FBI accuses Miller of racketeering and money laundering

May 29, 2009
Jay and Laurel Miller's home is slated to close escrow in the near future

Jay and Laurel Miller's home is slated to close escrow in the near future

By KAREN VELIE

The FBI seized proceeds from Hurst Financial Inc. (HFI) President Jay Miller’s home May 27 because of allegations of racketeering, money laundering, and wire fraud, according to the seizure warrant.

“A racket is an illegal business, usually run as part of organized crime. Engaging in racket is called racketeering,” according to Wikipedia.

Earlier today, Superior Court of San Luis Obispo County Judge Roger T. Picquet ordered a temporary restraining order against the proceeds of Miller’s home following a request by HFI investors Murray Powell and David Rios. Last May, Rios and Powell filed an 11 count fraud and civil conspiracy lawsuit against Miller, HFI loan officer Courtney Brard, and North County developer Kelly Gearhart in which they claim the trio bilked them out of their investments.

Following a request from Picquet for an account of the net proceeds of Miller’s Templeton home, the Millers’ attorneys, Robert Grigger Jones and Glen Lewis, sprinted to the title company to inspect escrow records. In the miscellaneous column, directly below a charge of $645 for Al’s Septic, is a Federal Bureau of Investigation seizure warrant debit of $200,462.

The warrant alleges the property faces forfeiture under crimes and criminal procedure U.S. Code “concerning violations of Title 18… (which lists codes for racketeering, money laundering, and wire fraud),” according to the search warrant.

Miller’s 3,031 square foot home on 1015 Herdsman Way in Templeton includes a vineyard consisting of four acres of Merlot and Malbec varietals. It sold for $1.3 million leaving net proceeds of $690,000.

Even so, the court agreed to freeze only $244,757, half of the proceeds remaining after closing costs and federal seizures. The judge agreed that Miller’s wife, Laurel Miller, is entitled to the other half of the proceeds.

In June 2008, at a time Hurst Financial Inc. was in serious financial distress, James and Laurel Miller entered into a postnuptial agreement that granted Laurel half interest in their home. The couple married on Dec. 24, 1996.

The FBI and the San Luis Obispo District Attorney’s Offices mounted an investigation into fraudulent lending and financial practices by Miller, Brard, and Gearhart last year. At this time, charges have not yet been filed against the trio.

HFI made short-term “bridge” loans to contractors. Investors, during good times, would receive 12 percent on their money in monthly interest payments, with their entire principal returned upon maturation of the loan.

More than 1,200 investors, primarily seniors, invested more than a $100 million that is currently unaccounted for. According to the Department of Real Estate, Miller failed in his contractual agreement to protect investors by funding projects only as work was completed, with progressive payments. Instead, he paid Gearhart in lump sums “without any monitoring of the construction.”


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By: Cindy on 6/3/09

Well said Mike B. The Good Ole Boys did everything they could to harass you when you were elected to our City Council. Its a breath of fresh air watching you (now that you can) take the gloves off.


Paperboy- I agree that the wife shouldn’t be getting away with the investors money. The trust was executed last summer after the investors had already been bilked. Also I recall that the “Dumpster Chronicles” (notes found in Millers trash) revealed his plans to actually divert assets into his wifes name to protect them from possible forfeiture. I wonder why the FBI and court would honor the trust considering that it was designed to shelter ill gotten assets?

By: shingh on 6/3/09

Cleveland’s story on this in today’s Tribune not only is taken from CCN site, but the FBI Agent named Dieter W. is an agent from the Santa Maria Field office and over 3 years ago was contacted by Congresswoman Capps office to Investigate RW Hertel & Sons, Inc. the agent declined. He said he was too business on his horse ranch in AG to take on Hertl. Now three years later Hertel has screwed so many people the FBI should be ashamed of the three year delay or maybe some one from OPR should look into why after a Congressional request was made to them to investigate Hertel and Fowler they dropped the ball ? another cover up or buy off ?

