to the eleven-dimensional hyperbolic topology of heaven, it's impossible to spin in one's grave, so I've never understood that cliche.


But you may be surprised to learn that the most popular topics of conversation in heaven are: 1) money, 2) property values and 3) whether to let Wal-Mart in. We've also got more lawyers per capita up here than America, believe it or not. Half of them are tax attorneys and most of the rest handle real estate cases, and it's actually possible to continue the lengthy appeals process posthumously.

By: Anonymous on 5/2/08

Thats uncalled for ! You need to show respect for all the Gearharts .

By: Anonymous on 5/2/08

Yes I was at the funeral. Kelly has embarrassed the entire family. He is a discrace and this isn't the first time!

He never grew up!

By: Anonymous on 5/2/08

TO: IN MEMORY OF DAD


That is completly out of line. You have no right to make comments like that. Were you at the funeral???

By: Anonymous on 5/2/08

John Gearhart

Posted: Tuesday, Apr 22nd, 2008

BY: Staff — April 23, 2008


John “Johnnie” Otto Gearhart, 68, was born in November 1939 in Akron, Ohio and passed away on April 20, 2008, at his home in Creston.


He and his family moved to Atascadero in 1971, where he started Gearhart Construction. He worked in the trade until 1979, when he passed the business on to his son Kelly Gearhart.


KELLY!

DAD IS ROLLING OVER IN HIS GRAVE WITH THE DISCRACE YOU HAVE BROUGHT ON HIS BUSINESS AND HIS FAMILY!

SHAME ON YOU!

By: Anonymous on 5/2/08

Even though the loan amount against the property may be $28 million does not mean that the loan is fully funded. I agree that the interest payments needed to stop, do investors want this over-leveraged loan to become more over-leveraged? Due to the current market it is best to put everything on hold. I think that Hurst did the right thing and I bet most of his investors agree.


TO THE GOD FATHER:

You must be a true insider, if know all these "FACTS", that "Miller went to the cesna factory" you must know Hurst and Gearhart well. ???

By: Anonymous on 5/2/08

dewdog has his head so far up Gearhead's ass he can inspect the backside of his front teeth.

By: Anonymous on 5/2/08

Miller has been little more than Gearharts Puppet over the last few years. From the millions of dollars Gearhart took from local loans and dumped into development schemes in Ohio, to the 7 1/2 million dollar cessna jet he purchased 4 years ago, (Miller went to Cessna factory to help pick out colors)from the giddyness of the supposed 80 million to be made at the Links Golf Course to the 360,000.00 Rolls Royce Gearhart purchased, Miller had nothing but praise for the almighty penguin.


Stefan

By: Anonymous on 5/1/08

why is dewdog all over EF and justifying the Gearhart, Hurst mess? interesting..don't you think.


Investor or friend?

By: Anonymous on 5/1/08

It seems odd that dewdog has such a different additude about the Hurst/Gearhart deal. What many don't seem to understand is that they want to search for the money. As if there is fraud and mismanagment they will find the money in some hidden account somewhere overseas or in someones mattress. What the truth most likely is that even if fraud and mismanagment are the reason, the money is often just gone, through exessive spending or just paying thierselves saleries or commissions or making the interest payments while projects just sit waiting for funding or mis calculation of construction costs. The truth as always lies somewhere in the middle in that grey area of life. So if there is any money left in these project accounts get it now while its still in the loan accounts. Don't let these same people continue to manage your money. Take control of the properties. Take a deep breath and then put together a team of qualified profesionals to finish and liquidate. You may need to hang on to some of the properties for a year or so to allow the market to recover, but take control.

By: Anonymous on 5/1/08

God, don't you people read the posts before spouting off? Those who accuse the victims of being less than prudent are the dumb ones. You haven't a clue what you are talking about.

Many Hurst investors are pretty concerned because their investments were used illegally. Got that, ILLEGALLY. They were the victims of baiting, mismanagement and perhaps fraud.

You monday morning cowboys (or maybe plants from the Hurst/Kelly cabal) are either out of your element or crooked.

And what do you know about the article? Probably nothing. Have you called the Paso building dept? Have you found any of the so called facts are wrong? What are you whining about?

Is there some problem with the clients of a firm discussing the firm's business practices? Nope. Only fools, creeps or union busting thugs would have a problem with that. Which are you?

