Gearhart sentenced, cuffed, headed to prison

July 2, 2015

Updated at 6 p.m.

Kelly Gearhart

Kelly Gearhart


Notorious North County developer Kelly Gearhart was sentenced to 14 years in federal prison Thursday morning by U.S. District Court Judge Otis Wright II in Los Angeles.

Gearhart, 54, was immediately stripped of his eyeglasses, wedding ring and other personal belongings, handcuffed, and led out of the courtroom by two federal marshals.

The sentence was three years more than prosecutors had suggested. While Gearhart had hoped for a more lenient prison term, Judge Wright sentenced Gearhart to 14 years each on two counts of wire fraud and one count of money laundering to be served concurrently.

A court official said Gearhart likely will serve at least 85 percent, and probably all, of the sentence.

Gearhart’s attorney Firdaus Dordi argued that Gearhart had been an honest developer whose pride drove him to bend the rules after the market went south. Dordi said that Gearhart had donated money to build the Atascadero High School track, money Dordi said did not come from investors in Gearhart’s projects.

However, United States Attorney Stephen I. Goorvitch  displayed an accounting that showed the $35,000 Gearhart donated for the track came from investors in his Salinas project. Goorvitch said that while a history of philanthropy can result in a lower sentence, in this case Gearhart was spending the victim’s money.

Gearhart’s attorney asked the court to allow his client to remain free until his Oct. 20 restitution hearing so that Gearhart could have time to explain his situation to his 5-year-old daughter.  Judge Wright denied the request while questioning if Gearhart had squirreled money away that he could use to flee.

Gearhart cried intermittently throughout an approximately five-minute statement that included apologies to his victims and claims others had told him his fraudulent acts were legal.

“I want to say how deeply sorry I am to everyone involved and their families,” Gearhart said. “I relied on someone else to say it was lawful. I did not know when to give up. I let my ego get in the way.”

Judge Wright said that even though the prosecution had not clearly established direct harm to hundreds of victims, the grievous harm Gearhart inflicted on his victims led to the higher sentencing.

“I want to note that many crimes are motivated by needs,  some by drug addictions, and some by plain and simple greed,” Judge Wright said.

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  1. kellyfraud says:

    Kelly filed an appeal yesterday – guessing it was to reduce the length of the sentence.

    (3) 3 Total Votes - 3 up - 0 down
    • R.Hodin says:

      One can only hope that it will take the court as long to hear the appeal as it took to finally get a sentence in the first go-round.

      (7) 9 Total Votes - 8 up - 1 down
    • LAWMAN1 says:

      Kelly Gearhart was not a bad man, he just got greedy and got caught. Every single person out there if given the opportunity to make extra cash would do it. Gearhart just got to greedy. I remember years back the Chief of police of Atascadero made some huge profit on cars he sold through Atascadero Ford and there was huge controversy over his profits.but there again…he just got greedy…
      EVERY last one of you out there bit#@ing if given the opportunity to make big money fast would do it…
      He’s getting prison time…leave it alone

      We don’t hear any crap about David Weyrick he cost people millions of dollars and left owing local contractors and business $$$$ not to mention when he foreclosed on his home before he left he stripped every fixture and countertop and soaked the floor with oil… now that’s a scum bag.

      (-6) 10 Total Votes - 2 up - 8 down
      • tictac1 says:

        You sir are an ass. Many of us pass up chances for monetary gain at the EXPENSE OF OTHERS. There are plenty of honest lenders and developers around here, Gearhart was not one of them. After he got caught, he continued to attempt to evade responsibility, and hide ill-gotten assets. He is a liar and a thief.

        Your contempt of other honest people shows that you are probably more like Kelly than we are. I talked to him once, back when he was trying to push through his golf course development idea. Judging from the character he displayed, he will not fare well in prison.

        (5) 5 Total Votes - 5 up - 0 down
  2. fat chance says:

    Let hope it’s Jarmin’s turn next. I hope the judge sees the error of the DA office. He is no better than Gearhart.

    (9) 13 Total Votes - 11 up - 2 down
    • No_More_Anger says:

      I don’t believe there is a smoking gun with RPL. If you have knowledge of one, please share.


      BTW, Jarmin. Is a business creep, but that doesn’t make him a felon

      (-8) 12 Total Votes - 2 up - 10 down
      • No_More_Anger says:

        I’ll take the three negs means no smoking gun.

        (-2) 6 Total Votes - 2 up - 4 down
  3. Rawhide says:

    I meant my statement to be a kind of tongue-n-cheek” because Kelly the Gearhart was a schmoozer while he was a Corrections Officer at CMC SLO CA.
    He had influence from the Warden all the way down.
    Needed overtime…jump to the front of the line.
    Wanted week-ends off…He got it.
    Needed days off to work on some high up muckety muck’s new home…bingo…etc…
    As a young man / Corrections Officer / he was “The MAN of la-CMC”…

    (12) 16 Total Votes - 14 up - 2 down
    • malovato says:

      Hey Rawhide… As a long time CMC Correctional Officer and no fan of Kelly Gearhart by the way, after reading your post, I assure you that you are full of crap. You have NEVER worked at CMC and have no clue how things operate at CMC now or in the past. Gearhart had “No Juice” as a C/O. He was a regular C/O like the rest of us.