By: shingh on 6/3/09

The Tribune albeit a week late is now reporting on this case, so if you want news and you want it fast go to CCN, the Tribune told me it took the reporter time to get her facts straight. She took most of the information from CCN and they made three calls her co=workers all laughed at how stupid she seemed to do a story already published, by CCN will once again the Tribune is out of touch with the community.

By: FRACTUREDFAIRIETALES on 6/2/09

Yo Lifelongatasresident: I wouldn’t be quite so proud of the half-a**@d way this town has run its business for your lifetime. In fact, if I were you, I would be ashamed and appalled!! Did NO ONE ever see anything wrong with “business as usual”? here in good old MudHole. Please tell me you were at least aware that shady dealings were possibly being done. Because if not, then you are one who has allowed the infiltration of graft and greed. If the long time residents and those who have a stake in their community were to stand up and be heard, then more notice would have been taken of the goings-on and perhaps, we could have avoided some. However, those with their heads in the sand have done a great disservice to those wanting a better life here. Don’t be so proud of being an old timer if all you did was shut your eyes and ears to what was around you. That is nothing to be proud of, dude.

By: MikeB on 6/2/09

LifeLongAtasresident:


The only help that I need, is the same help that this town needs. We need the help of aggressive state and federal law enforcement agents and prosecutors who can help clean up the graft, as well as the political will to accomplish the task.


And no, I didn’t say everyone is crooked and a thief, but there are enough here to make life miserable and prevent our town from blooming into its potential.


If you took the time to read below you would see my post on May 30, where I responded to Skyler’s kind words.


“Thanks for the vote of confidence but know that there are lots of good honest folks in Atascadero. Many are simply hunkered down having endured years of dishonesty and self serving politics.


I truly believe that goodness will prevail and change our town.


In mythology, Phoenix rose from the ashes …… So will we.”


I have volumes of information which corroborates my suggestion that there are some serious breaches of ethics and law in Atascadero. I would love to be called before a federal or state grand jury to set the record straight.


If you truly want to help this community LifeLongAtasresident, pull your head out of the sand and stop engaging in the attitude that corruption is the only way this town can function, unless of course you are involved.


Mike


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By: sunnyhaven on 6/2/09

http://archive.newtimesslo.com/archive/2004-06-10/shredder/index.html


A shredder article from 2004, About McKinney.

I say sh*tcan the entire Atascadero city managers & start a new.


Hope all involved in ripping off the investors do some serious jail time.

I agree paperboy. The wife should not get

half of anything. There should be nothing left to split.

By: Roo on 6/2/09

Looks like Miller is posting again…

By: BeenThereDoneThat on 6/1/09

AMEN!! Paperboy. AMEN!!

By: paperboy on 6/1/09

So the wife walks away from the marriage a free woman and $200K richer? That’s BS if I ever heard it. If she wasn’t in on it from the beginning, then she’s in on it from the middle or the end, either way the money is not hers and should be taken away too.


By: mo on 5/31/09

Mike B:

From day one you were the only City Councelmen that could smell a rat or was not on the take like(Clay,O’malley, McKinney). As far back as when McKinney was the City Manager of Shafter, he demostrated poor judgement, and the morals of an alley cat. Just to re-cap McKinney hired his best friend and college roommate to be the Police Chief of Shafter. This same Police Chief was later caught having sex with a minor, which is bad enough, but later admitted McKinney would let him use his house.. After Mckinney was hired as City Manager of Atascadero, he struck again. He hired this same ex-police chief as a computer consultant for the City of Atascadero,I believe in excess of $ 60,000 per year.

