Kelly Gearhart’s personal fall from grace

December 18, 2010

John Gearhart

(Editor’s note: This is the final in a four part series about the story of North County developer Kelly Gearhart and his political allies. Part one is Fraud, arson and betrayal. Part two is Gearhart’s control of Atascadero. Pat three is Gearhart’s casino – the final gamble.)

By KAREN VELIE

The political and financial powerbrokers of San Luis Obispo County might never have heard of Kelly Gearhart if he hadn’t decided to take advantage of family members, including his own father, to power his way to the top.

His lust for power was epitomized by what his common-law stepmother of 35 years once said about him:

“I did whatever he asked me to and then he turned on me,” stepmother Marion Warner said about Gearhart’s financial manipulations that eventually cost her home and retirement. “He was the closest thing I ever had to a kid. I never thought he would hurt me.”

Born 50 years ago in Ohio, the controversial former San Luis Obispo County developer is now the subject of a federal organized crime investigation that started after authorities learned that Gearhart had allegedly cheated hundred of seniors out of more than a $100 million, broke numerous laws and betrayed some of those closest to him.

After Warner’s home in Atascadero was foreclosed on, she agreed to several lengthy interviews with CalCoastNews during which she described Gearhart’s rise from a troubled childhood to power through his financial and political connections.

Warner said Kelly Gearhart’s dad, John Gearhart, would get into physical altercations with both his former wife, Barbara, and later herself in front of his sons. His mother, Barbara Gearhart, moved out of the family home when Kelly Gearhart was about 11, divorced John Gearhart in 1974 and now lives in Colorado.

John, Barbara, Kelly, Mike and Doug Gearhart

When Kelly Gearhart was 10, his parents returned to Ohio to attend a funeral. They were walking home from a club loudly arguing when they passed a group of men gathered on a porch.

John Gearhart and some of the men began exchanging words, according to a report in the Akron Beacon Journal. His father, a former professional boxer, went back to the club and returned with a group of friends wanting to fight.

About a dozen people joined in the violent skirmish. Two of the men from the porch were severely beaten and required medical treatment for their injuries, the Akron newspaper reported.

Sean Dawes, 28, took a gun from the house and fired into the crowd, wounding John Gearhart in both legs and the shoulder and Barbara Gearhart in the back, the Journal said. For years, John Gearhart bragged that he had pounded Dawes even after he was shot and would have inflicted more injuries if he hadn’t been wounded, Warner quoted him as saying.

A few years later, John Gearhart opened the Bingo Palace in Coventry, Ohio, according to the Journal. For $100 a night, Gearhart rented the facility to people who claimed the remaining profits were donated to charity.

Eventually, Summit County Common Pleas Judge James V. Barbuto ruled that the games were, in effect, illegal because they constituted a lottery.

Those who have known Kelly Gearhart over the years suggest that his father’s illegal gaming scheme in Ohio has affected his judgment, including coming up with a plan to have the Salinan Indian Tribe recognized by the federal government in order to open a casino that he would have an interest in.

At about the same time, Kelly Gearhart’s brother, Mike, died in a tragic accident during an eight-grade graduation party in 1973 at Lake Nacimiento. The 13-year-old swung out over the lake on a rope, dropped in and didn’t resurface.

Authorities said the boy drowned.

The death of their middle son put the Gearhart family into an emotional turmoil.  The wife moved out to live with a man she worked with at a Thrifty Drug Store and would eventually cut her deceased son’s images out of most of the family’s photos. The boys, Kelly and Doug, remained with their father, who began drinking heavily.

Kelly Gearhart

In July 1977, Kelly Gearhart, then 15, was traveling at a high rate of speed on Traffic Way in Atascadero with a group of friends when he lost control of the car he was driving and was broadsided by another vehicle. Gearhart’s best friend, Raymond Gin, died and four others were injured, according to the San Luis Obispo Telegram-Tribune.

Gearhart suffered internal injuries and was hospitalized. After the accident, he was ostracized by many of his friends while parents of the other friends in the car sued the Gearhart family.

The incident, some say, affected Gearhart, occasionally driving him into bouts of guilt and anger.

The lawsuits cost the Gearhart family their home on Colorado Way in Atascadero. About the same time, his mother divorced his father and she was awarded the family furniture, including the boy’s bedroom sets, as part of the divorce settlement. John Gearhart and son Kelly moved into a small apartment. The other son, Doug, moved to his own place.

It was at about this time that Warner moved in with John Gearhart, a contractor at the time, and Kelly, who she said were sleeping on mattresses on the floor.

In some ways, Kelly Gearhart would follow in his father’s footsteps. After a short stint as a guard at the California Men’s colony, he began working in the construction business. However, while Kelly Gearhart was a heavy gambler, he did not drink alcohol.

