Former Atascadero lender sentenced to 7 years

October 20, 2015
Kelly Gearhart and James Miller

Kelly Gearhart and James Miller


Former Hurst Financial principal James Miller was sentenced to seven years in federal prison on Monday for misappropriating millions of dollars that victims invested in Central Coast real estate projects and for helping developer Kelly Gearhart defraud a bank.

Miller, 67, pled guilty in 2011 to charges of mail fraud, wire fraud, money laundering, and making a false statement to a bank. Miller and former North County developer Kelly Gearhart allegedly swindled some 1,200 investors out of more than $100 million in a lending scheme involving hard money. In July, Gearhart was sentenced to 14 years in prison.

Kelly Gearhart

Kelly Gearhart

Before Miller’s sentencing, 22 former business associates, family members and friends sent letters to the court supporting Miller. Supporters included former Hurst Financial employee Erika Tidwell, several escrow officers who did business with Miller and Atascadero based attorney Robert “Grigger” Jones, Gearhart’s former partner in a proposed Indian Casino.

Miller operated Hurst Financial, a hard money lender which essentially acted a “middle man” between investors and real estate developers, including Gearhart.

Miller solicited investments in Paso Robles real estate development projects known as Beacon Road and Vista Del Hombre (which involved Gearhart), as well as the Salinas River real estate development project in Templeton. After obtaining funds from investors, Miller used money from investors to develop different real estate projects, make interest payments to investors, and pay-off loans related to different real estate projects.

Miller also admitted that he aided and abetted false statements made by Gearhart to Heritage Oaks Bank. Prosecutors argued that Miller helped Gearhart clear title to Vista Del Hombre lots that were securing victims’ investments, and Gearhart then used those lots to obtain bank loans from Heritage Oaks Bank and San Luis Trust Bank.

In asking for a prison term that was half that of Gearhart’s sentence, prosecutors noted Miller’s acceptance of responsibility and cooperation. Prosecutors also argued in court documents that, although Miller misspent money from victims, he did not steal the money for his personal use or to fund any lavish lifestyle. Unlike Gearhart, who defrauded victims for his own personal gain, Miller “was an established businessman who committed certain crimes when faced with economic difficulties,” according to a sentencing memo filed in court.

Nevertheless, prosecutors sought a seven-year sentence based on the significant impact Miller’s crimes had on the community, as well as Miller personally profiting from commissions and fees on victims’ investments.

“Miller turned to fraud when faced with a choice between helping Gearhart and safeguarding victims’ investments,” said United States Attorney Eileen M. Decker. “This significant sentence emphasizes that he made the wrong choice.”

The cases against Miller and Gearhart were the result of an investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation.



  1. Nancimeek says:

    Former Attorney Robert Grigger Jones should be doing time for aiding and abetting both of these guys as well as what he did to our family. See our website for more on the fraud committed against the Meek family.

    (17) 23 Total Votes - 20 up - 3 down
  2. 4honesty says:

    Why isn’t Kelly Gearhart wife being made responsible for anything? You can’t tell me she didn’t know what was going on? Why is it she can live lavishly from everyone else’s money and not be affected? That’s like a slap in the face to all of the victims in my opinion. Take away her Gucci bags and make her get a job and live off of her pay!

    (19) 19 Total Votes - 19 up - 0 down
    • Mr. Holly says:

      It’s called plea bargaining. That is why Hurst’s daughter and others are not going to the big house too.
      Both Gearhart’s wife and Hurst’s daughter are as guilty as the convicted.

      (19) 19 Total Votes - 19 up - 0 down
  3. ToHellinaHandBasket says:

    One word.


    Federal Prison? Oh yeah law abiding citizens. That’s the place to be spending time. Comfort beyond compare. He and Gearhart should be in the State Prison system. Bet ya that Gearheart gets out in 3, Miller, in 1.

    And then the racket starts all over again. Federal Prison. What a joke.


    (10) 20 Total Votes - 15 up - 5 down
    • Paso_Guy says:

      I believe in the federal system there is no time off for good behavior, you do your whole sentence.

      (17) 17 Total Votes - 17 up - 0 down
  4. pasoparent5 says:

    Like I’ve posted before, right about now Tamara may be cashing out some assets (don’t tell me they haven’t hidden some money!) and buying some plane tickets.

    The chances of her sticking around Wadsworth, Ohio for seven lonely years are about zero.

    With her man behind bars, she’s finally free to spend their cash…and possibly hire a good divorce lawyer.

    (18) 22 Total Votes - 20 up - 2 down
    • BeenThereDoneThat says:

      Tamara is Kelly’s wife and she’ll be waiting 14 years.

      (12) 18 Total Votes - 15 up - 3 down
    • indigo1955 says:

      Tamara is an immaculately groomed woman….white Mercedes with light interior, different designer handbag each time I see her, and clothes that would make any woman green with envy. I don’t see her in Wadsworth either!

      (12) 20 Total Votes - 16 up - 4 down
  5. Pelican1 says:

    Federal prison is nothing more than a country club…he belongs in Pelican Bay.

    (9) 19 Total Votes - 14 up - 5 down
  6. MaryMalone says:

    Seven years? That’s it?

    (16) 24 Total Votes - 20 up - 4 down
    • Pasobear says:

      Did Jay get taken into custody immediately, like Kelly did? Also there was supposed to be a restitution hearing today, did that come off? What did the Judge rule at that hearing?

      Jay was not a victim of the economy, he stole that money for his own personal gain and that of his immediate family. His daughter and wife walked away with plenty of hidden money. His daughter should be in an adjoining cell with Jay. She knew what was happening and was extremely complacent in the dealings.

      (21) 25 Total Votes - 23 up - 2 down

    Grigger should join Mr Miller behind bars.

    (31) 35 Total Votes - 33 up - 2 down
  8. 3 putt says:

    And Al Moriarty will be out in a month or so.

    Equal protection under the law? –Not for the victims.

    (24) 30 Total Votes - 27 up - 3 down
  9. achillesheal says:

    Miller “was an established businessman who committed certain crimes when faced with economic difficulties”.

    Why should his motivation to commit the crime be relevant to the sentencing.

    We all faced economic difficulties in 2008 and 99% of us sucked it up, cut back, and did our best to get through it – honestly and legally.

    He got off too easy.

    (48) 58 Total Votes - 53 up - 5 down

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