By: shingh on 5/31/09

Thanks MikeB, I remember when Wade wanted to make a deal with a Private Prison to be built locally as well, the Return to Custody Facility is big $$ business. The date on the memo where he got from Hertel was 8-22-05, I was told all others $$ memos were to be off the books so no paper trail exists. I can only assume with all these new investigations his name will or is part of it. I know of that New Law Senate Bill S.386 did become law on May-20-09 thanks Mort for the information and i hope you in law and sing to the feds and get a deal from the state prison to get out and make things right.

By: hotdog on 5/31/09

Well Mort, I hope your contact is singing to high heaven. If for any reason that doesn’t produce anything you can always use the ‘Tip Your Team’ button above to get some word out. Over 5000 people have been ripped off around here, and the cascading losses will affect many more. We need info, and relief, and fairly quick. Some have already been foreclosed on and suffered other negative effects of this local disaster. Up to now our glorious authorities have been of scant help, and the lack of oversight helped to bring all this down on us.

We will see, as info develops, that much if not all our problems were the result of greed and hubris by the

‘suits’ (fat cats on wall street, and our local bums brokering bad loans), and a giant lack of oversight by State and Fed agencies. Sort of like the torture debate, as time goes on we are left will less and less doubt that what we have been doing is torture, and that it was ordered from the highest office in the land.

By: Mort on 5/31/09

I do not know much about all of your problems with the alleged financial irregularities and money and Mortgage problems. But was speaking to my In-Law from your local prison. He said a he was informed by his Counsel to make a deal to get out. He needs to cooperate with a new federal task force recently formed in the Central California area covering Mortgage Fraud, Bank Fraud, Loan Fraud and Appraisal Inflation Fraud, Wire fraud, Money Laundering etc. He was told as of 5-20-09 a new law was signed by the President called the Fraud Enforcement & Recovery Act of 2009. Starting about a week ago this task force got marching orders to focus on 14 people and 6 businesses on the Central Coast he said many of the people your site has named over the past 10 months are the subject and target of this task force, so help is or already has began. He is going to tell all he knew so he can make a deal to get an early release. He has been visited by Secret Service, FBI, IRS, Postal Inspectors, SEC and others so apparently this is a really big deal and now that a new law and funding are available i can only assume from what he said your site was of great help in getting several Central Coast firms and people investigated and looking at several Bankruptcy fraud matters as well. So my In-law says after today’s visit, he will tell what he knows and from what he says it is plenty. I also learned too your inmates get access to computers, so he has it pretty good, his offense was not drugs or violence but financial in nature.


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y: MikeB on 5/31/09

Singh: (You may also be interested in this TruthbeKnown)


Your post which raised the issue of “kick backs” as related to the Asst City Manager spurred a recollection.


Months ago a citizen provided me a link to a website


http://www.autoaccident.com/filings/95/JUL06D2895.html


The website contained language about a legal action which named Wade McKinney while he was the City Manager in Shafter.

I find the language troubeling.


I wont print all of the language because it is lenthy but you can read it by accessing the URL mentioned above.


The language include the following:


“Gardemeyer’s motions for summary adjudication of the first through

fourth causes of action in CDC’s third amended cross-complaint in No.

533434 and the first through third and ninth causes of action in CDC’s

amended cross-complaint in No. 374229 are denied. The following triable issues of material fact exist:

(1) whether Gardemeyer intentionally or negligently misrepresented

material facts; in particular, whether Gardemeyer misrepresented that it had secured RTC financing and the actual costs of such financing, as shown by the deposition testimony of Robert McKee and James Tilton regarding Gardemeyer’s statements about financing on October 5,