In order to move ahead or to reimburse others he owed money to, Gearhart turned on many of those who supported him

In the early 1980s, John Gearhart was working with childhood friend Dan Mackie on a project in Atascadero. That was before son Kelly went to Mackie with claims that his dad’s drinking was causing problems at the work site.

Mackie, who owned a gym in Ventura and did not drink, demoted John Gearhart and placed his non-drinking son as the lead on the site.

“John was really hurt and he never forgave Dan,” Warner said. “Kelly finagled his way in by claiming John drank too much.”

For decades, Mackie was one of Kelly Gearhart’s biggest financial backers and went as far as making him the executor of his will, a mistake that would financially devastate his family.

Dan Mackie died in December 2007.

In 2009, a month before Kelly Gearhart filed for bankruptcy, he transferred a deed that belonged to the Mackie Trust to Sean Freeman without authority to cover a $700,000 debt. In addition, authorities discovered that he did not disclose the transfer to the United States Bankruptcy Court as required by law, according to court records.

Police then evicted Mackie’s widow from her home.

The bankruptcy code says no creditor is entitled to preferential treatment. And, anyone, who gets paid in the 90 days before a bankruptcy is filed, usually has to return the money.

In 2008, following reports by CalCoastNews that Gearhart was in serious financial distress, San Luis Trust Bank placed liens on 13 properties owned jointly by Gearhart, wife Tamara Lowe, Fred Russell and Habib Tavassoli. The properties are in Wadsworth, Ohio.

Russell and Tavassoli are co-owners of a string of bars in San Luis Obispo, including McCarthy’s Irish Pub on Marsh Street.

Then, just 91 days before Gearhart filed for bankruptcy, he transferred 35 properties in Wadsworth with a value of approximately $1.5 million over to Russell, according to federal court records.

In June 2009, the bankruptcy trustees filed a motion to force Russell to transfer the properties back to the Gearhart estate. In interviews, Gearhart said he had transferred the properties to cover debts he owed to the Fred Russell CPA Retirement Trust.

Russell fought the trustees’ motion claiming that he was a hard-money lender in California and that investors, primarily seniors, had invested into the lots. The court accepted Russell’s claim and he was able to keep 33 residential lots and two commercial lots.

Even so, officials from the California Department of Real Estate said that Russell is not a licensed hard money lender.

Warner, Gearhart’s common-law stepmother, said he began wooing the rich and powerful while in his early 20s.

As Kelly’s reputation as a high-profile developer grew, he was able to form beneficial relationships with numerous local and high ranking politicians. Gearhart was touted by several city officials in Atascadero as the city’s hero.

He regularly dined with then state Sen. Able Maldonado (R-Santa Maria), had a direct line to County Tax Assessor Tom Bordonaro and even dined with Republican Gov. Arnold Schwarzenegger of California, sources said.

Warner said Gearhart would ask her to help him funnel money by moving contributions through her checking account to state and local politicians.

She also loaned him about $700,000 —  her entire savings — when Gearhart said he needed the funds to make him appear in good financial shape. He said the monies would be invested into a property and she would receive 10 percent interest on her investment.

In 2009, not long after his father had passed away and following threats from angry investors, Gearhart moved to Wadsworth, Ohio. Before he left, Gearhart asked Warner to meet him at San Luis Trust Bank to sign papers regarding her investment, Warner said.

Marion Warner and John Gearhart

Gearhart and Warner went into San Luis Trust Bank and while Warner thought she was signing documents protecting her investment, she, in fact, was signing several of Gearhart’s outstanding loans, totaling about $559,000, into her name.

Bank officials approved the loans even though the loan application claimed that Warner, unemployed for more than two years, was an employee of a suddenly back-in-business  Gearhart Development.

“Kelly would laugh and say, ‘All I have to do is talk about old cars . . . they will give me anything I want,’ ” Warner said.

“Kelly made fraudulent statements to San Luis Trust Bank. I took $500,000 of Kelly’s debt.”

The bank foreclosed on Warner’s loans and her home earlier this year. She has been forced to sell off personal possession to pay utility bills and other debts.


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98 Comments

  1. SandMan says:

    Looks like KG is suing an appraisal firm for false appraisal of an investment property in Ohio. You think the master would have been smarter…..

    http://www.atascaderonews.com/v2_news_articles.php?heading=0&story_id=3373&page=72

    (12) 12 Total Votes - 12 up - 0 down
    • cheseburger says:

      “The lawsuit also states the plaintiffs invested $25 million, relying on the defendants’ opinion of the value of the property, which included the $1.9 million annual income from the power plant.”

      I wonder if Terry Pippin, Gearhart’s appraiser, not licensed to appraise over $750,000 residential property only, is getting a little nervous yet! Hey Terry want to be a lady deer!

      Gearhart is the worst, he learned from those, he made friends with in the prison!

