Gearhart sentenced, cuffed, headed to prison

July 2, 2015

Updated at 6 p.m.

Kelly Gearhart

Kelly Gearhart

By KAREN VELIE and DANIEL BLACKBURN

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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scoopone

Looks like he’ll be on suicide watch for awhile. I hope he’s not going to serve his time at the Lompoc Federal Country Club!!



Fourteen years is not enough as far as I’m concerned….arrogant bas….d.


SLO_Johnny

Lompoc was upgraded. It isn’t a country club anymore.


obispan

“Upgraded” is a matter of perspective. Anyway, no more golf course. Here’s a great article on the change. http://articles.latimes.com/1990-07-30/news/mn-759_1_federal-prison-camp/2


bobfromsanluis

That article you linked to was from 1990 …


amethyst

Now for Chris Molina, Grigger Jones, and the Pe je hota crowd and their cohorts. Oh don’t forget Melanie Schneider and whoever covered her tracks. Doubt if his buddies will ever be prosecuted, just wishful thinking. Good day though.


Chicken Boo

Looking back, too bad Kelly couldn’t have “done the right thing” right from the start. When the economy went bad, stand up and pay back the investors everywhere he could. There were many ways he could have squared up. There WERE contractors that actually did that to the best of their ability. None of us would have been here today, maybe. But Gearhart, Miller, and Graves all just bitterly hung onto their greed and REFUSED to be honest! They have done this to themselves. I feel no pity for them. They had a chance to come clean but chose to stay dirty as long as possible. Morally Impaired. That’s what it’s called.


racket

If you’re vindictive, and I know I am, you owe CCN your gratitude for getting the ball rolling that finally smashed this dirtbag. Many, many other people and organizations helped bring him down, but it started with the Uncovered SLO exposé. You can show a little gratitude by clicking the DONATE button at the top of the page.


Marion Louise Warner

I’m real sorry Kel didn’t get to bid farewell to his “family”. I too was once (I thought) part of his family ,but after his Dad died I figured out I didn’t really mean a thing to any of them. There are plenty of others that should have to pay the piper for their part in the whole mess, too.Well, what goes around comes around. For now I’ll step off and concentrate on my own survival,such as it is. Thanks Kel ENJOY !!! — I sure have


Cindy

Hi Marion, I remember your story and it was a heart breaker. All anyone has to do is insert your name “Marion Warner” into the CCN search tool to locate the series that CCN reported on surrounding your life experience with Kelly. I hope you’re doing well and have resettled “somewhat” comfortably.


Jorge Estrada

Absolute kudos to CCN. If Kelly can trade years for testomony, 14 years may not be enough to complete the harvest? Best wishes to the surviving victims and hope that Kelly can expose an opportunity for their full restitution..


SLO_Johnny

He could have made a plea and agreed to provide evidence but he decided to roll the dice. The sentence can’t be reduced now. It is what it is.


Cindy

I think he did take a plea deal when he agreed to plead guilty to the 3 charges and have the others dropped. Up until then, he was facing up to 300 years, wasn’t he?


Jorge Estrada

Did he get 286 years waived by saying, ” the devil made me do it” ?


Cindy

WOW, I still recall the 2008 radio show on Dave Congalton with Kelly telling Karen:


“lies, lies lies, I’m gonna get my lawyer and sue you”


. Who would have thought that this podcast would have been played in a Federal Court House 7 years later as proof of his denial to investors when the truth was being revealed on the public airwaves on the Dave Congalton Show.


I know I’m going to get butt kicked for this next statement but hearing that he was crying when his attorney said that Kelly wasn’t very smart for paying interest on 8 Million that Miller collected but never paid to Gearhart and hearing how he was crying today when he got sentenced made me feel a bit sorry for him. The Hey Days are gone and now it’s time to pay. Of course I know that the investors suffered terribly and many will suffer for life, I have always had great empathy for them, likewise I can’t help but think of all the pain and suffering that could have been avoided if Kelly could have looked forward to see this day.


pasoparent5

Just took a quick peek at Tamara’s to-do list:


1) Hide money before Oct. restitution hearing


2) Keep shredding docs


3) Carry onion in pocket in case “instant tears” are needed


4) Get passport & buy plane ticket


5) Get the $(#$ outta Ohio before winter


6) Find good divorce lawyer


achillesheal

Great post! Maybe add:


7) find new sugar daddy


kayaknut

She has access to the millions hubby hide so really won’t need the “sugar” part of daddy, but likely will need a crooked banker or investment person to help her keep it hidden from the IRS and others while she lives off it. A trip to some “no extradition” country will probably take care of that along with the bank book from the Cayman Island’s bank or such.


Still Standing

..”He did however blame a variety of others for his woes”! So he DID thorw others under the bus! I knew he would!


obispan

Well, they did take the bait and gave him the money. Chase stuck a microscope up my a** and did a property appraisal before they loaned me s**t.