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Gearhart, Hurst investors dug their own hole, says lawyer

August 9, 2013
Kelly Gearhart

Kelly Gearhart

An attorney for Cuesta Title suggested to jurors Thursday in a San Luis Obispo courtroom that investors’ greed was partly responsible for alleged fraud committed by former lender Jay Hurst Miller, developer Kelly Gearhart, and title company officials.

In a session being live-streamed by Courtroom View Network, attorney Mack Staton acknowledged that Miller and Gearhart “are the bad guys,” but noted that investors were receiving 12 to 13 percent return on their investments. Consequently, they did not pay adequate attention to the way their money was being spent.

Staton also suggested that Miller’s prior relationship with many of the investors caused them to be “lulled” into a sense of complacency.

The civil trial initiated by a group of investors started Monday in Superior Court with Judge Charles Crandall presiding. It is the first of several filed civil lawsuits to go to trial.

Stewart Title of California and Stewart Title Guarantee are also defendants in the trial.

Questionable financial transactions by Gearhart, Miller, Cuesta Title and its associates were first reported by CalCoastNews in 2008, beginning a years-long series of exclusive articles detailing the complicit activities of the group.

Most of investors’ money is unaccounted for.

Both Miller and Gearhart are facing criminal charges in addition to their civil woes. Gearhart was indicted by a Los Angeles grand jury, and both men now await further court action.

Cuesta Title official Melanie Schneider is a key figure in the current case, facing allegations that she knew of, and ignored, the fraudulent activities of Miller and Gearhart.

The scheme involved Gearhart’s utilizing false information to secure multi-million-dollar high-interest “bridge” loans from Miller, purportedly for development deals. Gearhart would then use the money to repay earlier investors, and to support an opulent lifestyle.

Gearhart is a one-time “Man of the Year” in his hometown Atascadero, where his largesse made him a favorite of city officials.


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i’m in favor of tatoos


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It’s the Title Company’s job, Escrow Officer AND Title Officer, to clear title for any type of transfer and or loan being placed on the property. The fact that the Title Officer gave a prelim title “report” that showed prior liens on the property doesn’t sit well. Lets find out if the prior liens showed on the Title Policy. If not, just how did the Title Officer, Escrow Officer or the Title Company exclude those from the Title Policy when they insured the loan. You can’t tell me the Title Company if off the hook on this. That is why they are in business. That’s what they do. The Title Officer is just as responsible as the Escrow Officer, as is the Title Company. They all need to be held just as accountable.


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The idea that Cuesta Title didn’t know what was happening is beyond believability. Part of their job was making sure the property owner had a clear title–being aware and doing their research–and they simply didn’t notice anything, or ask any questions, or do their due diligence? They might as well have “CROOK” tattooed across their foreheads.


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So, its okay to do a wrong thing if nobody notices you doing that wrong thing? Yet, when you’re exposed, you blame a group of people who assumed you were doing the right thing? Huh?


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So the victims were innocent until proven broke, “most of the investors money is unaccounted for,” and now they are guilty for being greedy?


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The whole lot of them should be tossed in prison. A good friend of mine got caught up in this whole mess and lost $80,000. It wiped him out and he’s still climbing out from under it.

These bastards can rot in Hell for all I care. That stupid lawyer too.

Blame the victims, indeed.


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“investors’ greed was partly responsible for alleged fraud” what a load.


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If an investment sounds too good to be true, it probably is!


However, liars and thieves should still be thrown into jail for ripping off gullible investors.


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The old “blame-the-victims” ploy.


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