      (6) 12 Total Votes - 9 up - 3 down
  2. roymann says:

    Gearhart had a successful track record for 20 years. The investors received their 12% monthly and at the conclusion of the project received their principal back. News of such a terrific investment opportunity spread like wild fire. I heard it said on several occasions that there were more people wanting to invest than there were projects available. YES IT SEEMED TO GOOD TO BE TRUE, but when something works for this long it begins to appear bulletproof. In my opinion there was no corruption through most of the history of these transactions. Toward the end VISIONS OF GRANDEUR SET IN. Before it all unraveled nobody else in town had much of a chance Kelly was buying everything the minute it came on the market, I thought he just wanted to control the market, it appears now he needed the money from these new loans to pay investors on previous loans. None of this has been proved yet as no charges have been filled. Probably the most anyone can expect back is there share of the sale of the properties they invested in. In the case of the links golf course for example, 30 million lent on a property that in this market might sell for 2-3 million, less commissions, and the attorney fees, etc your probably looking at 5%-7% return.

    (7) 19 Total Votes - 13 up - 6 down
    • danika says:

      I’m guessing you voted KG “Atascadero Citizen of the Year”. I grew up here, went to school with Kelly and Mike, and knew him for decades. ANYTHING he has touched has stink on it. He was allowed and assisted to do his evil deeds by city officials who now want to distance themselves as far from KG as possible. Perhaps YOU know how this feels…

      (8) 24 Total Votes - 16 up - 8 down
      • roymann says:

        TO DANIKA… No I didn’t vote KG citizen of the year nor do I know how it feels per your above comment. I was not involved in any KG loans, projects, in any way, shape, or form. Involvement or not, everyone lost when all this money disappeared from our local economy. Homes and businesses that might have been built and started are no longer possible. Inheritance…gone, retirement…gone, much pain to go around. THE TRUTH WILL BE KNOWN SOON WHEN CHARGES ARE FILLED AND AGAINST WHOM. Naturally the worst of the bunch have turned on anyone who helped, in a hope to obtain leniency. We should know the whole story within a couple of months. What was it in my above post you found so objectable? No hate, No anger, No bitterness, or all of the above? You say you went to school with KG and everything he touched had stink on it, but you have the bitterness of someone who invested in his projects and lost. Knowing him the way you did, how many people did you convince not to invest in his properties. Seems you could have prevented a lot of pain.

        (12) 16 Total Votes - 14 up - 2 down
        • danika says:

          Wrong. I didn’t invest any money with KG, nor would I have as I did know him. Many of us know the whole story and cannot wait for it all to be told. Your post was worth of my comment.

          (0) 8 Total Votes - 4 up - 4 down
          • roymann says:

            danika, glad to hear you didn’t invest, no doubt none of your family members or close friends did either. Thats a good thing, I didn’t know where the insulting post you directed toward me was coming from. I see this post as an exchange of information and the latest updates on the whole issue. Some people dont want any rationale info they just want to spew hate toward the penguin. This may be understandable, and in some cases is therapeutic. their is no doubt in my mind that somewhere along the line it was obvious their was no getting out of this after which more properties and more investor money was sought. I don’t know when that happened. 4 years ago? 6 years ago? it’s anyone’s guess. I had several friends that were sub-contractors for KG back in the early 90″s he owed all of them several houses worth of pay, and told them he couldn’t pay them until whatever house they worked on sold. They all accepted his offer all were paid when the properties sold and continued to do his work for years afterward. There were several in this mix that also went to school with him. How many years was he actually profitable? Who knows, maybe only in the beginning building a few homes a year… maybe when the real estate market soared to new unbelievable heights and he had a big Inventory… maybe never, my guess is he had years of profitability and let that go to his head. I say few people have that information and none of them are posting here.

            (5) 5 Total Votes - 5 up - 0 down
            • roymann says:

              One thing I didn’t mention in my above post was nearly all the sub-contractors that were loyal to KG for years are now owed large sums, some very large sums of money by him. The numbers are anywhere from $75,000 to $1,000,000 owed to individual sub-contractors and suppliers, Most of these guys ran small to medium size businesses and many went bankrupt, a side of the story we never hear about. Investors typically only invest money they can afford to lose in riskier investments such as these, as advised by all financial advisers, and diversify. There can’t possibly be anyone smart enough to have investment money that hasn’t heard this time and time again, doesn’t excuse dishonesty nor is that what I’m doing. My sympathies especially go out to the hard working contractors he broke.

              (8) 8 Total Votes - 8 up - 0 down
            • Cindy says:

              KG was surely profitable, he traded junk property for prime residential property and high density building with the city of A-Town on several occasions. The city constantly allowed him privelges that were never afforded to other developers, just read the series.

