Jury awards nearly $1 million more in suit against Cuesta Title

June 26, 2015
Kelly Gearhart

Kelly Gearhart

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.

In May 2014, Gearhart pleaded guilty to two counts of wire fraud and one count of money laundering in Los Angeles federal court. Gerhart is scheduled to be sentenced on Monday.

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.


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11 Comments

  1. hijinks2 says:

    The question that needs to be answered is where did Kelly hide all that money? Amazing his son pays cash all the time for extra’s, night out on the town with the wife, buying nice things with crisp $100.00 bills all the time. He lives pretty large for a government employee with no education. Again, the question is, where did Kelly hide that money?

    (9) 13 Total Votes - 11 up - 2 down
  2. October says:

    It’s about time Cuesta has to take responsibility for their part in all of this. They skated way too long. Unfortunately, the payoff will be coming from yet another innocent victim, Cuesta’s underwriter Stewart Title. I’m still waiting for some of Cuesta’s employees to be thrown in jail where they belong. It’s boggled my mind that no criminal charges against these employees have been filed. They purposely defrauded many clients on the premise of “we were just doing what we were told to do.”

    (13) 17 Total Votes - 15 up - 2 down
  3. CentralcoastRN says:

    I would have like to see Chuck ask for 3 minutes in the Octagon with him. Make it a fundraising event.

    (17) 21 Total Votes - 19 up - 2 down
  4. scoopone says:

    Since when does a defendant (i.e., Gearhart) seek a reduced court sentence?

    I thought prosecutors ran the show….not the criminal!! He should get the maximum asked for by the prosecution.

    (28) 32 Total Votes - 30 up - 2 down
    • kayaknut says:

      When you have millions of $$$$$’s, even if they are stashed away just waiting for things to blow over, you get a better legal system than the regular person. They other option is you are a LEO, judge or other “important person” or have friends or family in high places, then you also get a better system than the rest of us.

      (18) 22 Total Votes - 20 up - 2 down
  5. Old Salt says:

    No matter how you flip the coin…
    Given “good time credit” Kelly the X-Corrections Officer most likely will not spend more than 5 years in Prison. Then he’ll probably move to the Cayman Islands to spend his millions of hidden “hard earned” money.

    (19) 19 Total Votes - 19 up - 0 down
    • pasoparent5 says:

      The tropics sound like a good destination for poor Kelly and his wife. They’ve been suffering in Wadsworth, OH for long enough. They deserve to retire in luxury, unlike the schmucks who fell for Kelly’s schemes. [sarcasm!]

      (7) 13 Total Votes - 10 up - 3 down
  6. Mr. Holly says:

    All of the employees at Cuesta at the time knew what was going on.

    (20) 30 Total Votes - 25 up - 5 down
  7. smile4thecamera says:

    And where is this “unnamed Cuesta Title employee” who knew Gearhart was committing fraud and helped him do it?

    (28) 30 Total Votes - 29 up - 1 down
    • achillesheal says:

      according to the Tribune it is an employee named Melanie Schneider who apparently had a conflict of interest because she was close friends with Gearhart and his wife.

      (15) 19 Total Votes - 17 up - 2 down
      • smile4thecamera says:

        Yes, I realize this. I thought it kind of interesting that the jury called her “unnamed Cuesta Title employee” when it seems like her name was coming up just as much as Gearhart’s!

        (16) 18 Total Votes - 17 up - 1 down

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