Gearhart appraiser loses license over land fraud

January 5, 2012

Kelly Gearhart and James Miller


EDITORS NOTE: See Conflicting appraisals, a comparison of appraisals made by Terry Pippin and Market Dynamics’ Dennis Greene, an appraiser hired by Heritage Oaks Bank, at the bottom of this story.

An Atascadero-based appraiser whose inflated appraisals helped North County Developer Kelly Gearhart defraud investors out of more than $100 million has lost his license. The California Attorney General’s office ordered Terry Pippin to surrender his license in December.

Pippin made false statements in appraisals that helped Gearhart, James Hurst Miller and others get financing that was used to carry out the fraud, Attorney General Kamala D. Harris said in her December order of license surrender. The story of the fraud, which affected some 1,200 investors, was first reported by CalCoastNews in 2008. Harris issued her order after the California Office of Real Estate Appraisers submitted an accusation that detailed Pippin’s conduct in a number of transactions.

At the time, Pippin said he stood by the numbers he put into his appraisals saying they were both accurate and legal.

“I do know what I am doing. I have been doing this for 18 years,” Pippin said in his 2008 interview.

In August, the U.S. Attorney’s Office in Los Angeles charged Miller, the former head of Hurst Financial, with defrauding investors. Miller fraudulently sought money from investors for the Beacon Road and Vista del Hombre real estate developments in Paso Robles as well as the Salinas River development project in Templeton, the U.S. Attorney’s Office alleged.

Miller was charged with mail fraud, wire fraud, money laundering, making a false statement to a bank and aiding and abetting Gearhart in making other false statements in seeking funding. The $100 million fraud was uncovered by CalCoastNews in 2008.

The CalCoastNews investigation found that Miller and Gearhart allegedly swindled the investors in a lending scheme involving hard money with the assistance of title officers, lawyers, public officials and appraiser Terry Pippin.

Pippin appraised the Vista del Hombre project in 2007 for $17.75 million, California state investigators said. The project lies six miles east of downtown Paso Robles and is on the site of The Links Golf Course, a flat, dust-blown, treeless expanse of land just a stone’s throw from the airport. The project envisioned the construction of 32 commercial and residential buildings on the property.

Pippin’s appraisal failed to report that the development was part of the golf course or that persons trying to get access to the development site would have to pass between two already existing golf holes.

Gearhart used Pippin’s appraisal to get a loan in 2006 from Hurst Financial for $15 million. Gearhart used that first loan to buy Vista del Hombre and for initial infrastructure construction. Miller got the money from investors who were lured by promises of high interest returns and reassured by Miller’s claim that the property’s loan to value ratio was only 44 percent. Those claims were included in loan agreement documents.

That hard money loan (a loan based on the land value rather than the developer’s credit rating) could fund no more than 44 percent of the project’s total value. That initial loan was slated to mature in late 2006, but Miller has not repaid investors and stopped making interest payments.

By 2007, Miller had lent Gearhart another $11.85 million for the Vista del Hombre development. That pact was signed on June 22, 2007, after Miller attracted more than 100 investors with the same loan-to-value promise.

Pippin appraised the property again in 2008.

“My opinion is it is worth around $100 million finished,” Pippin told CalCoastNews in 2008.

That figure is more than four times higher than what other licensed appraisers estimated its projected value to be.

Heritage Oaks Bank conducted its own appraisal of Vista del Hombre in 2008. Gearhart had sought a loan from the bank on the property. Using the services of Cuesta Title, Miller and Gearhart claimed that the property had a clean title with no existing loans, according to bank documents.

Vista del Hombre was worth about $4.3 million as it was in January 2008, the bank appraisal said. The property would increase in value if “an extraordinary assumption” is made that Gearhart would ever complete the 32 commercial and residential buildings as proposed. In that instance, according to the bank’s appraisal, the estimated value would rise to $21.8 million.

Also under scrutiny is Pippin’s appraisal of a proposed residential development in Atascadero dubbed the Triangle Property. State investigators said that Pippin falsely reported that the property was part of a 15-unit tentative map when no such map had been submitted to the planning department, falsely reported who the owner of the property was and failed to report former property transfers.

One of the more egregious appraisals Pippin created was used to get investors to fund a proposed 58-unit residential development in Templeton known as the Salinas River Property. In that case, Pippin failed to report that the property could not be utilized for the proposed development because portions of the proposed development were to be located in the Salinas River bed or in a flood zone.

In his appraisal of the Eagle Ranch development in Atascadero, Pippin reported the existence of a home that was not there and said that the property was zoned for residential development.

“Respondent produced an appraisal that lacked sufficient credible information and analysis to be used for any legitimate purpose,” the Office of Real Estate Appraisers accusation says.

