By KAREN VELIE
Notorious North County developer Kelly Gearhart won a five-year sentence reduction on June 11. He is now scheduled for release on March 2, 2023.
In July 2015, U.S. District Court Judge Otis Wright II sentenced the former Atascadero “Person of the Year” to 14 years in federal prison.
The prosecution asked for a sentence of 11.25 years while Gearhart sought 4.75 years imprisonment. Nevertheless, Wright sentenced Gearhart to 14 years noting the grievous harm Gearhart inflicted on his victims.
Shortly afterwards, Gearhart filed an appeal of his guilty plea and 14-year sentence. While Wright reduced Gearhart’s sentence, he still found Gearhart guilty of two counts of wire fraud and one count of money laundering.
The charges revolved around accusations Gearhart bilked investors who put money into his Central Coast real estate projects, and then siphoned the money off for other purposes, including maintaining a lavish lifestyle.
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.
More than 1,200 investors, primarily seniors, placed nearly $100 million with Miller for funding construction loans. Miller failed in his contractual agreement to protect investors by funding projects only as work was completed. Instead, he paid Gearhart in lump sums without any monitoring of the construction.
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 plead 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.
Also in 2014, Gearhart plead guilty to two counts of wire fraud and one count of money laundering under an agreement that his wife Tamara Gearhart would not be prosecuted.