There is no problem with those who wish to do nothing about some questionable practices that may have come to light. And there is nothing to complain about with those who wish to look into it.

By: Anonymous on 5/1/08

Some time ago I got a "hot tip" from a stock broker regarding an up and becoming stock. I took the bait and invested in it. I watched as it went up in value. And then one day it wasn't there anymore. I asked my stock broker what happened? He said, you lost. Now who am I to blame for that? I looked directly into the mirror and said "you are you dumb s–t."

I really didn't know what I was doing but thought I was going to make the quick buck. I didn't make the quick buck because I didn't know what I was doing. Should my stock broker been more informative? I think so. But the bottom line is that I made the decision and I'm responsible for the end results.

Sometimes you have to admit your mistakes although in todays world there is always an excuse and a reason to blame someone else.

By: Anonymous on 5/1/08

I'm all for positive thinking but anyone who thinks they are going to recover from this is dreaming. Even if the market starts to turn around now these projects are over funded and the interest on them is at 14%.

By: Anonymous on 5/1/08

interesting! Those senior shacks down by the Tracks, railroad that is, behind Staples in Atascadero, are not in the multiple listing anymore. Hmmmmm. How many sold? Not many I'll bet. However if Kelly got them all rented out and is sending the money to the investors maybe all is good. Is there an investor out there that can enlighten us to the truth on that project. Are you waiting for the market to return? Did you get your money back?


Stefan

By: Anonymous on 5/1/08

For those who haven't seen it, here's Robert Shiller's famous chart of historic home prices, adjusted for inflation and other factors:

Link to Shiller home price chart


Scroll to the right side of the chart if your screen isn't wide enough. Keep in mind that this is a national composite — some markets like California have seen much bigger price rises.


Here's S&P's page describing the Case-Shiller Home Price Index. Their methodology is worth reading about, and while there may be doubt about prices from a century ago, recent data is probably sound.

By: Anonymous on 5/1/08

Kelly's got his people working full time just writing posts for this blog. These investments were far worse than risky. These were crap projects to begin with and then they borrowed far more than they were worth from the investors. And the only thing time is going to do is release some steam while these investors really come to grips with the type of loss they are about to incure.

By: Anonymous on 5/1/08

I am not a Hurst investor because I understood the risk o the investments, that they are risky. One problem though, is that Hurst and the other companies, Vanguard, Estate Finacial, Cameron, where advertising them as safe because they were backed by California real estate. That is the problem, these investments were sold with misleading information and the un informed are the ones getting crushed. I would spectulate that 90% of the investors in these prgrams did not fully understand the risks involed.

By: Anonymous on 5/1/08

I have money invested in Hurst on a Gearhart project and understand that times are very very tough right now. I also understand that this is a very high risk investment. At 12% that's higher than the stock market historically performs. Look at the news folks everybody is getting crushed by the real estate bubble even the big guys who luckily get bailed out by the govt. If you invested in Citigroup or Countrywide you could be left with losses. Look at the collapse of Bear Sterns. This bursting of the real estate market is affecting everyone so those of us who invested in these high risk projects need to man up and take our losses. It was a gravy train for too long and no one ever questioned a thing. I'm gonna sit back and wait, I know if I get lawyers involved they're gonna be the one's that are gonna get all the money. I believe in Mr. Gearhart, he's trying his hardest. If there was fraud don't you think he would be in some other country by now. He's trying give him a break and let him get through this.

By: Anonymous on 5/1/08

If you think this real estate downturn is anything like the 1990's – you are in for a surprise.

By: Anonymous on 5/1/08

I am an investor and have been for years…I think we need to ride this storm out, just like we did in the early 90s. I did it then and didn't lose a dime. We have been told that there will be a full accounting. Let's not cut off our noses to spite our face!

By: Anonymous on 5/1/08

Hip , hip time is needed ! These are hard times for a lot of us. I'm a Hrust investor and I'm with you . Give it some time . People all over the U.S. are losing their homes .