      (0) 12 Total Votes - 6 up - 6 down
      • Rawhide says:


        You are the one full of SHIZEN…

        and did plenty favors
        for people like you…
        You most likely
        are a close friend…imho…
        Kelly was not a regular Officer.
        He was an “in the car” Guard with
        all the high up muckety muck’s !

        (8) 12 Total Votes - 10 up - 2 down
  4. Skitters dog says:

    I think judge Wright did the most commendable action possible.He saw how wrong this was and did not let it slide.The emotional toll on these victims is so unforgivable and so hard to imagine.I am happy he was taken away to prison. There no need to give this clown anymore free time for any explaining his actions to his child. I do feel bad for the innocent child.However gearhart had plenty of time to simply state “dad did wrong and hurt many people” just putting it nicely.All this should make us step back and really be more vigilant.Don’t be complacent thinking this is the only person out there doing this and thinking the bad guy is gone now and all is well. Calcoast news obviously put tremendous effort into investigating the story and allowing us to truly know the facts.Great job.I myself am in my 50’s and taken here locally by greedy people. But to take from elderly people and not care about the rebuilding of their life is more than greed. It is sick and so very sad.I hope this guy rots in prison.I wish the best for the victims.

    (37) 41 Total Votes - 39 up - 2 down
  5. standup says:

    As one of his contractors, Kelly only stole 15k from my partner and I but we were just a small 2 employee company at the time. He flaked on us just when we needed to send off end of the year taxes to the IRS. We were late and got penalized and had to pay interest until the money was payed off. Those were tough times. Thinking back we should have put liens on each property we worked on but he would have just stopped using us because we didn’t trust him. Overall we probably broke even as he did pay us early on and we charged him premium rates as he was always slow to pay. At the time when we knew he would never pay, I wanted to take a bat to him. Now, I just don’t want to ever see him again.

    (52) 56 Total Votes - 54 up - 2 down
    • BeenThereDoneThat says:

      I had done business with Kelly for years also. I was just telling my employee yesterday that I love the irony. A lot of us on the work side (not investors) got hurt bad in non payments but the good news is that almost all are still here and most have now got past this and are moving on. At the same time as we are getting back to normal, Kelly’s normal is about to change for a loooong time. We all went through hell Kelly. Now you can experience some yourself.

      (38) 46 Total Votes - 42 up - 4 down
  6. pearl says:

    Kelly , all your contractor friends that donated their time for the Highschool job and you sat there getting the ROYAL handshake and free admission for life to games, and your royal plack. And you sat there and took all the credit!!
    Oh and let’s not forget “all your contractor friends” , who you stiffed for over 1 million dollars by not paying them!
    Your full of crap! The only reason you and Tamara had a daughter was to keep her ,Tamara out of jail! Everything Kelly did was calculated ! Oh and your poor son may he rest in peace, you were called because he was living under a bridge and you didn’t even give a darn about him. He was a sweet kid , definitely didn’t take after you.

    (56) 64 Total Votes - 60 up - 4 down
  7. ToHellinaHandBasket says:

    “I want to say how deeply sorry I am to everyone involved and their families,” Gearhart said. “I relied on someone else to say it was lawful. I did not know when to give up. I let my ego get in the way.”

    No Kelly. You let your GREED get in the way. For you and your family. At the total disregard to those who trusted enough in you to give you their hard earned money. Even if it was greed on their part to do so.

    Time to man up. You and your attorney using your 5 year old daughter as an excuse to delay your final place of residence is flat out sickening. Use the bottom line up front approach. “Sweetheart, I’m sorry to say this, but your dad is a lying cheat of a father”.

    Or, you could ask your soon to be exwife to explain it to her. She may not though, as now she has control of all the money you and she stole from others and the two will be set for life. Karma ring a bell? Trust not in those whom you believe to love you.

    A suggestion for you. Accept Jesus Christ as your Savior, from your heart. Admitting all of your sins to Him. Repent of your sins. And pray that Tamara will do the right thing upon both of your behalfs, and give the money that you both knowingly stole from those who trusted you paid back in full.

    (33) 63 Total Votes - 48 up - 15 down
    • ironyman2000 says:

      You had me until your lasr paragraph To Hell. Ain’t no Jesus Christ,ain’t no ANYbody
      gonna save him from this one.

      (2) 6 Total Votes - 4 up - 2 down
  8. sezlittle1 says:

    Lies, cheating, deceiving the public in the name of greed. How is this any different than what politicians, jocks and CEO’s do? I do not stand behind what this guy did. Friends and relatives got screwed and lied to. But politicians, jocks and CEO’s walks over the common man to get what they want. I wonder if Mr. Gearheart would have eventually succeeded if he had more time.

    (-16) 44 Total Votes - 14 up - 30 down
  9. Otis says:

    Readers that admire CalCoastNews, and critics who don’t, should marvel at the incredible background on this matter. Karen Velie put her job and career on the line to expose this story. She suffered the troubling depths of sacrifice by her quest — driven by character, guts and resolve — journalistic attributes deserving the highest praise. We take hope that her example will be emulated by others in her profession. She is a very special person!

    (104) 124 Total Votes - 114 up - 10 down

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