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Kelly Gearhart gets another reprieve

November 22, 2014
Kelly Gearhart

Kelly Gearhart

By KAREN VELIE

The sentencing hearing for former Atascadero developer Kelly Gearhart has been extended from Dec. 29 to Feb. 23. Gearhart faces a statutory maximum of 50 years in federal prison for defrauding investors out of more than $100 million.

In May, Gearhart pleaded guilty to two counts of wire fraud and one count of money laundering in a Los Angeles federal court. Gearhart, 53, admitted that he knowingly and intentionally made misrepresentations and omissions relating to development projects to get people and institutions, including nonprofits, to trust him with their money.

Assistant United States Attorney Stephen Goorvitch asked for the sentencing hearing delay to have more time to determine if any disputed issues can be resolved and to quantify the number of victims and restitution amounts. The judge approved the hearing continuation.

In May, Gearhart plead guilty to three charges in connection with the Vista Del Hombre project. He also agreed to pay restitution to his victims of that scheme of up to $20 million and to be truthful when dealing with the court, the probation department and pretrial services. In exchange, prosecutors dropped 13 of the 16 felony charges.

Kelly Gearhart and James Miller

Kelly Gearhart and James Miller

At that time, Goorvitch said he planned to seek a sentence of 11 years in federal prison. But, United States District Judge Otis D. Wright II is free to sentence Gearhart up to 50 years.

Gearhart and James Miller, the former president of Hurst Financial, defrauded more than 1,200 investors of more than $100 million in an alleged Ponzi scheme. Gearhart bilked investors who put money into Central Coast real estate projects and then siphoned off the monies for other purposes.

Gearhart’s relationships with community leaders in Atascadero and accomplices who included a lender, a title officer and a property appraiser, provided Gearhart with the appearance that he was an upstanding civic-minded citizen when, in fact, he was breaking state and federal laws.

Other than Gearhart and Miller, no one else has yet been charged for their participation in the fraud.

In 2011, Miller agreed to plead guilty to charges of fraud and money laundering in a plea agreement in which the court agreed to grant Miller’s daughter Courtney Brard immunity, according to court records. Miller is scheduled to be sentenced by Judge Wright on Feb. 2.

Gearhart’s questionable financial dealings were brought to light in a lengthy, ongoing series of articles by CalCoastNews starting in 2008.

The developer threatened to sue the news website following the publishing of articles outlining his questionable investment activities in one particular project, the Vista del Hombre golf and business park located on the outskirts of Paso Robles. That lawsuit never materialized, although the website received letters from Gearhart’s attorneys, as well as Gearhart’s personal denial and threats voiced on Dave Congalton’s Home Town radio show on KVEC920.

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What about the Pe Ji Ho Ta casino debacle and the players including Gearhart lawyer and partner Robert Grigger Jones? Is that still under investigation? http://imokproductions.com/home Curious aren’t you?


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Would not the casino solve all the problems? Real estate investors repaid (and then some), Kelly back in the saddle, Chris Molina fartin’ money (aoha nay oha oha dah day , oha oha dah day cha noh nana ahy. aoha nay oha oha dah day , oha oha dah day ,noh nana ahy).


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Don’t worry folks he’ll regret every day he delayed starting his sentence. He’ll wake up in his bunk one morning and the realization will hit him. Within the thought cloud: WOW if I’d just gone in at sentencing, I’d be getting out today. That reality will plague him for all the remaining days he serves. Procrastinating rarely works out well.


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The good news is that every morning, rather than hob knobbing with the low-life big shot politicians and civic leaders from San Luis Obispo to Paso Robles, Kelly just polishes Otis knob. What a change for the big man, who is know just someone’s prison B…h. Maybe his son will be joining him soon.


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Hard to think that with all of the people involved with this that apparently only 2, Miller and Gearhart, are going to prison. There has to be more to this with all of the delays, deal making, that is going on.


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Rod Jarmin would be a good start. I see that POS in the gym, it irritates the hell out of me.


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Jarmins trial is set for 1/5/15……..the DA wants him to do time, so no plea deal with time served will happen.


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Nice to know, thanks


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Call me stupid, but what is an “Otis knob”?


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Our Justice system isn’t blind. As long as you have enough money and clout to open her eyes.


The American Justice system is a sham.


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Thanks to CCN for your part in slaying the dragon!


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They say Lady Justice is blind, but she sure likes those Greenbacks.


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An important message to those defrauded by this crook…..make certain many of you

show up at the sentencing hearing and make your statements to the judge. I would

keep in contact the Asst. AG Stephen Goorvitch. Demand a long sentence and not to be served at the “country club” Lompoc Federal Prison. This lowlife has been getting away

with murder in our court system.

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He could be sentenced via a hearing in the judge’s chambers and no one would be

notified. It’s done all the time, an often used lawyers’ trick.

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Disgracefull and shame on our court system!!!


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When he was a Good ol Boy Officer at the Calif. Men’s Colony he got away with as you

say “murder” doing favors whenever and wherever he could…

He’ll do the same in Lompoc Prison.


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Lompoc used to be the country club prison, we all remember the Watergate crooks going there.

But several years ago it was changed from minimum security

to Federal Maximum Security.

Driving by there now is creepy, several rows of razor wire, etc.,

it’s all locked down, and the heightened security is obvious.


Lompoc is not what it used to be thanks in large part to the change in prison,

and the families who move there to be closer to their inmate family members.


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It would be bizarre if Kelly Gearhart

was sentenced to serve time at the California Men’s Colony

where he used to be an in-the-car Correctional Officer.


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what was his bail, 2,000? It appears as though you can cut somebodys heart out and serve less time.


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And live in SLO Town…at that


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Just a guess but I’m thinking that X California Correctional Officer Kelly Gearhart will be sentenced to no more than 10 years, or less, but will be let out of Lompoc Federal Correctional Institution within 5 years of sentence for ½ time / good time served. And that he and his wife will be living the good life in the Cayman Islands before he turns 60 will Millions of dollars to spend from his / their hidden bank accounts. That’s cooperation for ya.


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I hope your wrong but I doubt it…..


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