              The word on the street from people who knew him well is that he had a gambling addiction. He frequented Las Vegas on a regular basis. He didn’t think twice about placing 10K bets on a hand. If I had to guess, I would say that a large % of his profits went into the Las Vegas counting rooms. The longer you play, the more you lose and that’s just simple mathematics. The only winners are the ones that can walk away while they are winning and that doesn’t fit the profile of a addict.

              I also suspect that he stashed plenty of his booty away when he decided that it was time to declare bankruptcy or did he really blow 45 million of unaccounted funds in Las Vegas?

              (7) 7 Total Votes - 7 up - 0 down
              • roymann says:

                Cindy, I completely agree with your comments, It’s nice to be able to have a rationale exchange on the subject !! Too many people on this site allow their emotions to distort everything they read…and their anger to distort everything they say. They neither learn nor accomplish anything,

                (7) 7 Total Votes - 7 up - 0 down
              • roymann says:

                Cindy, I completely agree with your comments, It’s nice to be able to have a rationale exchange on the subject !! Too many people on this site allow their emotions to distort everything they read…and their anger to distort everything they say. They neither learn nor accomplish anything, Aside from the reported gambling addiction and I can’t really say how bad it was if at all, (if your making a profit your entitled to spend it any way you choose, that includes gambling) ONE MILLION DOLLARS A MONTH IN INTEREST PAYMENTS can destroy anyone. How many people would have invested knowing how many loans he had and what they were costing each month? My guess is no one would have invested knowing this. How many people would have invested in some of the sub-divisions that were never approved if they were told just how risky the approval process was going to be? My guess again is nobody would have invested.

                (5) 5 Total Votes - 5 up - 0 down
                • cheseburger says:

                  Okay Roymann, you stupidly write,

                  “Cindy, I completely agree with your comments, It’s nice to be able to have a rationale exchange on the subject !! Too many people on this site allow their emotions to distort everything they read…and their anger to distort everything they say. They neither learn nor accomplish anything”

                  First of all when you vent, it makes you feel better second, your post is correct, nobody new what was going on behind closed doors. Second I am holding a default judgment for my entire loss from Gearhart, so I must be an exception to your statement, I guess you didn’t lose one nickle and are smarter and better than the people who did. Shame on you! I wish YOU lost everything too.

                  (-10) 10 Total Votes - 0 up - 10 down
                • roymann says:

                  I certainly Don’t consider myself smarter or better than anyone that lost money in these investments, I’ve lost plenty of money in other investments. Agreeing with Cindy that Kg received preferential treatment that other developers didn’t get, and that there is stashed booty, offended you, surprises me. Stating that no one would have invested had they been told How much interest he was paying a month on his many projects and that some needed risky approval, this offends you also? I understand it make us feel better to vent.

                  (6) 8 Total Votes - 7 up - 1 down
                • roymann says:

                  cheseburger: my comment ” they neither learn nor accomplish anything refers to the fact that making a statement on this blog, that is not hostile venting is often times met with hostile venting. I understand the need to vent when one’s been cheated that is everyone’s right, but there is no need to vent against people that are obviously on the same side as you. Read my posts you’ll understand this.

                  (6) 6 Total Votes - 6 up - 0 down
                • cheseburger says:

                  Roy boy, I like all your posts, I just wish I had been your next door neighbor, like if you knew he was so bad, I sure wish you had gone public!

                  (2) 6 Total Votes - 4 up - 2 down
                • Cindy says:

                  LMAO….LMAO…..Chese you kill me!!
                  I can’t believe that you just said :
                  “Okay Roymann, you stupidly write,“Cindy, I completely agree with your comments, It’s nice to be able to have a rationale exchange on the subject !!”
                  Geeez,zzz Chese, have a holiday cocktail, smoke a joint or just go surfing ;) You know I’ve been on your side since day one and you really are overly sensitive lately. With that said and my chuckles diminishing, I’m sooooooooo happy that you have your default judgment. Will you be participating with the petitioners or does this mean that you get to go ahead of them? Now if we just find where his stash is, I know the FBI has been following the money so hopefully they have figured it out.

                  P.S. You were much more fun when you used to vent about wanting to cut off McCarthy’s head on the white house stairs and watch it roll all the way down. I’ll never forget that one as long as I live. ;)
                  Catch a wave for me……

                  (3) 3 Total Votes - 3 up - 0 down
                • cheseburger says:

                  Thank you Cindy I love all your posts too, the reason I have been uptight lately is a few death threats, also having to punch out the lights of an attacking known drug user, cops and drama, I have to add, not on subject but for once I didn’t go to jail, self defense rule, the idiot did it right in front of my daughter. Diving at me like he thought he was superman! Ka-Pow!
                  Still I would love a legal match against Gearhart, in a cage with a audience of ruthlessly defrauded investors watching! Happy New Year everybody now you know why I have been such a grouch lately!

