Heritage Oaks Bank settles with Gearhart investors

July 30, 2013
Kelly Gearhart

Kelly Gearhart


In a last minute decision, Heritage Oaks Bank agreed to settle with investors in Hurst Financial’s Vista del Hombre project in Paso Robles for a currently undisclosed amount of money, an investor said.

The settlement was agreed to two weeks after San Luis Obispo County Superior Court Judge Charles Crandall noted in a ruling that the bank was aware of former North County developer Kelly Gearhart’s wrongdoings.

“The matter has been resolved to the satisfaction of plaintiffs and the board,” Steven Sanchez, the plaintiff’s attorney, said. “We thank the bank for the professional way they approached the resolution.”

In 2009, more than 300 investors filed a lawsuit alleging Stewart Title, Cuesta Title and Heritage Oaks Bank aided and abetted and/or conspired with Hurst Financial and Gearhart in defrauding hundreds of seniors through illegal investment schemes.

The plaintiff’s attorneys, San Diego based attorneys Sanchez and David Noonan, of the law firm of Kirby Noonan Lance and Hodge, accused Heritage Oaks Bank officials of being aware of the Gearhart/Hurst scheme when they approved a $1.5 million loan which permitted the bank to obtain a priority secured interest in the Vista Del Hombre project, effectively wiping out the investors’ encumbrances.

Jay Miller, president of Hurst Financial, filed documents through Cuesta Title that loans on projects had been repaid to the investors even though they had not. With a clear title, Miller would then put a second and sometimes a third loan funded by investors on the same property.

Gearhart got his first loan for the Vista del Hombre’s purchase and initial infrastructure construction in May 2006 from Hurst Financial, in the amount of $15 million. Miller had secured that money from private investors lured by promises of high interest returns.

The initial loan was slated to mature in late 2006, but Hurst has not reimbursed investors and ceased providing interest payments.

But by then, Hurst had already lent Gearhart another $11,850,000 for the Vista del Hombre development – raising Gearhart’s annual interest payments to $4 million. That pact was signed on June 22, 2007, after Hurst attracted more than 100 investors.

Those investors received interest payments for only six months before the payments abruptly ceased. Gearhart then applied and received several loans from Heritage Oaks Bank on the same property.

Federal charges allege that Miller aided and abetted false statements for Gearhart to Heritage Oaks Bank relating to collateral for a loan application on Vista del Hombre.

The civil trial slated to start Monday was continued to August 5 after Heritage Oaks Bank officials agreed to settle.



The civil trial involving Kelly Gearhart will be televised to a select group of attorneys and law students



REALLY?!! Are you kidding me already? Does anyone else smell a big fat rat?! WHY is this case being treated so carefully and secretively? Why so unique? A jury is “being selected”….hmm…it will be interesting to see if the names are given out and if anyone is anyone anyone knows! And only ‘select’ “attorneys and law students” get to watch this trial that has affected SO many lives for so many years? I don’t believe one single word of this. I do believe there’s some one “up high” that they are trying to protect. There is dirt on someone important and they don’t dare let it be revealed. Why else would they be hiding so much? They took Karen Guth down over night and into the slammer she went. Done deal. But Kelly and Jay? White Kid Gloves. Here’s my bet: Kelly and Jay will be charged with money laundring and fraud on a couple counts, given a couple years in jail which they may or may not actually serve, the banks will take a little bit of a hit that will mainly go to pay the lawyers, and then that’s the end of it. No more information, case closed. Such BS.


This is a civil trial against Cuesta/Smith Title and their involvement in a fraud. It is not a criminal trial, that comes in November for Gearhart. None to soon for sure!


correction….Stewart Title not “Smith”….


The victims should be reimbursed as well as compensated per yearly calculation what their losses have been, how much interest they could have made had they had access to this money etc.

The FBI and local IRS are certainly under the microscope. Not to worry. Federal case coming up in November with Gearhart and Miller and what attention I could bring to the right sources has been completed . There will be justice and those who are supposed to be working on OUR behalf are also under the microscope. Amazing how easy it is for some to look away during this process of investigation. I was floored to learn just how much transparency there is within the IRS as well as the FBI. Sadly there will be some who will lose their jobs because of the look away attitude in the Santa Maria to Atascadero areas.

Better “Homestead your house”………. Robert “Grigger” Jones.


So I’m I to assume that Heritage Oaks Bank’s insurance pays out the settlement? Whatever mysterious amount that number will be? The increased insurance premiums that will now be imposed on the bank because of this settlement will be reimbursed by greater fees imposed on members I would imagine. This is a miscarriage of justice, there needs to be jail time for each name that authorized any portion of these miss deeds…PERIOD.


Insurance does not pay out for intentional acts.


