The former Atascadero “citizen of the year” convicted of defrauding investors out of millions of dollars in a real estate Ponzi scheme will get a chance to reduce his lengthy prison sentence.
A federal court granted an appeal by 56-year-old Kelly Gearhart and ordered a new sentencing hearing for the disgraced real estate developer, who was sentenced to 14 years in prison after he pleaded guilty to two counts of wire fraud and one count of money laundering in May 2014.
According to an Aug. 25 ruling by California’s Ninth District Court of Appeals, federal Judge Otis Wright erred in determining the amount of jail time Gearhart should serve. Otis sentenced Gearhart to 14 years for each of the three counts to run concurrently. However, the maximum sentence for one of those charges, money laundering, is just 10 years.
“The district judge committed procedural error at sentencing when he selected the sentence by gut instinct and then adjusted the offense level to match it,” an appellate brief filed by Gearhart’s attorney stated.
In addition to the procedural error, Gearhart’s attorney argued that Wright’s sentence was “unreasonable in light of Gearhart’s many positive attributes, his history of success and fair dealing.”
The appeals court also ruled that Gearhart be granted another hearing to determine the amount of restitution he needs to pay to his victims, stating that the judge failed to take the necessary time to properly resolve disputes over the still-undisclosed restitution amount and the number of victims.
Gearhart’s attorney also asked the appeals court to reassign the resentencing to another judge, claiming that Wright expressed a personal bias against Gearhart past proceedings. The appeals court rejected the request for reassignment.
As of Sept. 6, no resentencing hearing had been scheduled in Gearhart’s case, though a status conference is scheduled for Nov. 20. Gearhart remains in custody at the Fort Dix minimum-security federal prison in New Jersey.
This article appears in Sep 7-17, 2017.
Bull shot he ripped off a lot of folks knowingly!!
F##<k all you haters. This man has done soooooo much for the community it's unbelievable. Do you forget about all the houses he has built so people like you can have a roof over your & your children's head! Or the shopping centers you go to buy clothes, groceries etc. or how about the Atascadero high school track. Probably the field your kids play football on. Or where your wife runs the stairs. These are only a minuscule of things he has donated to the community. So next time your laying in your cozy bed in your beautiful home in Atascadero. Remember that more than likely you have that roof over your head because Mr Kelly Gearhart. You sad disgusting arrogant judge mental pricks only focus on negative things. Without kelly Gearhart. Atascadero would still be just a real mud hole instead of the beautiful landscaping and homes it has now! I admit has made a mistake and he is now paying for it. But I also no for a fact he had absolutely no intentions on ever hurting anyone or to steal people's money. When the housing market crashed he lost everything like so many of us out there. But sense he was such a major contractor and basically built Atascadero it hit him even harder. So yes he lost millions when that happened. I feel like he shouldn't have to spend a day in jail. All that is doing is pro longing the time he will be able to pay back his restitution money to the people he owes. Which I no for fact he will pay back cause he is a stand up guy and smarter than half you judge mental pricks talking sh!t about a man you never got to no. Just the rumors you choose to believe and you act like your 13 year old immature daughter playing the game telephone spreading more lies and rumors cause it helps you sleep better at night to kick people while they're down!