1989, and the conflicting declarations of Dennis Gardemeyer and Gregory Rossini denying such statements; and whether Gardemeyer provided actual and estimated cost figures which, without disclosure to CDC, dishonestly inflated the RTC facility construction and financing costs to include the cost of constructing a Taft police station and “kickbacks” to the Cities of Shafter and Taft, as shown by the deposition testimony of Shafter City Manager McKinney describing the agreement between himself and Gardemeyer whereby Gardemeyer would pay Shafter cost savings of up to $700,000 from the construction of

the Shafter RTC facility in return for being selected as the developer for the RTC facility, the deposition testimony of Bill Kytola regarding the agreement between the City of Taft and Gardemeyer with respect to the funding for the construction of the Taft police station in conjunction with the Taft RTC facility, the deposition testimony of John Brown regarding an agreement between the City of Taft and Gardemeyer for the construction of a police station in return for Taft’s selection of Gardemeyer to build an RTC facility, Gardemeyer’s admission in discovery responses that he used RTC facility funds in the construction of the Taft police station, and the conflicting declarations of Dennis Gardemeyer and Gregory Rossini;”


I do not have the legal expertise to fully decipher this legal language but I am sure the readers would appreciate if anyone with legal background could read the entire record (refer URL above) and help shed some light on this matter.

By: Bluebird on 5/31/09

Since no one has said it I want express my appreciation to Murray Powell and his partner for bull-dogging this investigation (and not waiting for the DA). Powell and Rios moved very quickly when they discovered Gearhart did not intend to develop the property. Typically Gearhart went through the process of getting a project partially approved, if investors asked any questions he would blame the city for holding him up. Murray did a lot of the foot work himself.

Interesting how squeaky clean, dedicating his life to public service Grigger Jones keeps showing up in these sleazy investment schemes.

And kudos to Mike Brennler who during public comment at the Atascadero mutual water board meeting exposed that Grigger Jones, who had connections with Gearhart when he was on the planning commission voted on all Gearhart’s projects. The Board sat there stone faced but then they are all part of the good old boy/girl cadre. Brennler when he was on the council was the only councilperson to ask the right questions about the Printery which Gearhart used as a cash cow and never paid a nickel of property taxes. McKinney intervened when staff tried to do their job because McKinney also used the Printery as a cash cow.

By: shingh on 5/31/09

I recall a meeting just a couple of years ago where Wade told his assistant Jim Lewis to figure a way to give back or kick back from the City coffers $325K to Hertel and Sons all while they were defaulting on loans in Atascadero. I checked with one of the Investigators working on Hertel’s Bankruptcy Fraud Investigation and she said indeed their was a memo where Jim Lewis did request a ” refund” disguised as such to kick back to the developer this $325K now she said that and more are the subject of their Investigations for some of the Creditors and no wonder they won’t appear at the BK hearing under oath testimony is required.

By: skyler on 5/30/09

good analysis I’d say Newsome:…but often those same POPR folks (big land holders)want to take rights from those with less money ie power. Like a contol issue over other peoples land….kind of hypocritical. I can do what i want and the heck with your rights approach. At least some of the developers I have seen in action have this mentality. I am all for property rights. Just don’t want to be walked on by others who use their $ and influence to get their way at others expense.


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By: Newsome on 5/30/09

Membership in POPR only requires a belief that your property rights are being usurped by an overzealous government. Most POPR members are small-holders and not developers at all. Big Dev feels the same pain POPR members do (presumably on a larger scale), and in that regard, they are kindred spirits.

By: skyler on 5/30/09

Hope so Mike:

It’s discouraging when the same POPR developers and their circle pumps money into elections to run their own. The same groups scratching e/other’s backs and sitting on bank boards and lending themselves money.Bit of a shake down now in SLO county anyway. Time to clean house everywhere before we lose our quality of life here and any semblance of the “rule of law” the latest buzz word! Keep standing up for the truth and honest government. Is that an oxymoron?

By: shingh on 5/30/09

Nexus is Wade learned from his parents the way to work with Developers on the sly, Wade and others in the City were in on the developers and deal making for the City, I think it is called quid quo pro

By: Clemintine on 5/30/09

Just read a New Times story that reported that a former Atascadero Chief was charged with vandalism having purposely scratching his neighbor’s vehicle.


Is there something in Atascadero’s water we need to know about?