By: Anonymous on 5/1/08

Investors received 12% interest for 20 years and now due to the local real estate market these hard money lenders are in some trouble. These are high risk investments, many investors invested their entire life savings and then lived off the interest payments, now they are not receiving payments so they are in an uproar. Where can you get 12% on your money? You could loose all your money in the stock market in a day. Your money is secured by the property, some of these deals may be overleveraged but time is needed to sort out these problems. Do the investors want to take over these development projects and finish them? Who is better suited than Gearhart to finish these projects? Are any of you on this BLOG an actual Hurst Investor? This article is complete slander and filled with no facts, who are these "experts" and "sources", this BLOG is just that, it is not fact it is all opinion.


Stefan

By: Anonymous on 5/1/08

I was wondering the same thing. He is very quiet on this one???

By: Anonymous on 5/1/08

Management of the blog comments confers liability that otherwise does not exist. We want to allow free-wheeling discussions; but if excessive hyperbole and personal attacks continue, we will eliminate all commentary from readers, if necessary. So please… for everyone, use some adult judgment in making comments. Thanks!

By: Anonymous on 5/1/08

Site administrators:


I understand that this is a forum for people's opinions, but there is no need or benefit to showcasing rants like the one below from "to annon below."


Adds nothing. I know you are in the news business, not the moderation business, but how 'bout a little help here?

By: Anonymous on 5/1/08

You gave your money to Kelly Gearhart? You ARE an idiot!

Gearhart is a complete scam slimeball jerk. When you look up "narcissism" in the dictionary kelly's picture is there!

Quit your bitching pal! I doubt you earned that money you invested. Nobody that worked hard for money would ever give it to a meth addict or kelly Gearhart!

Grow up!

By: Anonymous on 4/30/08

Knows when to fold the: Thank you for reminding me of what an imbecile I am. Actually, your comments on this blog show me that you are the imbecile. The economy was a risk I am willing to take. If I believed that the economy caused my lost money, you would be right. But you are not right. I am not adverse to risk and the potential loss that could come from the turns of the economy. But I was and am not willing to assume the risk that the people I trusted to manage my money mismanaged it, stole it, misappropriated it, and lied about it. So I am the idiot. Pardon me for breathing. What world are you living in.

By: Anonymous on 4/30/08

Legal Eagle-e me at rippedoffinvestor@yahoo.com, we have lots to talk about. In fact, why didn't you post an e so others could contact you?

By: Anonymous on 4/30/08

I have been working for the past six weeks on problem loan investment deals made by Hurst that Gearhart in involved in for the purpose of initiating legal action against both of them. I have accumulated substantial amounts of information from many Hurst Investors who currently hold non-performing loans in addition to my own problem loan issues.

By: Anonymous on 4/30/08

knows when to fold them…. It's obvious these blogs attract a lot of trash, you prove the point.

Your ranting is idiotic. We are talking about fraud and mismanagement, the market downturn just exposed it. The brokers are licensed to handle these loans in a certain manner that reduces risk to a known and acceptable level. They failed,( got it?) they failed to do their job. They violated their license and any sense of decent business practices for their own greed.

Get off your high horse and go somewhere else. You're tired of hearing our comments? Go away. This is a place for the victims to chat and decide how to proceed. It galls me to honor your stupid post with a response but here I am.

If you aren't Kelly (or are) and want to discuss this in a mature manner e me at rippedoffinvestor@yahoo.com and I will convince you we were cheated, not victimized by our own greed.


Stefan

By: Anonymous on 4/30/08

I am so tired of hearing you people that invest in these risky,high interest loans bitch and complain when these loans stop making payments. You guys just sound like toddlers having a fit because you aren't getting an interest check from Gearhart. Admit it you would be bitching even if the properties where built out. Bottom line your greedy and you only care about your $$$. Deep down inside you know that's the truth. Now you want to blame these hard money lenders for your money being at risk. Hello you guys seeked them out they didn't come looking for you. These companies have doubled your money!!! Start taking responsibilites for you own investments or should I say greed. Look around us people the economy has taking a dump. Next time you decide to invest with a hard money lender remember it's a risk!!!

By: Anonymous on 4/30/08

I heard Kelly on the radio. He sounded like he was a "queen size blanket" trying to cover up a king size mattress.

By: Anonymous on 4/30/08

Edward.