In his report, Bruce Crandall, an investigator with the Office of Real Estate Appraisers (ORES), also noted that Pippin “failed to cooperate with the investigation.”

Crandall asked the state to suspend Pippin’s license, to enact fines and to “take further action as deemed necessary and proper.”

In response to Crandall’s request, the state ordered Pippin to surrender his license by Dec. 12 for a minimum of two years and to pay $15,000 for enforcement costs.  Pippin agreed not to contest the allegations.

Yesenia Rocha, Office of Real Estate Appraisers legal secretary, said further information on possible legal action to be taken against Pippin is confidential.



Conflicting Vista del Hombre appraisals  
Appraiser Pre-development
Finished development
Terry Pippin $17.8 million $100 million
Heritage Oaks Bank $4.3 million $21.8 million



  1. cheseburger says:

    500 plus comments on the Paso chiefs sexually ativities, and 60 here, seems sex gets all the press.

    (2) 2 Total Votes - 2 up - 0 down
  2. obispan says:

    Everything was just fine; Gearhart, Wall Street, wars in the Middle East planned out a decade in advance… until the anti-capitalist Obama Democrats deliberately sabotaged our BIble-believing service-sector-only economy. Oh yes, he hates America, Rush says so everyday.

    (-8) 10 Total Votes - 1 up - 9 down
    • cheseburger says:

      Obispan, Mahogany rush is the only rush for me you my friend are a fool!

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

    “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”

    Ha, call me psychic I just pasted this from a really old blog I wrote, I knew he wouldn’t get away with it, but a slap on the wrist or probation is all he will get also.

    I wonder how much Gearhart payed him?

    (15) 19 Total Votes - 17 up - 2 down
    • cheseburger says:

      Oh “lady deer” meaning a (doe 1-100) in my lawsuit , cheers Terry, see you in court.

      (12) 16 Total Votes - 14 up - 2 down
  4. oto says:

    To Harlow: Your question suggests that there is more than one way to legally appraise a piece of property, even before the structures are built. That appears to be Pippin’s defense, at any rate. You said:

    Hello???? How does one appraise a property for a value with buildings NOT built yet???

    Did you notice how all the REAL ESTATE AGENT bloggers are noticeably absent from these discussions? I think they’re in hiding. That is because they are required by the terms of their license to know the answer. Thus, when they represent a piece of property to a bank as having been appraised at a certain value, they know exactly what its worth, and they know exactly whether or not the appraiser is being accurate.

    Nonjudgmental gave one simple and accurate way of arriving at the value of a piece of property.

    (11) 15 Total Votes - 13 up - 2 down
    • Harlow says:

      If one can LEGALLY appraise a piece of dirt as if it had condos on it and can do this w/o a proper license and it can be taxed as if it were completed………….the LAW needs to be rewritten!!!

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

        Hmmmm…..You’re going to make me do homework, aren’t you…..IS THERE A REALTOR IN THE HOUSE?!…IS THERE AN APPRAISER OUT THERE WHO COULD WEIGH IN ON THIS ISSUE?! I could use some help here…..

        Meanwhile, while we’re letting that roaring silence roll by us,….MITT ROMNEY just won the Republic Primary in New Hampshire, Paul is coming up in second place, and John Huntsman is doing better than expected in third place, as of 6:00PM PST on 01/12/12.

        Instead of cracking my pretty darn good real estate textbook, Dearborne’s “California Real Estate Principles,” and opt out to go for an hour’s worth of counseling from Dr. Woof Dog on the political and cultural effects of a potential Mormon President on women’s rights.

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

          Woops. Last sentence should read: I’m going to opt out, to go for an hour’s worth of counseling from Dr. Woof Dog….etc., etc.

          (1) 5 Total Votes - 3 up - 2 down
    • RU4Real says:

      It’s good this guy lost his license, hopefully there will be a few more coming. In addition, I have never seen such horrible real estate agents & brokers as I have seen here in SLO County. More clients should lodge complaints against them & maybe it would weed out some of the corrupt individuals. Corruption isn’t only found in SLO County Government…It’s all over SLO County! How can this be the “HAPPIEST PLACE” in the country with all the corruption around us???

      (11) 13 Total Votes - 12 up - 1 down
  5. Nancimeek says:

    Karen? In one of the Dumpster chronicles articles you posted that ” Paul Ketchum, an official with the Office of Real Estate Appraisers Enforcement Division, disagreed with Pippin’s assertions that he does not have to follow usual guidelines when making hard money lending appraisals” so where is Paul Ketchum in all of this?

    (9) 13 Total Votes - 11 up - 2 down
  6. R.Hodin says:

    From the article, is not the possibility of the U.S. Attorney’s office filing future indictments for fraud or conspiracy against Pippin still left open?

    A rotten apple doesn’t fall far from the tree.
    (sorry, just had to . . .)