By: Truthbeknown on 5/30/09

“Wade is under a dark cloud, he came from Tom & Sue McKinney who had been in Real Estate in Lake Isabella, CA so he learned fast how to be dubious.”


Let me get this straight . . . if your parents are realtors from Lake Isabella, you are under a dark cloud and a dubious fast learner? How could I have missed that fact?


“Shafter is where he learned to go to bed with the good ole boys, got in trouble came here.”


Must of been from the South Side of Shafter, I’ve heard it’s pretty bad there. Care to fill us in on the “trouble” he got into?


“Remember their have been several big Investments and Real Estate scam in and around Astascadero, look at Las Lomas or what was Atascadero Ventures, LLC gone belly up, changed to Atascadero Investments, LLC same people just different names.”


So what is your nexus to the City Manager?

By: shingh on 5/30/09

Wade is under a dark cloud, he came from Tom & Sue McKinney who had been in Real Estate in Lake Isabella, CA so he learned fast how to be dubious. Shafter is where he learned to go to bed with the good ole boys, got in trouble came here. Remember their have been several big Investments and Real Estate scam in and around Astascadero, look at Las Lomas or what was Atascadero Ventures, LLC gone belly up, changed to Atascadero Investments, LLC same people just different names. Now Yesterday the both the Ventura Star and Tribune reported the failure of the owners of RW Hertel & Sons to appear at several Required hearings. Ron Hertel & Robert Fowler who were deeply involved in the City Gov. of Atascadero on the failed deal their. Now Federal Officials have seized much of there assets from Jets, Hotels, Land, Accounts, Yachts with more seizures to come. They failed to appear because you have to Tell the TRUTH under oath they can NOT tell the truth thus refuse to show. But as one Major US firm is after them GE Capital for the Millions they took, so I highly suspect the many Federal and State’s agencies investigating them will soon close in on there dealing with City of Atascadero and the many others who have been involved in there years long scams and cons games. How on Earth can you Lie take other peoples monies including the banks and investors in the mega millions and say I’m broke and can pay my taxes or bills ? yet they have and can donate to local, state and federal politicians. A recent check of public records shows both Hertel & Fowler and many other associated with them are facing some very serious charges and allegations. That may be why so many out of town Law Firms Investigators and Official Gov. Investigators have been gathering statements and records. In preparation for search warrants and arrest warrants or to present to the Federal Grand Jury for Indictments. So the question again where is the millions of dollars gone ? Off Shore, Cayman Is., Costa Rica, or secreted into other names to hide ? I think the end results will find out.


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By: MikeB on 5/30/09

Skyler:


Thanks for the vote of confidence but know that there are lots of good honest folks in Atascadero. Many are simply hunkered down having endured years of dishonesty and self serving politics.


I truly believe that goodness will prevail and change our town.


In mythology, Phoenix rose from the ashes …… So will we.


Mike

By: Truthbeknown on 5/29/09

“His record in Shafter & Atascadero speaks for its self.”


Really? Please enlighten us with detailed proof.

By: starvingmexican on 5/29/09

I picked lettuce for Senor Miller.I hope they don’t come after me.Poor Mr. Miller.He was such a fine man.

By: Fedup on 5/29/09

To Truthbeknown:

If you think Wade McKinney isn’t a politician than you need a reality check.

He is the biggest sleaze of the bunch. He put the “G” in good old boy. His record in Shafter & Atascadero speaks for its self. I cant wait to see him led away in handcuffs on the nightly news.

By: skyler on 5/29/09

Mike B you are the only ethical lot left in Atrashcadero-weyrich,filiphoni miller fonzi,gearhart, hurst, EFI, clay,grigger jones….the list goes on…

By: Truthbeknown on 5/29/09

Fedup on 5/29/09 said: “One reason that it has taken the FBI et al so long to drop the hammer is that they want to prosecute all the people involved in this. Gearhart and Miller have bought and paid for many local politicians (Clay, Fonzi, Mckenny, etc).”