Many people had a good history with Jay and Kelly. We're glad, but all that time Jay and Kelly prospered too. But now their ponzi scheme has been revealed. Many projects are vacant land and the money seems to be gone (they aren't paying, they are in default, there is no legitimate explanation). These issues are actually about Jay, not Kelly. Jay arranged the loans, he managed (mismanaged) the money, he is the one licensed to do this sort of thing. Ask Jay where your money is since the projects aren't done. Post the response here. I know of around $2 million that seems to be missing, just from a handful of investors. Ask Hurst where your money is.

Everyone must read http://www.dre.ca.gov/pdf_docs/re35.pdf and review their loan documents for consistency with the DRE regulations. Read your docs and that site, you will find your docs and the way the loans were handled are NOT IN ORDER!

Here is what must be done. File complaints with the DRE and DOC, if they get enough complaints the DA will get involved. I hear someone of authority has clamped down on EF, I think that is needed here too. Then this can be sorted out.

Until Jay tells everyone where the money is he looks like a crook. And verify everything you are told, all of it. Email

rippedoffinvestor@yahoo.com if you want to join with other very concerned lenders who don't know where their money is.

By: Anonymous on 4/30/08

You all need to unnerstand that a fella like Kelly, well, he’s used to gettin his way and no qwestions axed. If some folks may have given him some money and they don’t maybe get paid back, well, that’s nobodies concern nohow cept those folks, and sure as hell not some city woman pokin round where she got no bidness pokin.


So back off!!

By: Anonymous on 4/30/08

I've invested with Hurst for 22 years, and with Gearhart for 12 of those years. Always paid, never a problem. Hurst Financial has been good to me.

I want to hear Gearhart next week

By: Anonymous on 4/30/08

Man, Gearhart was P!SSED. He just tried to bully his way through the conversation like a 4th grader. Although, I do have to give him kudos for calling in. I'll bet, on the advice of his attorney, he cancels next week's appearance on the show – unless his hubris gets the bet of him.


Loan fraud for $28 million will get the attention of alot of people.


Stefan

By: Anonymous on 4/30/08

Gearhart is as crooked as a dogs leg but you backwoods, north county bumpkins wouldn't know a crook if it suckled your teet and called you momma.

By: Anonymous on 4/30/08

Where is dewdog in all this/ Is he connected to Kelly somehow? I would have expected to see a post on this subject.

By: Anonymous on 4/30/08

Those so called condos behind staples. I'll bet if you check into it very few were ever sold. The asking price droped around 100k per unit last I saw. A ton of them were listed a few months ago and I did not see one single one of them come up sold. So who ever says they are all full I'll bet they are full of people who are renting. Maybe relatives of people Gearheart owes money to. I'll also bet the current loans are from Hurst and is the construction loans that came due long ago. See if this suit fits.

By: Anonymous on 4/30/08

Wow. Karen, you know better than anyone if someone urges you to go, there must be something to see right here! We know you won't listen to the Kelly clones, stay in north county and muck rake!

I heard Kelly call in, he was a jerk. All the investors know he and Hurst people are hard to get anything out of. If they are afraid of you maybe they have something to hide.

Gearhart will be on Congalton next Wed at 5 pm.

Anyone want to join up with other victims?

rippedoffinvestor@yahoo.com

By: Anonymous on 4/30/08

Kelly Kelly Kelly we know thats you.

By: Anonymous on 4/30/08

Karen, why don't you invest some of your time investigating the Los Osos Sewer system that has been under development for the 24 years I've lived here??? I guess you've given up on the Dalidio project since the likes of you have driven him into the ground also. A little more positive reporting would be appreciated since times are tough for a lot of people right now. Your inaccurate negative reporting is irresponsible. Please stay out of the North County business.

By: Anonymous on 4/30/08

Congalton is done for sure. It's only a matter of time now. For now he is hanging to Dan & Karen's coat tails!


However! This site is here to stay.


I along with many other also wish they would start a local & national issues blog!


traffic = income!

By: Anonymous on 4/30/08

Nice threatening post, Judge, I mean Kelly. Your anger on Congalton was palpable. How does it feel to be backed into a corner, just like the investors you stole from. Get him, Karen.

By: Anonymous on 4/30/08

Great interview on the radio, Karen.


I appreciate Mr. Gearhart calling in, too.


(Congrats, Dave Congaltø, on your good handling of what could have become a circus.)

By: Anonymous on 4/30/08

This website is done, maybe Congalton too.


