Chuck Liddell files lawsuit over investment to Kelly Gearhart

May 14, 2015
Chuck Liddell

Chuck Liddell

A lawsuit filed by former mixed martial arts champion Chuck Liddell against Cuesta and Stewart Title for the companies alleged participation in a money laundering scheme by former North County developer Kelly Gearhart goes to trial on Thursday.

Liddell claims his signature was forged on escrow documents which caused him to lose $2 million. Liddell’s suit says Cuesta Title Company made misrepresentations and failed to disclose adverse facts to him. Cuesta Title was later purchased by Stewart Title. [Tribune]

Attorneys for the title companies claim Liddell signed the documents.

Gearhart and James Miller, the former president of Hurst Financial Inc. (HFI), 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.

Multiple lawsuits claim employees of Cuesta Title – now Stewart Title – aided and abetted and/or conspired with Miller and Gearhart. Cuesta Title created false escrows, falsely closed active escrows, and illegally filed clean title reports before placing additional loans on already encumbered properties, according to the lawsuits.

In some cases the title companies have paid investors a portion of their losses and in other cases investors lost their claims in court.

In an odd twist, Melanie Schneider, an ex-employee of Stewart Title who was a key person in the majority of HFI alleged fraudulent transactions, reportedly moved to Colorado with Gearhart’s brother, Doug Gearhart, shortly after the fall of HFI, sources said.

In May 2014, Gearhart pleaded guilty to two counts of wire fraud and one count of money laundering in a Los Angeles federal court. His sentencing hearing is set for June 1.

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



  1. Citizen says:


    Best suggestion ever. I know someone who is in contact with Chuck Liddell, and I’m going to pass your comment along. I think Mr. Liddell will get a kick out of it.

    (-1) 3 Total Votes - 1 up - 2 down
    • Citizen says:

      This should have been under Scottabeer’s comment. Scroll down.

      (0) 0 Total Votes - 0 up - 0 down
    • OnTheOtherHand says:

      Liddell and other professional fighters would be put under a legal microscope if someone with whom they had a beef got a beatdown. Much as we would all like to see him take Gearhart apart physically, I doubt very much he would take the chance to do so if offered to him because of the legal consequences. Now if Gearhart were to threaten him or initiate a conflict, that would be a different matter but I don’t think Kelly is quite that dumb.

      (0) 0 Total Votes - 0 up - 0 down
  2. tidepool says:

    stand in the long line Chuck. when is Rod Jarmin going to be prosecuted? he struts around the court house in his Neiman Marcus suit and shoes greeting people like he is running for public office. no shame! and Karen Guth is working at her boutique wine basket store with her daughter in law opened up with the money she stole from innocent victims after serving her brief sentence in prison. no shame! Kelly Gearhart will drag this out as he lives the high life spending his victims money just like Rod and Karen.

    (37) 39 Total Votes - 38 up - 1 down
    • Citizen says:

      That’s why I will never spend a dime at the General Store or eat at Robert’s Restaurant in Paso Robles. You’re right. These families, after convicted of crimes against their own neighbors, hang around to prey on people who grow to trust them again.

      (5) 5 Total Votes - 5 up - 0 down
      • tidepool says:

        actually they have to do their parole where they committed their crime. when Karen Guth is off parole, she will probably fly to the Caymen Islands or wherever she and her son hid their embezzled funds and withdraw her victim’s money and go live the life of the rich and famous. guilt free.

        (1) 1 Total Votes - 1 up - 0 down
  3. indigo1955 says:

    Corruption……it is everywhere. The item I am waiting to see in the news is how much money laundering goes on in “The Happiest Town”. Businesses that come and go so quickly in the downtown area that carry select Italian shoes or other “not popular” items—-yet net the owners $$$ have always been a sense of curiosity to me. These businesses do expensive renovations—carry high priced items that never sell—and then are gone in a year. If you keep track of this (back of the Tribune and New Times) you will see that these businesses change names over and over DBA a different company name….but involving the same key players–that open a close businesses over and over. That is the one I am waiting to find out about. There is some major, major money in this town….but it is exchanged in ways we know nothing about….

    (14) 20 Total Votes - 17 up - 3 down
    • Citizen says:

      Some of these businesses are started as tax write offs. They can lose money for five years before the IRS clamps down. Losing money allows them to use the business as a tax deduction or to launder drug money.