Huh? Gee, I didn’t know McKinney was a politician. I thought he was a City employee. If you’re going to make accusations that someone is on the take, please provide proof. Otherwise, you are just spouting off.

By: Nameless on 5/29/09

Wal Mart is anothr issue. Stay on the subjct

By: FRACTUREDFAIRIETALES on 5/29/09

Eventually, Good Ole’ Boys will pay a price for their corruption, just like Hurst and Gearhart, Insider. You, of all people, should be aware of that.

By: insider on 5/29/09

yeah Unbelievable you got em right where you want em.

By: Unbelievable on 5/29/09

C’mon Insider, please name the “innocent individuals” that Brennler has destroyed in his “principled battle”??

As for Wal-Mart: back in the day when it was first announced by the Rottmann Group, there was no Wal-Mart according to them? Why did they have to lie? Why didn’t they tell the truth about what was going on? Do you have an inkling of thought that honesty from the beginning might have made the whole thing visible from the onset?


No, the damage done is the lies and mis-truth perpetrated by the Good-Ol’-Boy group in thinking that they can do whatever they want in their quest for the almighty dollar. Their reputation is shot, and will never recover. Just because some have uncovered their deviousness doesn’t make their acts any more justified. They are getting what they deserve.


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By: MartyTracey on 5/29/09

So, according to the leading Atascadero stalwart, the reason Gearhart has bilked retirees, the City of Atascadero and others out of millions of dollars is Mike Brennler made him do it. Amazing!


By: hotdog on 5/29/09

I stand with Mike Brennler.

By: insider on 5/29/09

To Brenler

I stand by my comments. Your actions have been well documented. There is no more to say. Youre a right fighter and it matters not how many are destoyed in your principled battles. Your whistle brought no support from the DA or law enforcement. You were wrong. Face it. What it did do is push Gearhart into a corner that hastened his unwinding potential to great cost to the individuals who were scammed to come up with the money you were pressing for. As to WalMart. This town would have welcomed the original proposal and the general plan change needed. We know this because we are back to the original plan or close to it and the City supports it and the general plan amendment necessary. You are but a pathetic self absorbed right fighter who wants all others to conform to your decissions. Good luck changing the outcome. The damage of your efforts is already done.

By: MikeB on 5/29/09

So let me understand your logic Insider.


If a public official has strong reason to believe that laws were violated and that the city was swindled he should do nothing but sit on his hands and look the other way?


That’s precisely why Atascadero is suffering today.


To suggest that my blowing the whistle on Gearhart caused him to then lean on the “retirment investors” is preposterous. The landslide was already was already in motion.


Your suggested nexus to the Wal mart issue is also foolish. I voted in favor of Wal-mart moving forward on their proposed project which was under 150,000 sq feet and consistent with the General Plan. I also supported an effort to allow the voters to decide the issue as related to size and scope.


I supported the 150,000 foot cap as I was worried that in the future Walmart would push the envelope, and guess what? They have.


The store is now proposed to be 157,000 sq ft but that is tentative and it could be larger. They have also added 5 acres to the site plan which is a 24% increase. They have also added a Tire & Lube which early on, they claimed would not happen.


They have not honored their word to the community.


You past posts indicate your loyalty to McKinney and the good ol boys who have caused massive pain to this community.


Don’t think for one moment that there isn’t more to come.


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By: Black_Copter_Pilot on 5/29/09

Well, I’m just saying that any swinging dick can make accusations. and to do so without facts to substanciate the accusation is irresponsible, plan and simple.


WOP WOP WOP

By: BeenThereDoneThat on 5/29/09

One more thing. Ken may LOVE money but he is one of the most honest guys I have known. Talk to anyone that knows Ken or has dealt with him. He is well liked.