                  (4) 6 Total Votes - 5 up - 1 down
    • Newsie says:

      Wow, the corruption in this country is astonishing. I just moved here thinking this was heaven, but scratch the surface and BAM the same corruption as back home in LA.

      (10) 10 Total Votes - 10 up - 0 down
    • willie says:

      In a Ponzi triangle
      The earlier or initial investors benefit with a purpose
      They help reinforce the credibility of the top pepeptuate the triangle
      and point in time a larger lower wave are left holding the bag
      Bernie Madoff did inheritly the same thing
      Federal Judge saw through KG fraud in seeking bankrupcy protection.

      I would like to see where $140 million disappeared to, it would illustrate a lot.

      (9) 9 Total Votes - 9 up - 0 down
  3. roymann says:

    I heard (heresay) a few years back that Kelly supported his dad. Did Kelly buy the house Marion Warner lived in ?? Also did the $700,000 she had, as reported in this article, come from Kelly??

    (1) 5 Total Votes - 3 up - 2 down
    • willie says:

      And where did Kelly get all this money from after buying a personal jet aircraft?

      (3) 3 Total Votes - 3 up - 0 down
      • roymann says:

        When the Real Estate market is going through a period of rapid inflation as we’ve seen happen every 10 -15 years, the guy with the biggest inventory does well. You can’t say KG never made any money. I’m aware of several large pieces of property he tied up with long term escrows and resold (flipped) at the close of escrow. Some of those properties he profited 3-400,000. without spending a dime. I think he thought he could do it forever.

        (9) 9 Total Votes - 9 up - 0 down
      • roymann says:

        KG didn’t pay cash for the jet he financed it. IT was then placed with a charter service in SLO to be chartered out to help offset the payments. No idea how well this worked out. But I do know often times Kelley flew in one of the other jets at the Charter Service because his was already being used.

        (3) 3 Total Votes - 3 up - 0 down
  4. WiseGuy says:

    Another wave of “blame the crime victim” is being pushed forward again, as evidenced by comments below. But it is either wrong headed or is strategic propaganda aimed at helping ease the pressure on the CRIMINALS who used ILLEGAL tactics to DEFRAUD people.

    There is a significant difference between making a “risky” investment and being willing to gracefully suffer any bad consequences, versus being CONNED and BETRAYED by a CROOK who spends considerable effort to DECEIVE in ways that is underhanded and ILLEGAL, while pretending to do otherwise.

    Making broad, stereotype generalizations that these VICTIMS are all “dumb” is not accurate and only helps crooks justify their crimes, now and into the future. The “they’re so dumb they deserve to get ripped off” is one of the most despicable, community-degrading attitudes one can have. Unfortunately it is one that is way too common and it nurtures crime, rather than prevents it. It is a classic example of perverse “morality”.

    (13) 15 Total Votes - 14 up - 1 down
  5. centralcoastcoyote says:

    amazing story should have been a book, how about we put in the page that states “about the author”AKA marion warner so many of us can look into the life of the person who is behind the 4 part series… I’d like to believe her but theres just to many odds and ends that makes me think she fabricated some of her story.

    (-2) 18 Total Votes - 8 up - 10 down
    • darwin_is_rolling_over says:

      Thank you ccc.

      It is great how we can use a knuckle head like Kelly to blame ALL of our life failures on. The people who lost money on this idiot’s project didn’t put their money in a bank, they loaned it to hard money lenders. They loaned their “savings” to people who couldn’t go to normal banks and get loans because they were not credit worthy. They loaned it to these lenders out of greed and ignorance. They wanted more interest than the banks were giving and they willfully took a risk. Now … they lose. When reputable banks were throwing out construction loans like candy, Kelly couldn’t get any. There was your first clue “investors”.

      Was Kelly a slime bag, you bet. So why did you give him your money? Why didn’t you ask why he wasn’t borrowing from a real bank? Why didn’t you put your cash in stocks? Bonds? Retirement accounts? Shame on Kelly for preying on the dumb. Shame on the dumb for being …. dumb.

      (0) 30 Total Votes - 15 up - 15 down
      • centralcoastcoyote says:

        Very well said darwin, I dont know anyone who puts all their money in the stock market so why is it ok to put all your life savings in construction? We all know when things seem “to good to be true” and at 10% coming in on your investment each month it was. All good things have to come to an end sometime and this one did. I believe kelly got to big to fast and should have backed off before it all had to come to this so there wouldnt have been so many people affected by it.

        (7) 19 Total Votes - 13 up - 6 down
        • willie says:

          Your analogy is fallacious and superficial, it lacks insight!

          (-4) 10 Total Votes - 3 up - 7 down
      • willie says:

        darwin
        Thus far, you are the best big headed (FOS) monday morning quarterback I have seen and a little off base on “how” 1200 people got scammed (some are dead).
        Go change your name and start over

        (-3) 13 Total Votes - 5 up - 8 down
        • darwin_is_rolling_over says:

          So now you are inferring KG killed people?