    (16) 18 Total Votes - 17 up - 1 down
    • cheseburger says:

      “Pippin’s appraisal failed to report that the development was part of the golf course or that persons trying to get access to the development site would have to pass between two already existing golf holes.”

      Well the hole this A-hole should really be in, is about six feet deep.

      Without his help, Gearhart and Miller could not of left many wet naked and draped over a chair!.

      (18) 28 Total Votes - 23 up - 5 down
    • Nancimeek says:

      The indictments are likely forthcoming. No doubt Jay Miller has “Named Names”.

      I spoke with the accounting firm in Ventura last summer who took over the accounting related to the Gearhart investigations in Ohio. While they couldn’t divulge information re Gearhart or Pippin, they did say they were auditing several related accountings including the accountings mentioned here. While we were litigating our father’s probate case in Hawaii last year, I questioned Jones while he was on the witness stand. Attorney Grigger Jones stated he primarily works as an attorney for clients involved in real estate transactions. This is documented. Less than a month after our father passed away in 2003 Jones was enlisting appraisers in San Bernardino County and Arkansas to prepare reports undervaluing our father’s properties. By undervaluing the properties Jones managed to reflect our father’s estate was not worth $4.2 million but a mere $2.8 million. He did this we suspect because by having an estate worth less than $3 million the taxes owed would be ZERO. Jones also (via the 1st Amendment with the admitted forged signatures) created a $1 million “Exemption Trust” (which was never funded by the way) to reduce the taxable estate amount even further. Jones denied being the “go to” person during the Arkansas transactions but I have documents with his name and Morro Road address as the contact person and witnesses in Arkansas who were contacted by Jones who represented himself as our father’s “brother”. We asked for an accounting from Jones for years and all he gave us was a piece of paper with each property and an amount. No actual appraisal reports probably because he didn’t want us to contact anyone. Jones submitted this crude appraisal to Judge Tangeman in SLO court. And conveniently a month later (July of 2005) the case was moved to Hawaii (probably because Jones realized we weren’t’ going away and his neck was on the chopping block). Point being, while Mr. Pippin was inflating the prices of the properties in Central California, Jones through his appraisers were underflating prices on our father’s estate. Gearhart and Jones are “thick as Thieves” according to Gearhart’s former secretary and others I have spoke with. Did Mr. Pippin work side by side with Jones on any of these transactions? Who was the attorney of record? You can call me at (760) 413-5660
      Letter to Accountant Michael Gould asking for clarification (Mr. Gould refused the letter) is on at

      (13) 15 Total Votes - 14 up - 1 down
      • slowtime says:

        I hear Grigger has recently “retired.” On the run is my guess. I first met this clown in Paso Court when he was trying to appear for a client in small claims court. What a baffoon. Attorneys are not allowed in small claims, and he was promptly chastised and told to leave by the Judge. I sure hope the door is closing on Jones and Gearhart soon.

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

          I am not surprised. he never contacted me or my brother to tell us he was selling properties. Our stepmother didn;t call us to tell us our father was dying and terminal. She kept all of dad’s friends and family members in the dark. But she consistently communicated with Jones before and right after Dad died. I called Jones at home a few years ago and his wife Alice started screaming at me telling me I was a mental case etc. And I was as calm as could be. I still cannot believe the way this man treated our family during the probate process. My only satisfaction is knowing he will never be able to do to others what he did to our family. The forgery, selling property that didn’t belong to the trust, garnering a judgment against the estate when he sold the Arkansas property for over $300,000. Both times I filed a claim with the Cal Bar I was told they couldn’t do anything because we hadn’t retained him. He went from being the attorney hired by our stepmother for the probate to just being HER attorney in a matter of months. I hope he is retired. He certainly won’t get a client since most people are smart enough to check out an attorney BEFORE he is hired. Good riddance! And he appeared in a small claims matter? What a doufuss!

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

          Doesn’t surprise me one bit, in my opinion one crooked. forked toughed Pro-tem Judge in small claims he was in the smalls claims division. I sue for Five thousand, win and he awards me $250.00, Christensen vs. Donati 1997, nobody wants to see that, but it is true.
          Some body with access could have a field day.

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

            Oh people have access but don’t be surprised if you go to court and a file is “missing” This happened to us in September of 2005 we had a court appearance (we still had not been told the case was being moved to Hawaii) and had to come back the following week because the courts in SLO couldn’t locate the file…………… wasn’t in the clerks office and it wasn’t in the Judge’s chambers,. Judge Tangeman didn’t have it and mysteriously JONES had filed his answer and indicated he would not be available as he had ANOTHER court appearance that day. Tell me that wasn’t strange?

            Your file may have disappeared too or at the very least if someone looks for it, you may have a hard time finding it.

            (0) 6 Total Votes - 3 up - 3 down

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