By: BeenThereDoneThat on 5/29/09

Fedup. I would be careful in dragging Lerno into this. I know for a FACT that Ken’s business dealings with Kelly all ended back when Home Depot was being built and they were partners on it and the properity below on North Farrell Carrel.


He got screwed out of money by Kelly on that deal.


He also at the same time quit Hurst Finiancial which is now been close to eight years. I DO NOT think he has anything to do with what happened, as most of what happened transpired in the last few years.


I can also tell you from personal experiance that one reason for the fall out is the Ken didn’t want to be a patcy for Kelly.


I can’t speak for the others you mentioned but in the case of Ken I would go back and get better facts before you make a blanket accusation.

By: insider on 5/29/09

It’s true Brenler may have pulled the brick out of the wall that brought it all tumbling down. I’m sure when he forced Gearhart to gather cash he didn’t have for development fees on an incomplete project he sent Kelly right back to the well of his retirement investors. Brenler should be quite proud of himself as I’m sure he is. Surely Gearharts reverse pyramid would have colapsed anyway but Brenler certainly deserves his kudos in the colapse of the hard money and development industry in the North County. The devastation he contributed to in this instance while not noticed by many probably exceeds the financial losses the City of Atascadero has indured through the loss of the revenues the delays he caused in the Wal Mart deal. If that project had been allowed to proceed as originally planned the city would be millions ahead of its current situation. And we all know the project will eventually be complete, but how many years and how many lost dollars the City of Atascadero is behind. Bravo! Brenler your a real asset to the City.

By: FRACTUREDFAIRIETALES on 5/29/09

It’s too bad that some posters are still harboring some type of animosity towards certain past and present CC members (Brennler – Beraud). It shows a complete lack of understanding of the situation and just throws a monkey wrench into a very serious situation. Apparently, having this posters friends come up on charges makes him/her very nervous.

By: Unbelievable on 5/29/09

That’s right Black Copter, I can just imagine the secret meetings that occurred between Gearheart and Brennler discussing how to pretend to embarass Gearheart into paying his development fees.


No, let’s let the blame fall squarely on the GOB’s that thought they could rip off everyone for their own greed. If you have any proof other wise, please show it.


Otherwise, please stop with the “problaby” (sic) label to try and taint others into this mess.


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By: Black_Copter_Pilot on 5/29/09

and right you are Fedup, but lets not forget Bremmler and Beraud as well, the whole council was problaby in on this and as you know, they are smarter than the forementioned

By: RICO on 5/29/09

As always CCN bets the local press again, I saw the Tribune this morning and they repeated a story that the Ventura Star broke on RW Hertel and Robert Fowler, that is the next big seizure to happen. I was informed my a Lawyer friend just yesterday, a Federal Task force of agents was interviewing in the area on Hertel, Fowler and others who have skipped out on Loans. Apparently two of there yachts were seized by Federal Courts and it was learned they Fowler and Hertel are using the same CPA’s and same Lawyers so something is up. Good reporting on the FBI Operations and from what my Lawyer friend say more is coming to many of those you have exposed.

By: Harlow on 5/29/09

I had always thought that the RICO Statute applied to this bunch.


Miller, Gearhart, all or most of the other contractors, Melanie Schneider(Cuesta Title)and of course Pippin and Pippin , the appraisers, and most likely a government official or two…..


This has been quite a large conspiracy, but to leave Laurel Miller out of it? There were large transfers involving her name going on for over a year according to County Records.

Hopefully this will all be exposed.

By: Fedup on 5/29/09

One reason that it has taken the FBI et al so long to drop the hammer is that they want to prosecute all the people involved in this. Gearhart and Miller have bought and paid for many local politicians (Clay, Fonzi, Mckenny, etc). Ken Lerno was working for Hurst financial at the same time he was on the Atascadero City Council. He was forced to resign to avoid prosecution. There is a lot more to this than any of us know. Stay Tuned.

