Kelly Gearhart gets 14 years, will appeal



Former developer and 2006 Atascadero citizen of the year Kelly Gearhart hardly had time to hear his cell door clank shut before he began looking for a way out.

On July 6, four days after he was sentenced to 14 years in federal prison for bilking investors out of millions of dollars in a Ponzi scheme, Gearhart’s attorney filed a notice of appeal. According to the document, the appeal will be filed with the U.S. Court of Appeal’s Ninth District. 

Firdaus Dordi, Gearhart’s lawyer, said the case hasn’t been officially filed with the appeals court, and the notice signals intent to file an appeal.

“We just preserved our right to file an appeal,” Dordi told New Times

U.S. District Court Judge Otis D. Wright II handed down Gearhart’s sentence on July 2. Prior to the sentencing, Gearhart pleaded guilty to two counts of wire fraud and one count of money laundering in May 2014. As part of his guilty plea, Gearhart admitted knowingly and intentionally misrepresentating information about his Vista Del Hombre real estate project to get his victims to invest their money. Federal prosecutors said Gearhart also admitted to selling Vista Del Hombre lots that were already being used to secure loans from other victims and banks.

While he’s now in prison, there’s still the matter of paying back victims. Wright scheduled a restitution hearing for Oct. 20. According to a press release from the U.S. Attorney’s office, prosecutors will seek restitution for victims of the Vista Del Hombre real estate scam and “any other fraudulent conduct in which Gearhart may have been involved.” That figure could be as high as $20 million. 

“However, it is unclear if there is any money available to repay victims,” the release states.

Dordi said that the appeal process wouldn’t interfere with the restitution hearing, but added that the appeal process could be delayed depending on the result of the restitution hearing.

Sentencing in a related case against the former president of Atascadero-based Hurst Financial Corporation James Hurst Miller Jr. is scheduled for Oct. 19. Miller pleaded guilty to fraud and money laundering charges related to the Ponzi scheme in 2011.

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