Hurst’s Miller alleges Shores brothers defrauded investors
April 6, 2009
By KAREN VELIE
Prominent North County developer Jimmie Shores says he doesn’t have to repay a $700,000 hard-money loan because his brother, Ronnie Shores, stole the money, while Hurst Financial President Jay Miller, maintains the Shores are trying to defraud investors.
“I don’t think he (Jimmie Shores) had any intention of building anything,” Miller said. “He never even took out the permits. I took them out and paid for them.”
Jimmie Shores received two short term construction loans in 2006 from Miller, in turn, Miller placed 20 private investors, lured by the promise of high returns, on the property deeds of trust as fractionalized holders.
Those initial loans were to mature in early 2008, but Shores has not reimbursed investors, and ceased providing the agreed interest payments of $4,166 a month after receiving his loan.
Located in northeastern Atascadero, the lots at the dispute’s center are part of a small subdivision of single-family homes.The lots currently are bare except for a tangled crop of weeds.
In response to a foreclosure action initiated by attorney Peter Josserand, Jimmie Shores, the owner of a number of local businesses including a Beacon service station on El Camino Real, offered investors 25 cents on the dollar to forgive the loan. He claimed he had received only $15,000 of the $700,000 he was promised from Hurst Financial, but that he felt sorry for the investors and wanted to help out.
Copies of canceled checks appear to show Jimmie Shores was fully vested by the end of 2006.
In his defense, Jimmie Shores informed investors that his brother, Ronnie Shores, forged his name on the checks and stole the money. Ronnie is reported to be a frequent companion of developer Kelly Gearhart during high stakes gambling jaunts to Las Vegas. Jimmie then agreed to up the ante and provide investors 50 cents on the dollar in exchange for their forgiveness of his indebtedness.
“Jimmie didn’t get the checks, Ronnie cashed the checks and took the money,” said Josh George, an attorney with the law firm of Cumberland, Coates & Duenow representing Jimmie Shores. George added that because Ronnie Shores picked up the checks from Hurst Financial, forged them, and then withdrew the funds shortly after depositing them into bank accounts, Jimmie Shores is not responsible for repayment of money he never received.
Asked about the allegations, Ronnie Shores waved his hand in the air, made a grunting sound, and ended the interview by slamming the front door to his home.
According to Miller, the Shores brothers had received loans for numerous projects they had built in the past, and that the checks in question had been placed into an account held jointly by the brothers.
The civil case will be heard in San Luis Obispo County Superior Court on July 8.