By: BeenThereDoneThat on 5/29/09

I think I see were the Feds may be taking this case. Instead of going after a fraud conviction, they will go after Jay and company, under racketeering. They are simular but different.


Racketeering is pretty general and easier to prove in a court of law.


I figure by proving this they could then tie Kelly into Jay easier to prosecute both.


I would suggest to all to go to wikipedia.org and read the defination of racketeering yourselfs. It (prosecution)is a great way to proceed.


Karen gave a brief describition in article but to read it is something else. It is great.


By taking their (peoples) assets up front they limit their monies they try to get for attorneys. Then it puts most of them more into line of wanting to work with the Gov. for lesser convictions.


The Gov. used this to prosecute Micheal Milkin for the late 80’s debaucle of the S&L’s.

By: Cindy on 5/29/09

This story reads like a train wreck (as did the last one). Not for the less I commend the writer for trying to get the facts out to the public. Too bad that this is all we have.


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By: JorgeEstrada on 5/29/09

More that 1,200 investors, primarily seniors, invested more that $100 million that is currently unaccounted for? I never thought I would read this as a local story. Certainly someone has taken the common knowledge that many come here to retire and have made a harvest before the doctors, rest homes and lawyers. Sad but possible.

By: MikeB on 5/29/09

In mid 2007 I blew the whistle on Gearhart as related to his failure to pay development impact fees associated with a large development on the north side of Atascadero. I felt that the city had been swindled and that the circumstances warranted prosecution. I was disappointed when the DAs Office did not conduct an investigation.


Months later, CalCoastNews.Com broke a story and a firestorm erupted over Gearhart and his relationship with Hurst Financial. Many constituents contacted me with painful stories about their losses.


At the time of my actions there were many who questioned my motives. Editorials in the Tribune suggested that I had unfairly targeted Gearhart. Councilman Jerry Clay had asked me why I was picking on Gearhart and during the failed recall, the husband of Planning Commissioner Roberta Fonzi, suggested I could make the recall go away if I simply issued a public apology to Gearhart. I refused.


Tonight’s Cal Coast News article suggests that the FBI is making steady progress in investigating some of the corruption in the North County. I publicly commend the FBI for their diligence and persistence.


Many of us have waited patiently in hopes of seeing justice and at times have complained, but we must all recognize that a sound and complex investigation can often take a long period of time.


Some of you may ask if I feel some vindication, but there is little consolation in announcing “I told you so,” when considering the many innocent, well intentioned people who have lost their life’s savings.


Mike Brennler

By: BeenThereDoneThat on 5/29/09

Yea I think it blows, that he can transfer some of this to Laurel in a post nup. Done when the shit was hitting the fan? COMON! This is because he saw his possible crimes catching up with him. This is riduculas. The Feds ought to seize her money too. It belongs to the creditors!! Millers are greedy little bastards.

By: hotdog on 5/29/09

Seems like a small step, late in the game, and after over $120 million of stolen money from investors. Hopefully there is more to come. Miller (and Brard) has been selling off all his stuff we bought for him and hiding the proceeds one way or another, I hope the feds are finding other ill gotten gains that belong to us. This particular hit was obvious and easy, what about all the rest?

And doing the math, they made almost 700 k profit (very cool for him in a down market). His half is 244k? Hm, I get around 344k. Since he hired his son (Josh) to sell the place even the vast commission stays in the family. Pretty nifty for the Miller clan. Peanuts for us. But it’s a start.

By: BeenThereDoneThat on 5/29/09

Racketeering!!! If this is true that can usually be pretty big and the F.B.I. filed it?? Sounds like they are still in the background and on the case.


Can this be the start of the house of cards finally starting to fall? I figured it would come awhile after Estate Financial.


I have figured that the only reason this (the whole Hurst/Kelly thing)has taken this long, is that the D.A. and F.B.I. are up to there ying yangs with all the local B.S.


LET’S GET READY TO RUMBLE!!! About time!!