Atascadero Real Estate Developer Sentenced to 14 Years in Prison

A Los Angeles judge sentenced 54-year-old Kelly Gearhart to 14 years in a federal prison Thursday morning. The former Atascadero ‘Citizen of the Year’ was convicted of fraud and money laundering after costing millions of dollars to investors who had contributed money into Central Coast real estate projects.

Gearhart pleaded guilty last year to two counts of wire fraud and one count of money laundering. He admitted that he knowingly and intentionally made misrepresentations and omissions relating to his Vista Del Hombre real estate development project, to convince victims to give up their money.

Further, Gearhart openly admitted that he sold lots that were part of the Vista Del Hombre project in Paso Robles, even though those lots were being used to secure others’ loans. Gearhart then used those same lots to obtain bank loans.

The case against Gearhart is related to a case against James Hurst Miller Jr., the former president of the Atascadero-based Hurst Financial Corporation. Miller previously pleaded guilty to fraud and laundering charges. He is currently awaiting sentence.

A restitution hearing is scheduled for October 20. Prosecutors will be allowed to seek restitution for victims of the Vista Del Hombre project, and other fraudulent conduct involving Gearhart. As much as $20 million may be awarded to victims.