Tom Murrell accused of benefiting from Gearhart fraud

July 9, 2013
Kelly Gearhart

Kelly Gearhart


San Luis Obispo County Superior Court Judge Charles Crandall Monday denied a motion to dismiss a lawsuit against Cuesta Title, Stewart Title and Heritage Oaks Bank noting the defendants were aware of wrongdoings.

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 Inc. and former North County developer Kelly Gearhart in defrauding hundreds of seniors through illegal investment schemes.

In their lawsuit, San Diego based attorneys Steven Sanchez and David Noonan cite examples of the title company creating false escrows, falsely closing active escrows, and illegally filing clean title reports before placing additional loans on already encumbered properties.

According to Monday’s ruling, Gearhart’s former partner Tom Murrell personally benefited from his position as the president of Cuesta Title. In one example, even though the title on a Morro Road property had multiple beneficiaries, the investors were lumped together on one title because the property had not yet been subdivided.

“As a consequence, Murrell and Gearhart’s company was paid approximately $1.5 million in plaintiff’s investor money to purchase property, thereby directly benefitting Murrell in a transaction closed by his own escrow company,” the ruling says.

The plaintiffs also accuse 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.

In its request for a motion to dismiss the suit against the bank, attorneys for Heritage Oaks Bank claim that Cuesta Title employees failed to inform the bank’s loan officer, Greg Porter, of the pre-existing liens.

However, in a deposition, former Cuesta Title employee Marcus Harmon testified he showed Porter the investor liens in a title report.

Yesterday, Judge Crandall denied both the title company’s and the bank’s motions to dismiss concluding, “A serious fraud has plainly been perpetrated on a wide group of investors, which is reflected in the indictments and/or convictions of several key players.”

Gearhart and the former president of Hurst Financial, James Miller, have been accused of helping to defraud more than 1,200 investors of more than $100 million in an alleged Ponzi scheme.

In the summer of 2011, Miller agreed to plead guilty to charges of fraud and money laundering as part of a plea agreement the court then filed under seal.

In August 2012, Gearhart pleaded not guilty to 16 charges of mail fraud, wire fraud and money laundering at a federal court in Los Angeles. He faces up to 300 years in federal prison if convicted on all charges. His trial is set for Nov. 12.


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Everybody in the lending industry knows Gearhart was a crook but this article is laying the roadmap of how the investors might get repaid. Cuesta Title is now Stewart Title which is a very large company with deep pockets. Lenders pay the title companies to provide them with a prelim that lays out all possible liens, encumberences, delinquent taxes, cc&r’s etc that may affect their position. Loan officers don’t have the tools or knowledge to know this on their own and so they rely on the title companies to provide this for them. Cuesta Title was washing title reports that were being fraudulently provided to investors and lenders. This whole thing could of never happened without the title company being involved. Don’t even get me started on Hurst using a residential appraiser to appraise Vista Del Hombre. There are probably only six appraisers in this county qualified to appraise a project of that scope. By the way although Weyrick was a Director of HOB in the past, I don’t think the dates work for him to be a founder. I think he came along later

Thanks, Atown. I stand corrected. David Weyrich was likely not involved with the start up of Heritage Oaks Bank in 1983, but he was deeply involved around the year 2000 (the beginning of the Kelly Gearhart era?). He was very much present at the showy grand opening of the Arroyo Grande Branch (on Grand Ave. near Courtland, since closed) with his employees serving free Martin & Weyrich wine to customers.

With Weyrich being on the banks board of directors around that time, and with all the wheeling and dealing he and his henchman Todd Hanson were doing, I can’t help but imagine there would be some connection to the schemes of Kelly Gearhart.

Possibly. I don’t want to defend Weyrich. I have never dealt with him personally. To me he has always seemed to be more of a horrible investor than crooked. Plus he wouldn’t have a lot of influence as a single director at HOB it would need to involve more parties. During the credit crisis the Feds came in and destroyed all the locally owned banks. There are now only two remaining. Look at all the “local” banks stock filings

And let’s not neglect the fact that David Weyrich was involved with the start-up of Heritage Oaks bank.

Correction to above: Although Weyrich served on the banks Board of Directors, he was likely not involved with the bank’s formation in 1983, but got on board around the year 2000.

The entire real estate and property development world is full of crooks, conspiring to make themselves rich off of one of the tent poles of the American Dream – home ownership. And now we suffer as the real estate vultures in the county try to convince us once again that the market is shooting to the moon! Listen up sheep, now is the time to buy!

mkaney All the realtors here are 100% protected from any wrong doings.They know it. This has been going on here for years.They are protected by lawyers like Roy Ogden,who sunk so low as to illness against my 78 years old mother and myself..Not once did they question any agents for thier unethical behavior.They did not ask why my My mother’s surety check for $5,000 was cashed, after Ms. Carson’s assurance that the check would not be cashed. It was cashed the very next day even though there was no loan. American Title Company said even though they had no loan or escrow account; they always do what the realtors ask. Then Bruce Blair tried to sell her a home at 407 Bakeman Ln when he she would qualify. He sent her to lenders, and then cashed her check with Fidelity. It is my belief that these realtors committed theft My mother is suffering from dementia and cannot fend for herself in these matters.They all knew this. Unless there is a stop to these practices, others will continue to be taken by thier unscrupulous business practices

Roy Ogden lied and tapes were sold to all brokers and all police departments.Stuck with home for 4 years..Red lined.. Not one agent would list it due to faulty flooring Carson and Builder Gary young allowed to be installed.Nondisclosure. I remember the faces in this ethics board. Tamara Burns telling me I would never understand after she quit.As I asked her explain why she would quit..Discrimination is against the law.You cannot use cancer against a person and refuse to sell thier home.Period.

