California Real Estate Fraud Report

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16
Jul

SLO Judge Denies Motion to Dismiss Lawsuit against Cuesta Title, Stewart Title

It’s been a long time coming but the investors who sued Cuesta Title,  Stewart Title  and Heritage Oaks Bank for their participation in the scheme perpetrated by Hurst Financial Corp., its owner James Hurst Miller, and real estate developer Kelly Gearhart, are finally going to trial July 29.

The stakes are huge: the 500 investors are trying to recover about $80 million they say Kelly Gearhart and James Miller solicited from them to develop 25 real estate projects between 2004 and 2008, none of which came to fruition.

San Luis Obispo Judge Charles Crandall, who denied motions to dismiss by all three defendant companies, noted: “The court repeats what it said in denying earlier motions for summary judgment: A serious fraud has plainly been perpetrated on a wide group of investors, which is reflected in the indictment and/or conviction of several key players.”

The investors allege that employees at Stewart Title and Cuesta Title helped facilitate wrongdoing by Hurst Financial, Gearhart and Miller by “misdirecting funds out of escrow that were specifically loaned for real estate construction, moving forward with questionable escrows containing contradictory instructions and eliminating valid liens through doubtful business practices,” this according to documents. Heritage Oaks Bank is part of the civil suit because the investors allege the bank also was a participant in the fraud because it was “fully aware of, and assisted in, the fraudulent re-conveyances of the deeds of trust by Hurst.”

James Miller has already pleaded guilty to four counts of money laundering and fraud. For his role, Gearhart has been indicted on 16 counts of fraud and money laundering.

Read the original articles in the San Luis Obispo Tribune and Cal Coast News.  You can also search the California Real Estate Fraud Report to read the many previous postings about this case.

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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