          There are scams and then there are scams. Kelly didnt take these peoples credit cards. He didn’t get their PIN numbers and rob their accounts. He borrowed money. He got in over his head. He used it incorrectly. He lost it all. And yes, he broke laws doing it. The whole time 1200 people watched it happen. 1200 people does not surprise me at all, that is actually not a large percentage of the population. Some of those people were in for $100 others for $700k.

          As far as being off base … I am in the industry and I can say that NO reputable financial advisor would have steered anyone to Hearst, Estate or any of the hard money lenders. It is the responsibility of the investor to look into the investment. It would not have taken much for an investor to get an uneasy feeling about Kelly if they met him.

          Another thing to think about, I know people who lost as much in the stock market as Kelly’s investors did … but they dont have a Kelly to target. They just have to dust themselves off and move on.

          (10) 16 Total Votes - 13 up - 3 down
          • willie says:

            “So now you are inferring KG killed people?”

            Some passed away from illness.

            “So now you are inferring KG killed people?”

            Now that you mentioned it, yes … in more ways than one, in many ways…

            (-4) 10 Total Votes - 3 up - 7 down
      • danika says:

        He was “Citizen of the Year”. The Golden Boy who had the Midas touch. Why would you the innocent not trust him with that glowing resume? Heritage Oaks is a “real bank”. Many millions of people lost their retirements from “investing” in those very markets you shine so favorably. Speaking of dumb…did you look in the mirror before posting this?

        (1) 13 Total Votes - 7 up - 6 down
        • darwin_is_rolling_over says:

          Thank you for helping me make my point, actually.

          Heritage Oaks, Los Padres … reputable banks lost money, not just crooks like Kelly. So where are the articles calling for the criminal prosecution of Heritage Oaks? Or B of A? Perhaps there is no safe investment right now. When you make an investment there is risk.

          Also, you say you grew up with Kelly … again thank you for helping make my point. If you knew everything he touched had stink on it … why would you touch it?

          When reputable financial institutions are not lending guys like Kelly money, there is a reason. When those same banks are having trouble …. of course the hard money lenders will too, their clients have bad credit!

          In my opinion investing money with a guy that cant get a regular loan for himself is risky at best and dumb at the worst. Hey, I have an idea … I am going to invest my WHOLE life savings in (a) one place (b) with a guy that has crappy credit and (c) on projects that I have not properly done due diligence on. That to me, is dumb.

          Just because you dont like someone elses opinion … does not equal dumb.

          (13) 17 Total Votes - 15 up - 2 down
          • danika says:

            I find it interesting you assume I invested. I did not. Dumb is as dumb does.

            (-5) 7 Total Votes - 1 up - 6 down
  6. darwin_is_rolling_over says:

    The sad fact is that those who lost money via KG projects will probably never see a penny back, but it wasn’t just KG. He is the local guy. The big fish in a small pond. There are developers all over the whole state and country that have screwed their investors, contractors and consultants.

    I have questions. When can we start focusing on something positive, like how to finish projects and how to develop properly? KG’s victims have to move on because there is no other choice. And why just KG?

    What about John King? What about the hundreds if not thousands of county residents has has hurt by never paying his bills? He did the same thing KG did, he over-drew construction loans, cross leveraged projects and failed to pay his contractor and consultants. Where is the fire over John? He even persists to keep his fingers in projects he lost to the bank like price canyon.

    KG is the past, we need to look out for the KG’s of the future but figure out how to get people back to work.

    Men build. It is what we do. It is what we have been doing for thousands of years. Lets get past this and get back to work.

    (6) 22 Total Votes - 14 up - 8 down
    • darwin_is_rolling_over says:

      By the way …… there are those who have made a nice living from KG as well. Like Karen.

      (-12) 28 Total Votes - 8 up - 20 down
      • willie says:

        “By the way …… there are those who have made a nice living from KG as well. Like Karen.”

        I really really and truely really want to know HOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

        (8) 12 Total Votes - 10 up - 2 down
        • darwin_is_rolling_over says:

          Just saying …. without two-bit trash like Kelly, or like Ron from the City of SLO, or like Tom the Taxer, Karen would have to find a new line of work, maybe reporting on things like …. I dont know … the Korean conflict or politics or something.

          One thing is for sure, positive news doesnt draw sponsors so you hardly ever see it here! The only things that the CCN staff write are negative pieces. Anything that is not a negative piece on this site is just copied from other sites. Just my observations as I check this and 5 other news sites daily to try to keep a balance of local, national and world news as well as good and bad news as well as liberal and conservative news.

          And so I say, Karen should thank the trash of the world for paying her mortgage via her line of work.