      (2) 2 Total Votes - 2 up - 0 down
  4. sbjcl says:

    You really have to watch out for theses citizens of the year.

    (30) 30 Total Votes - 30 up - 0 down
  5. BeenThereDoneThat says:

    He can sue but what is he suing for? There isn’t any money. Yea I know he is going after Cuesta but that will be hard to prove. And Gearhart’s bankruptcy payout here three months ago was pennies on the dollar. Yes I know people will say he has money stashed, etc. but we can’t work on I think or he might. We have to work on realities. No one is EVER going to get back much of anything but pennies on the dollar. I don’t like it. I am one who got pennies on the dollar and I was a vendor not an investor. I have found for my own sanity, better that I have moved on and accepted. Doesn’t mean I forgive or it is right but getting back to reality. The money is gone and is NEVER coming back.

    (25) 25 Total Votes - 25 up - 0 down
    • Cindy says:

      He is suing the title company insurance. I don’t think it’s difficult to prove that they cleared title on encumbered properties or that his signature is forged (if it is). Frankly, I’m surprised that more people didn’t sue the title company. They all are required to carry insurance for things like failure to fully disclose encumbrances that can damage a buyer/investor.

      (19) 23 Total Votes - 21 up - 2 down
      • BeenThereDoneThat says:

        Here is the problem Cindy. They can sue the title insurance company and then guess what they will do? File bankruptcy and the cycle will continue. Don’t underestimate that I like or approve of. I have said for years to people that bankruptcy has turned into a get out of jail free for many. I know people that have planned to file bankruptcy and right before they do, go on spending spree on credit cards and then file. Whole system is F**KED UP!!

        (11) 13 Total Votes - 12 up - 1 down
        • Cindy says:

          Yes the system is messed up but the insurance company is still responsible for their insured regardless of whether they file bankruptcy after the fact. My point is that there is money to be had and the title company insurance is a viable means of recouping one’s losses when a fraud has been committed.

          (11) 13 Total Votes - 12 up - 1 down
          • 3 putt says:

            Ugh, yeah but it gets muddier. Almost all insurance policies have an exclusion for fraud. The Title Company will probably get a defense but there are more layers of the onion to peel in order to recover.

            (6) 6 Total Votes - 6 up - 0 down
          • BeenThereDoneThat says:

            I have one word………………….A.I.G.

            (0) 4 Total Votes - 2 up - 2 down
  6. Fedup says:

    Gearhart’s sentencing hearing is set for August 17th not June 1st.

    (4) 6 Total Votes - 5 up - 1 down
  7. fat chance says:

    Is Gearhart ever going to jail. I think he is the new Teflon man. Same with Rod Jarmin.

    (13) 13 Total Votes - 13 up - 0 down
    • Black_Copter_Pilot says:

      Jarmin did nothing wrong, just ask him….trial set for 6/8, if it’s not pushed off for the 8th time

      (8) 8 Total Votes - 8 up - 0 down
  8. scottabeer says:

    I think they should let Chuck Settle out of court. Kinda let them go out behind the barn and have a nice “conversation” 30 Seconds with the iceman and Gearhart will be writing a check.

    (55) 63 Total Votes - 59 up - 4 down
    • womanwhohasbeenthere says:

      Could not agree more. Sometimes that is the only thing people understand, especially like Gearhart. And Chuck while you’re at it, give him a few slugs for all the seniors he bilked. BTW I gave an autographed copy of your book to my son-in-law a few years ago. It shouldn’t be too hard to determine a forgery. One’s signature can change over time and this might be from the same time period. Let me know if you need it. I would be honored to help someone fight this deadbeat!

      (18) 18 Total Votes - 18 up - 0 down
    • Dexter says:

      30 seconds? Come on scottabeer lets follow the UFC rules … Lets give Chuck 1 full 5 minute round with Gearhart and a second round 5 minute round with Jay Miller. I doubt there would be a third and final round and its probable that Gearhart and Miller would be carrying their livers around in a bowling bag for the rest of their lives …. Now thats a fight I would pay triple to go see.

      (3) 3 Total Votes - 3 up - 0 down
    • OnTheOtherHand says:

      This is purely secondhand, but I heard that Chuck worked out at CMC as a nurse’s aide while at Cal Poly. He was there to give those “30-second lessons” to inmates who didn’t respond politely to the real nurses.

      (-2) 2 Total Votes - 0 up - 2 down

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