Danika, good info however are you sure the insurance doesn’t pay when there is no official ruling or judgment imposed stating that intentional acts occurred because a settlement has been reached?


WHY is Kelly Gearhart NOT in prison ?

Hard rock, back to the wall.

oh yeah… He’s a CONSERVATIVE. so it’s excusable.

Yeah, phhhttt !


Oh BOOHOOO! 22 negs , and not a reply.

I DARE YOU, you supposedly ‘conservative’ douchewads …..to defend yourself, and deny that Kelly Gearhart is a confessed ‘conservative’ and an undeniable crook.

The most of you right-wingers are even more cowardly than ‘kumbaya’ liberals that have no backbone.

They’re spineless, but they only flash ‘peace’ signs.

You cowards point your fingers like guns and act like John Wayne ! Just pitiful !


Slowerfaster, you DO have a “point”. But you have to be careful how you state it or you just come across as a crazy person. Yes, Gearhart is a “conservative”. But who cares? There are alot of Conservatives here who are very honest and would love to see Gearhart pay for his crimes. You come across as a crazy person with all your name calling. I had HEARD, that many years ago, when Gearhart and Miller were running rampant, that they had connections that went “ALL the way to the top”. George Bush was Pres. then, and was ready to sign off on an illegal Indian gambling casino for Gearhart. Gearhart and Miller might not be personal friends with George Bush, but they probably have “friends in high places” who have been trying to cover for them. I personally suspect that Gearhart and Miller have some “dirt” on someone “high up” and that’s one of the reasons this has dragged on for so long. It’s probably some pretty bad “dirt” and they are struggling to buy each other out. Miller and Gearhart will probably have to do some sort of “time”, just to get us to shut up and go away. But I will bet they will be quickly and quietly released behind our backs. Possibly they will uh…”die” while in jail….and then slip away to the Bahamas!


I am sorry, but the dirt goes up and down all the roads. Just look at Jerry Brown’s contributors already for his election next year: union, casino interest, oil companies and our ever famous movie industry. All politicians are dirty and in the pockets of lobbyist and special interest groups, who are conservative and liberals. None of them are working for the middle class citizens of the United States of America. Wake up America. Wall Street Bankers are the most visited coming to the White House, which is Democratic controlled. Let’s all get honest and open are eyes…


Absolutely, SLOBIRD! I’m “A-Political”, so I don’t feel offended at all when one ‘side’ trashes’ another. Too bad there ARE “sides’…just one more thing to keep us at each others throats. I agree..very important to “wake up” and keep your eyes open. Very hard to do when your’e being cunningly lied to. Miller had a 20 year good reputation in this area, so we trusted him. Never did care for Gearhart or Graves, but they were in the thick of the theives. I truly do hope SOME sort of justice will be served. It would be great to see some of our money come back…I wonder how likely that will be.


You ask a stupid question and then wonder why no one replies. Maybe people are being polite.

Ask the FBI why Gearhart is not in prison. They have an office in Santa Maria. Give them a ringy dingy. It’s the feds who are prosecuting the case, not the North County conservatives.


We will find out on November 11th won’t we?


Be careful folkes. This bank was involved with every shady deal and investor crook in the North County, largely because of its Board of Directors composed of old time oligarchs. One of these people on the Board got a million dollar loan for her husband’s cattle ranch while she was on the Board They also went against the advice of the bank’s advisors in loaning some of the money to Karen Guth, Kelly Gearhard, Wyrick, and others.


Great strategy by the Bank. We know we are crooks but we will delay, delay the inevitable until we repay TARP, the Feds get off our back, the economy turns around and we are making money. Once we have profits we will pay pennies on the dollar and it will be a “one time” charge and then Wall Street will be happy. We are all about the community lol



You have info? Name names. What boardmember got the loan?


I am interested in knowing who all the board members are…


Read their last proxy statement. That will list the directors names, how much they were paid and how many shares they own. You can probably go to their website then go to investor relations then go to filings and you will find it


Pretty sure they only had one female board member at that time and she was cattlewoman of the year. Its really hard to make shady loans to bank directors and immediate family though. That’s one of the first areas the regulators look at during regular reviews


Dee Lacey.


This is amazing news!!! Will they start gathering up the bottom feeders like David Graves? And what about people who were not included in this lawsuit, but are still investors? Any help for them?


That doesn’t let you off of the hook Kelly for burning your contractors. Have fun with Bubba!


Here is the part that is GALLING, he still has some of those close to him convinced he was just an innocent victim himself caught when the economy turned. Yea if you hadn’t screwed around with Vista Del Hombre, the property off Morro by Circle K, The property and title for Der Wienersnichel, and the property behind A and W then maybe your bullshit might fly but I DON’T THINK SO!!!!!


he lyrics tell the story ……….