Court bars Gearhart tax sale
July 3, 2012
An Ohio court barred the San Luis Obispo County tax collector from selling former North County developer Kelly Gearhart’s properties at auction during a hearing on Monday.
As of June 6, Gearhart, his wife Tamara Gearhart, and several of their subsidiaries owed SLO County $537,987 in property taxes, fees and penalties.
In her ruling, Judge Marilyn Shea Stonum noted that San Luis Obispo County Tax Collector Frank Freitas had previously been given a notice by the Ohio court and did not respond in time to challenge the stay.
In early June, the SLO County tax collector’s office send out an renouncement that several of the Gearharts’ tax-defaulted properties were to be sold at auction on July 1. A few days later, an Ohio court trustee filed a motion to stop the proposed sales.
The Gearharts moved to Wadsworth, Ohio in 2008 after being accused of helping to defraud more than 1,200 investors of more than $100 million in an alleged Ponzi scheme. An FBI investigation into the alleged fraud has been ongoing.
In February 2009, the Gearharts filed personal bankruptcy in Ohio claiming $6.5 million in estimated assets and $45.1 million in estimated debts. The bankruptcy court has a tentative settlement in place and plans to use proceeds from the property sales to pay taxes as well as the Gearharts’ creditors.