Stefan

By: Anonymous on 4/30/08

Mr.or Ms. yet no more . your stupin is noted . Now go suck on a rock .

By: Anonymous on 4/30/08

Well, looks like the gack has hit the fan for more local investors. Take heart, you can do something.

File complaints with the Dept of Real Estate, Dept of Corporations and the SLO DA.

And if you want to connect with other local victims for a proactive way to recover our assets e your name, contact info and loan numbers to rippedoffinvestor@yahoo.com.

EF, Hurst and others derive their strength for keeping us divided. Join with others to reclaim your rights, and money. They won't give us info on each other as required by law, join our group and we will attempt to get co lenders together. If you know any elderly people tell them about all this, they don't know the peril they face.

And listen in tonight at 5 to see what Karen and Dave have to day.

And if anyone wants to help in this effort send that info.

rippedoffinvestor@yahoo.com

rippedoffinvestor@yahoo.com

By: Anonymous on 4/30/08

Karen Velie will be on my radio show tonight (Wednesday) at 5:05 to discuss this story. Tune in to KVEC 920AM.

By: Anonymous on 4/30/08

Booming markets attract fraud, whether in property or the stockmarket, and fraud feeds on greed. SLOBear's "Only when the tide recedes" quote is right, and is a famous Warren Buffett-ism. Downturns and crashes are an important and necessary corrective to shake out all the nonsense, and this was just as true with the dot-com and telecom bubbles.


Buffett has lately been quoted widely on the credit crunch and housing, and he's pretty pessimistic. This interview in Fortune is worth reading just for his views on the mortgage securitization game. A lot of smart finance guys were deluding themselves too.


Kudos to UncoveredSLO!

By: Anonymous on 4/30/08

I know Gearhart and I wouldn't trust that clown with my pocket change!


Every project he touches is nightmare!


Don't people do their homework before they give away their money! Well I guess "Stupid is as stupid does"!


I hope this is yet another lesson!

By: Anonymous on 4/30/08

Ha hahhaha

I just love SLO Bear's analogy!

and…

Watch Out for Dan & Karen. The waves can knock your bathing suit off..

By: Anonymous on 4/30/08

It would appear that SLO county is in for a long ride. The economy "in of itself" is a serious problem. When we heap these added features on to the existing precarious situation,…well need I say more? I think the Tribune has been very irresponsible. I think they are clearly bias. I've seen "way to much slanted reporting" in favor of what I consider to be the Good Old Faction. What about the Good Old Citizens for a change?


Stefan

By: Anonymous on 4/30/08

Holy Crap!


These guys make EFI look legitimate. The greed displayed by these bull-market geniuses is just staggering.


Alan Little … check

Erich Schaefer … check

Kelly Gearhart … check


I wonder who's next?


"It is only when the tide recedes do you see who is swimming naked"

By: Anonymous on 4/29/08

Anybody stupid enough to lend money to Hurst or Gearhart deserves what they get. DO YOU PEOPLE NOT NOW WHAT KIND OF PERSON KELLY GEARHART IS!!!!

By: Anonymous on 4/29/08

This is SHAMEFUL… It's got to be illegal. The FED's are looking into this stuff in North County. People are going to go to jail for this. Unfortunately it will be white collar federal prison which is the best of the best.

By: Anonymous on 4/29/08

Oh Shit, I was afraid of this. I'm going to strangle somebody. I was watching the EF story unfold and hoping I wasn't in the same trouble their investors were in.I've BEEN RIPPED OFF. I knew it, I just knew it. I'm going to strangle the Tribune those a–hole idiots ass kissing SOB's. How stupid can they be?

I believed that they had the facts. I'll sue them, yes I will.

By: Anonymous on 4/29/08

Kelly has always been good at keeping people quite about what he owes or doesn't owe. Imagine how scared these investors are and have been that know one has complained out loud about not getting thier interest payments for half a year now. The lid is off this hard money thing and a bunch of people have lost thier life savings and retirements. These projects of Gearhearts are crap have you seen those dog houses at home depot? This is a perfect example of its not who you know but how much you owe. This guy was so deep his lender and his investors felt they had no choice but to continue to fund him. Now what?

By: Anonymous on 4/29/08

A blind man in the eye of a tornado could have seen this one coming.