          (-17) 29 Total Votes - 6 up - 23 down
          • danika says:

            Karen, please thank DIRO for honoring us with his opinion. I would rather sponsor Karen’s site than the “OTHER” local newspaper that is totally biased in its opinion and so far left it can’t hope for “balanced” news reporting in this century…CCN reports what we all NEED to know. It is what it is…a good source of what is truly going on in this county without all the sugar-coating and fanny smoochin.

            (9) 11 Total Votes - 10 up - 1 down
          • willie says:

            Darwin
            Really, that’s a blow of ignorance.
            Cuesta College school of business has advisors who told can tell you the cost of advertisement on TV and radio. You pay very little for a lot of simple advertisement and CCN is only a mere community website.
            CCN is not a gold mine.
            More so CCN is a group of new breed individuals pursuing their gifts and passion.
            There are zillions of other site, find one you like and go there.
            Otherwise, you can contact CCN if you have a community (our community) concern or interest and you can have at it with all of us.
            One thing I am hoping is that more political officials participate in this site, it makes a difference not only to me but to them as well.

            (2) 2 Total Votes - 2 up - 0 down
          • willie says:

            You talk more “as if” you are KG or his advisors more than a financial advisor or someone in the field.
            Placing onous on burnt investors saying that should have, could have, would have on info thats out of their reach until its too late is monday morning quarterback of an amatuer or someone ignorant.
            And suggesting CCN is profiteering like a gold mine because of this important saga to the community all makes me (or anyone) think you are associated with KG (Its okay, this is a community blog-your welcome).
            I am in strong belief that KG more recently in time (NOT 20 years) intended a Ponzi and intended a bankrupcy protection for his retirement.
            I am bullish on the FBI making an arrest mainly so they can do the paper trail and seize hidden monetary assets to ease collection (that which he was trying to protect on a botched bankrupcy proceeding).
            and to spare surviving investors from KG’s attorney from bamboozing them in believing that he has nothing so they would go away.
            I encourage all surviving investors to seek and hold a judgement and renew in the future judgement till death do it part.
            Basically he needs to dig it up or spend more time in prison (as in Bernie Madoff’s plea bargain case) he will wear the shoes of those he made homeless.
            So KG as far as I am concern needs to dig it up, earn it or let life insurance pay back.
            For you who SOOOOOOO sympathetic with KG, help him out, give him money or a job, but don’t tell or con the investors to go away and forget it till its over, it ain’t the time yet!

            (2) 2 Total Votes - 2 up - 0 down
            • darwin_is_rolling_over says:

              I am actually a consultant that could have worked for Kelly, but never did because I knew his reputation. For well over ten years it was widely known that only those who do questionable business work with KG. No one wins with him except KG.

              I made a conscious business decision to stay away from him, probably denying my firm some profits, but good sense must prevail over greed.

              With regard to CCN and their balance … It seems to me that many of the original pieces on this site have a tinge of vengeance to them, much different than factual news reporting. Secondly, if want expert advise on anything, Cuesta certainly does not come to mind. Obviously the site is keeping groceries in the pantry for her. Perhaps the Trib is too conservative and New Times is too lib, but the thing they have in common is substantial fact checking. Their business depends on it. They have overhead, employees and reputations. I feel like CCN can throw out what ever they hear as “news” and what harm can happen?

              Oh, thats right, Karen can get sued and Dave can ask everyone for hand outs to get her out of the jam. It is entertaining, I will give it that, but also like a train wreck. Horrible but we cant stop watching.

              (1) 9 Total Votes - 5 up - 4 down
    • willie says:

      Does that include buying a jet aircraft with investors money?

      (6) 8 Total Votes - 7 up - 1 down
      • roymann says:

        Buying a jet aircraft with investors money was blind arrogance and stupidity. The word sociopath comes to mind.

        (9) 11 Total Votes - 10 up - 1 down
    • TacomaRose says:

      Oh please !!! What is with these comments Darwin-?

      “When can we start focusing on something positive …”

      “KG’s victims have to move on because there is no other choice.”

      “Lets get past this and get back to work”

      You mimic Tom O’Malley’s crap about being proactive and positive, all the while his hand was in Gearharts wallet (so says Gearharts step mom)

      I’m all for getting past this but we all want the wicked jerks to get tossed in the can … for life !!!!

      (10) 10 Total Votes - 10 up - 0 down
      • darwin_is_rolling_over says:

        Much of what was reported in these KG articles is what a court would call “hear say”. There is a huge difference between fact and rumor. That doesn’t mean Kelly is not a jerk, but it also does not mean that all of the rumors are true. These articles walk a fine line between fact and slander. For instance the fire in Ohio, what solid proof is there that Kelly had anything to do with it? But, if you carefully pick your words …. you can still publish it. When people want to believe something they can work very hard to justify their positions. Kelly’s step mom is rightfully upset and can say a lot of things because … who is going to prove her wrong? That doesn’t mean its true or worthy of print. Where is the solid verification of fact? And Karen wonders why she is being sued.

