Former Atascadero resident Kelly Gearhart released from prison

March 2, 2022

Kelly Gearhart at his sentencing in 2015

By KAREN VELIE

Former San Luis Obispo County developer and Atascadero resident Kelly Gearhart was released from federal prison today, a year early.

Gearhart was serving a nine-year sentence related to a hard money lending scheme in which he bilked investors out of millions of dollars. Gearhart was initially scheduled to be released on March 2, 2023.

After a short stint in home detention because of the COVID-19 pandemic, Gearhart served the end of his sentence in Cincinnati Residential Reentry Management. Gearhart will now reside in Wadsworth, Ohio, under monitoring by the U.S. Probation Office, according to the U.S. Department of Justice.

Gearhart’s questionable financial dealings were brought to light in a lengthy series of articles by CalCoastNews, starting in 2008. CalCoastNews exclusively reported that Gearhart and hard-money lender James Miller had swindled investors in a lending scheme with the assistance of title officers, lawyers, public officials and an appraiser.

While Gearhart defrauded his investors, then-Atascadero Mayor Tom O’Malley and a group of Atascadero residents pushed to have Gearhart named as the city’s “Citizen of the Year.”

More than 1,200 investors, primarily seniors, placed nearly $100 million with Miller to fund construction loans. Instead of protecting investors by funding projects only as work was completed, Miller paid Gearhart in lump sums without any monitoring of the construction, a violation of the investor contracts.

In July 2012, a federal grand jury indicted Gearhart on 16 charges of mail fraud, wire fraud, and money laundering. If convicted on all charges, Gearhart faced as much as 300 years in federal prison.

In 2014, Miller pleaded guilty to charges of mail fraud, wire fraud, money laundering, and making a false statement to a bank under an agreement that his daughter Courtney Brard would not be prosecuted. In 2015, Miller was sentenced to seven years in federal prison.

Gearhart pleaded guilty in 2014 to two counts of wire fraud and one count of money laundering under an agreement that his wife Tamara Gearhart would not be prosecuted. A year later, U.S. District Court Judge Otis Wright II sentenced the disgraced developer to 14 years in prison, a sentence which was later reduced to nine years.

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IronHub

So now Gearhart will sue CalCoastNews for telling the truth about him… kinda like the IWMA and its nest of crooked perjurers.


IDBOUND

I’m willing to bet as soon as the Fed’s are done monitoring his movements and he is able to obtain a passport he will leave the USA with his wife .. To go spend his stashed money


malovato

Gearhart and his cohorts are lowlife crooks. I won’t deny it. But alot of people got greedy and invested their life savings in his hard money investments and lost it all. It’s a shame but I can’t feel overly sorry for them. Why would some people put “all their eggs in one basket”? Investing 101… NEVER DO THAT. People can be Stupid Stupid Stupid. Personally, I lost a little less than $10,000 in a hard money investment many years ago but it was a small portion of my overall investment portfolio. Sure, I was bummed but the hit didn’t hurt me overall. It was my “play money”…. Anyways, this county will be talking about Gearhart for many years to come.


blackjack

It’s true hard money borrowers are usually pushing the envelope which always creates additional risk , but the phony loan to value appraisals and slush funds that went along with some of these local scams duped many investors who probably would not have invested otherwise.


NorthSide

Blaming the victims. Classy.


paragon

Nobody ever got filthy rich by playing it safe. You gotta spend money to make money. If you like safe boring investment strategies, good on ya, but don’t knock others who strive for more. Kelly broke the law and committed a crime and took advantage of people, no matter if you agree with their strategies or not.


Jorge Estrada

It is this simple, struggle paying off your 30 year home loan or lure vulnerable people into allowing you to thieve their millions of dollars and you are paid off in nine years. Sure there is the costly dance in the courtroom but soon you are free to do it again better, ya “Make America Better”, has a popular ring. He might now feel that some wrongfully put him in prison but who know what or how he thinks, most of us know how to work and pay our bills.


debeddarn

Also there were a number of classic collector cars he hid in his garage that “vanished”.


Cindy

Eight years later, Tom O’Malley, Jamie Kirk now Jamie Jones, and Grigger Jones, all of whom helped Gearhart steal our neighbor’s retirements, are now attempting to promote their buddy Geoff Auslin for the county District 2 supervisor seat. We need to reject anyone tied to corruption or fraud and clean up this county.


Anodyne

How was Jamie Jones involved in this? This is the first that I have heard that.


obispan

Because you pay Jamie Jones or you don’t get s**t done in this county.


Robert1

Geoff Austin is an honest and hard-working person who has had several successful businesses and to even label him anything other than that is dishonest. He knows thousands of county people and business owners as well as local elected officials.


obispan

Given that this website’s comments run to the conservative side, the -15 is telling. Auslen is not fooling anybody. Dr. Bruce Davis is a good candidate, the better Bruce as it were, but I’ll take Gibson over Auslen if it comes down to that. I know what he stands for even if I do not agree.


obispan

He’ll be back, he still has a bunch of properties that the federal court somehow “didn’t find” during restitution proceedings. Between Geoff Auslen, Jamie Jones and Mike Sherer he should be back in the saddle in no time.


paragon

Grigger Jones is still around? Didn’t he get disbarred? I would be surprised that the corrupt old bastard managed to stay out of prison, but then I remembered who our current DA is.


kayaknut

Now he gets to enjoy all the money he stole and hid away.


obispan

Yes he does, lots of property hidden, and lots of collusion with local realtors, well, a local realtor.