Now I have for 4 years come a long ways as Century 21 came to do a short sale. They quit and left my mother in default. Fannie Mae and Bob Hubble ex cop.. As all these agents brokers are best friends with all police departments. AG police officer was in the board of realtors meeting. AG police and Grover Beach police are cozy with all these brokers.

Retaliation against me for fighting for my mother as even our renter defrauded us as she was renting from the Builder before us.My mother paid $1.000 over her rent until last unit was sold.Gary Young and Jeromy Gardner are not honest.. Board told everyone they won and that we were crazy.

My dog was pepper sprayed and I was blinded.. I was charged with Battery.. The humiliation we have been put through for 4 years now. Is criminal..I lived here 20 years never met a policeman..

I am happy for finding all the incriminating evidence against a renter, but it is hard following all the intricacies of who did what when and whom to hold responsible for so many things.This all sort of snowballed and , it continues – as the next HOA or community already has a red alert out for me. “They” say that your reputation precedes you. It’s so hard to try to correct what people think about us now and then they react to us based on hearsay…..It’s also very hard to buck the whole community from police to realtors, to lawyers to workers… residents. I caught renter in perjury.. I caught police.. I know for a fact , none of this would have happened if Roy Ogden had not broken this law .So much happened and still continues today. I can only say mkaney is right.. He would be bucking up against this whole county. So do what I did. Contact FBI and expose them.

So, has Murrell or anyone else at Cuesta been charged? None of this scheme could have occurred without their illegal shenanigans yet it seems they may have all skated.

November 12th.

Of what year?

mkaney…do what you must, write it down or call the FBI providing as much detail as possible. It’s this kind of information that gives investigators PROBABLE CAUSE to get search warrants and do more investigation.

It’s the Gearheart’s and all these shady greedy types in the real estate business doing the flipping, developing, bad loans, etc that has ruined many, many lives and its ramifications to the US economy and undermining a balanced market place…IMHO

your statement, written or oral may connect some dots that weren’t previously known…

Is the Tom Murrell mentioned in this story the same as the Tom Murrell who owns the Mission Oaks Plaza?

The Greg Porter mentioned in this story was on the Atascadero Planning Commission around 2005 when Gearhart (et al) were rolling in the moola. Roberta Fonzi and Grigger Jones were on the planning commission as well ….. it makes you wonder doesn’t it?

Doesn’t make us wonder at all. We all know what they did. They should all be in prison, or at least have their remaining riches stripped away from them.

Tom Murrell purchased the Mission Oaks Plaza from guess who? Gearhart to Murrell, the details of that transaction would be interesting to know.

Rest assured mkaney most of the allegations have been proven, and rest assured the evidence will not lie. Also rest assured I will be there on November 12, 2013. The Sin of Omission is worse than a lie. If you have evidence I encourage you to contact the prosecution at the US attorney’s office or Dieter Wilkomm with the Santa Maria FBI. I posted the truth on our web site regarding Gearhart’s partner Grigger Jones. Don’t be afraid of telling the truth.

Not shocked.. I have born witness to the business practices of this guy personally. He is part of a whole group of investor jerks in this area that have no moral fiber whatsoever. I would love to name some other names but I’m going to avoid a big drama and a bunch of threats from guys who have a lot of attorneys.

Mention the names to the Feds. It’s their job to protect us. Or send a letter without your name on it. Or tell your wife to rat them out. Make sure people know.

Blessings on whistleblowers. Too bad we need them.

Spirit.. most of things involve circumstances which would be either difficult to prove, or aren’t really illegal, they’re just unethical and greedy.

mkaney.. we talked.. I told you lots, and I am suffering the consequences of being red lined..But I told FBI and many other sources..I am just one small person, who’s mother was tossed under the bus..I will not stop until justice is served.To much in this county and it’s lack of transparency by our DA is a crime.Unethical and greedy is illegal when they cover it up breaking a law..I was told no lawyer had ever sunk so low as to break the laws they did with us. Then they tried to cover it up.It was illegal and Chief of state Bar is watching.. water gate.. more you cover up the more mistakes are made. I see people now who were in the board of ethics ,who covered up and are now mayor. Come on.. You have a lot more information and you will heard I hate to say this but you know one day.. you might need someone to protect you .. this county needs help.. it is beginning to look like