Cal Poly football Hall of Famer and longtime financier Al Moriarty deposited close to $10 million of investor money into his personal bank account, which he used to pay bills, fund construction at his home and pay other investors, a prosecution investigator testified Friday.
Moriarty, 80, of Grover Beach, faces seven fraud-related felonies for an alleged Ponzi scheme the District Attorneys Office says cost investors more than $12 million. The well-known Cal Poly booster, who is in court for a preliminary hearing this week, has pleaded not guilty.
A member of Cal Polys undefeated football team in 1953, Moriarty began his financial services business while attending Cal Poly in 1954. Through his business, he made millions, once donating over $620,000 to Cal Poly so it could purchase a scoreboard for its football field. But in 2012, he ran out of money, he told investors, who were left in the lurch.
Several investors filed at least 19 civil lawsuits, and their inquiries to the District Attorneys Offices Economic Crime Unit alerted investigators there, said A.J. Santana, an investigator with the District Attorneys Office, who testified Friday.
During his testimony, Santana said Moriarty sold investors on loans which he said would be lent to educators for home purchases that would be repaid in monthly payments at 10 percent interest over five years. Moriarty told investors he would back their investments with his personal gold and real estate investments and should anything happen to him his personal life insurance policy.
But the investments Santana described fit a Ponzi profile, where investor money merely pays previous investors.
Some investors received initial payments. But, beginning in 2011, those stopped.
Santana said Moriarty had just one account his personal account which is where the investor money wound up.
Over $10 million was deposited into his bank account, Santana testified.
While some of that money came from personal investments and Social Security, more than 98 percent of the deposits came from investors, Santana added.
Many of the more recent checks from investors, Santana said, were used to pay earlier investors. The investors included a 91-year-old couple who gave Moriarty $525,000, and a retired couple who invested more than $600,000. Moriarty approached the latter couple with a request for two further loans, Santana said, for $29,000 and $10,000, which he was to repay at 12 percent interest.
They told me they never heard from Al Moriarty again and never received any money back from him, Santana said.
In November 2012, Moriarty told The Tribune he did no wrong and was a victim of a faltering real estate market.
What the hell happened here? asked Moriarty at that time. I had everything planned. I went from millions to almost broke. But I believe in miracles.
Moriarty, who hasnt been able to post $5 million bail, told The Tribune a year ago that his investment arrangements had worked for years and that he wasnt a crook. There is more to it than meets the eye, he said. It is ridiculous to point me out as a scam artist.
On Friday, Santana said Moriarty wasnt even licensed to offer financial advice.
Moriarty played both football and basketball at Cal Poly. As a football player, the Long Island native was most known as a tackle, though he also played quarterback, guard and kicker. A well-known booster, he was the first president of the Mustang Athletic Fund. Meanwhile, his companys name Moriarty Enterprises was prominently featured on the scoreboard at Alex G. Spanos Stadium.
A father of five, he also coached football and basketball at Mission Prep in San Luis Obispo.
Now in jail, he faces criminal charges and numerous lawsuits.
His hearing, which will determine if theres enough evidence to continue the case, continues next week.