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New Times / News

The following article was posted on May 30th, 2013, in the New Times - Volume 27, Issue 42 [ Submit a Story ]
The following articles were printed from New Times [newtimesslo.com] - Volume 27, Issue 42

Moriarty makes SLO court appearance

BY MATT FOUNTAIN

The former Grover Beach financial consultant accused of pilfering some $22 million from his clients made his first two appearances in SLO County Superior Court.

Al Moriarty, 80, was extradited from Bremerton, Wash.—where he also owns a home—following a months-long investigation by the SLO County District Attorney’s Office, the California Department of Corporations, the California Department of Insurance, and the FBI.

Moriarty appeared for an arraignment May 13, which was continued to May 15. Appearing solemn and confused, wearing an orange jumpsuit, he sat before at least 10 of his alleged victims.

He stands accused of seven felonies, including grand theft by embezzlement, selling securities using fraudulent practices and false statements, and selling securities and investments without a license. Accompanying those charges is a host of criminal enhancements related to allegations of misleading investors on the financial condition of his business, falsely stating the nature of his investments, and failing to disclose when he was preparing to file bankruptcy.

Prosecutors allege that Moriarty operated a “Ponzi-like scheme,” where he would issue hand-written promissory notes to his clients—most of them retired and elderly—and pay old money with new.

He was initially represented by his Pismo Beach attorney Kirby Gordon—a real estate attorney representing Moriarty in the 19 civil suits against him—but was ultimately assigned a new attorney, Tom Allen. Moments after arriving in court and meeting his new client, Allen was handed a roughly inch-thick case file. In an amicable exchange, he and Deputy District Attorney Andrew Baird joked that Allen must be a “masochist” and that the discovery against Moriarty would “multiply by 500” what was in the file.

Moriarty filed for Chapter 7 bankruptcy in July 2012, claiming some $18 million in debt. Marc Stern, Moriarty’s Seattle-based bankruptcy attorney, told New Times that the criminal charges against him and his incarceration will likely affect the timeliness of the bankruptcy proceedings, but he wasn’t sure of the specifics, he said.

Moriarty’s hearing was continued to May 29, and he currently remains in SLO County Jail on $5 million bail.