        Let me ask you this, do you know Tom Omaley personally? What gives you the right to slander him? What have you done to get involved with the town of Atascadero? What offices have you run for? I don’t know if what you say is true or not. I am certain you believe it is though, and that is exactly my point. When you believe something, you will only try to find the “facts” that justify or support your belief.

        So I say again, in the spirit of the holidays and trying to be better people, how can we make a positive situation out of the mess that was left behind. How do we pick up the pieces. Grudges wont help. Moving on will.

        (-1) 17 Total Votes - 8 up - 9 down
        • Cindy says:

          The majority is not hear say. Karen went out and confirmed the information through additional sources. Yes Warner said Gearhart had his apartment arsoned and it can’t be proven if he did or didn’t but Karen proved every aspect of Warner’s story and it clearly points to Gearhart and no one else. People have been convicted on less circumstantial evidence.
          Bordonaro claims he never had dinner with the Governor or had a picture taken but his staff claim otherwise claiming that they have seen the photo. Very little of this story stands on Warners word alone.

          (3) 7 Total Votes - 5 up - 2 down
    • WiseGuy says:

      Men build, you say? Well, they destroy too. And lie. As YOU might say: It’s what they do. It is what they have been doing for thousands of years.

      Some men CLAIM they build and CLAIM they are telling the truth, when in fact they are lying and destroying. Sometimes it takes a while until that becomes obvious to everyone.

      Kelly Gearhart is NOT “in the past”. The disease that spawned any fraud is still flowing with contagious force in this county at this very moment. We have not eradicated it.

      You want us to “get back to work” you say? Well, let me tell you, eradicating disease IS work. And, Darwin, I’m not sure how much of THAT kind of work YOU are truly helping with. As “tough” as you try to sound, you seem to be making more EXCUSES for criminal behavior while disrespecting crime victims.

      (5) 7 Total Votes - 6 up - 1 down
      • centralcoastcoyote says:

        And we all wonder why it has been 3 years of this…..

        (-3) 3 Total Votes - 0 up - 3 down
        • darwin_is_rolling_over says:

          Indeed. And we are no where near the end. While the NIMBY’s move into the county and preach to us about how things should be (even though they moved here to get away from the way things were), they kill our industries and displace our hardworking residents and families.

          I make no excuses for KG or his behavior, nor do I make excuses for the investors. Guess what, I didnt lose money with KG. Why? Because I knew better. Also, I would not put all my eggs in one basket.

          There is no such thing as survival of the fittest any more, because we protect the weak of the herd to the point that injure our own welfare.

          KG was a cancer, agreed, but so is the toxic attitude of real excuse makers and blame handers.

          (2) 8 Total Votes - 5 up - 3 down
  7. roymann says:

    Loaning Gearhart money, even near the move to Ohio had nothing to do with compassion, generosity, or the desire to help a local boy, it simply had become good business. All one had to do was leave the money invested for 6-7 years and it DOUBLED. Gearhart had made a lot of money for himself and his investors over the years. I would say it was not common knowledge he was moving to Ohio. I heard more than one Investor say they’ll only put money in Gearhart loans. It only takes a couple of large projects to not go as planned when you’re monthly interest payment is 1 million dollars (ONE MILLION PER MONTH IN INTEREST) and the downhill slide begins. Add to this the crashing Real Estate market…add to this the notion if we can just find ways to keep up the interest payments up and not cause a panic within the pool of investors, we can get the Casino on line. That’s how I see the whole thing going down.

    (2) 12 Total Votes - 7 up - 5 down
  8. DashRiprock says:

    No question bordanoro is dirty, everone knows that, however, the board of directors at san luis trust bank are the scum of the earth, they should all be hung up by their balls, (if they had a pair) at town square,…they gave squat body kelly anything he wanted, hoping they might get a small piece of the pie….most on the board are sleazy slo lawyers

    (7) 7 Total Votes - 7 up - 0 down
    • zaphod says:

      “Come and get one in the yarbles, if ya have any yarble, ya eunuch jelly thou!”

      (-3) 3 Total Votes - 0 up - 3 down
      • willie says:

        You been drinking?

        (1) 5 Total Votes - 3 up - 2 down
        • zaphod says:

          Alex “One thing I could never stand was to see a filthy, dirty old drunkie, howling away at the filthy songs of his fathers and going blurp blurp in between as it might be a filthy old orchestra in his stinking, rotten guts. I could never stand to see anyone like that, whatever his age might be, but more especially when he was real old like this one was”

          (-2) 2 Total Votes - 0 up - 2 down

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