Jury awards nearly $1 million more in suit against Cuesta Title
June 26, 2015
In addition to awarding about $2 million to former MMA champ Chuck Liddell, a San Luis Obispo jury has awarded nearly $1 million to a pair of brothers, who too claimed Cuesta Title Company helped convicted developer Kelly Gearhart defraud them. [Tribune]
The jury awarded $939,000 to U2 LLC, which is owned by brothers Usman and Umer Iqbal. But, the jury also ruled against five other plaintiffs in the case, opting not to award them money.
All eight of the plaintiffs made similar allegations. The trial focused largely on the conduct of Melanie Schneider, an escrow agent who handled many of Gearhart’s deals.
The plaintiffs alleged Schnedier had a conflict of interest because she befriended Gearhart and his wife, flew on their private jet, briefly lived in their guest house and moved to Colorado with Gearhart’s brother, Doug Gearhart. Schneider also had $50,000 invested in Gearhart’s Vista del Hombre development in Atascadero, on which Liddell lost $2 million.
The jury ruled that an unnamed Cuesta Title employee knew Gearhart was committing fraud and helped him defraud Liddell and the Iqbals. Jurors voted 11-1 in the ruling in favor of Liddell.
Trial testimony indicated that the Iqbal brothers introduced Liddell to Gearhart. One of the brothers told Liddell that Gearhart would trade private flights to MMA fights in exchanged for tickets, Liddell testified.
Gerhart and James Miller, the former president of Hurst Financial Inc., defrauded more than 1,200 investors of more than $100 million in an alleged Ponzi scheme. Gerhart bilked investors who put money into Central Coast real estate projects and siphoned off the monies for other purposes, including his extravagant lifestyle.
Gerhart is asking for a 57-month sentence, while prosecutors are seeking a 135-month sentence. The statutory maximum is 50 years in federal prison.