Business

Tuesday, Jun. 02, 2009

Biz Buzz: FBI seeking assets of Atascadero's Hurst Financial president

Warrant issued just as president of defunct lending firm was to sell his Templeton home

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The FBI has issued a seizure warrant for the Templeton home of James “Jay” Hurst Miller, president of the now-defunct Atascadero hard money lending company Hurst Financial.

The move came less than two days before Miller and his wife, Laurel Miller, were to sell the family home for $1.3 million.

The FBI says it is seeking up to $200,462 in proceeds from the sale of the house because of allegations against the seller, listed as Laurel G. Miller Family Trust, that include racketeering, money laundering and interstate wire fraud, according to the warrant document.

The move was made despite no formal criminal charges being brought against Miller or his wife. Neither the FBI nor a spokesman of the U.S. Department of Justice would comment on why the warrant was issued.

After reviewing the affidavit(s) given her by FBI Special Agent Dieter Will-komm, however, the federal judge who issued the order declared that the FBI had established probable cause, a prerequisite to issuing a warrant, according to the warrant document.

The warrant said Willkomm had “reason to believe that … there is now certain property which is subject to forfeiture to the United States.”

The seizure of property by law enforcement authorities is generally permissible when they have evidence a property is connected in some way to illegally gained money, according to the FBI’s official Web site.

The amount of $200,450 is the same amount owed to Washington Mutual Bank, which helped finance the Millers’ home in 1999.

Miller had transferred the property to his wife’s trust in a postnuptial agreement dated June 19, 2008, according to court documents. The following month, the state Department of Corporations accused Miller and his daughter, Courtney Brard, of “tending to work fraud” on his investors, and suspended the company’s license to solicit money with his real estate-backed securities.

The seizure warrant ordered the FBI to take over the property within 10 days after May 27, the date the warrant was issued, and to prepare a written inventory of the property. Fidelity National Title was also ordered to deliver the $200,450 in a cashier’s check, made payable to the U.S. Marshals Service.

Calls to the title company were not returned. However, the buyer of the home, Aram Youssoufian, a doctor in Southern California, told The Tribune the escrow is still proceeding and the sale should be closed within the next couple of days.

A day before the warrant was issued, San Luis Obispo Superior Court Judge Roger Piquet issued a temporary restraining order to prevent Jay Miller from receiving his half of the house sale proceeds, based on investors’ lawsuits claiming Miller owes them millions of dollars because of his lack of fiduciary oversight and alleged fraudulent dealings with Atascadero homebuilder Kelly Gearhart.

Miller and his wife could not be reached for comment. Calls by The Tribune to their attorneys, Robert Jones and Glen Lewis, were not returned.

Miller and Brard were formally accused of fraud last year by the state Department of Real Estate and the Department of Corporations, according to documents filed by the regulators. The company was handling about $100 million of investor money through real-estate backed securities. Much of the money went to finance a number of Gearhart properties, some of which never got built. Gearhart, a former Atascadero citizen of the year, was allowed by Miller and Brard to improperly refinance properties to the detriment of Hurst investors, the state alleges.

— Melanie Cleveland

• • •

A few tickets remain for Thursday’s Atascadero Economic Forecast to be presented by Bill Watkins, executive director of the economic forecast project at UCSB.

Watkins will present the latest information and statistics on the current and future economy of the city over breakfast at the Pavilion on the Lake from 7:30 to 11 a.m.

Industries such as retail, hospitality, banking and real estate will be covered. Local speakers include City Councilwoman Roberta Fonzi, who will share her thoughts on local real estate; John Rogers, superintendent of the Atascadero Unified School District; and Larry Ward, president of Heritage Oaks Bank.

Tickets are $40 per person. Contact the chamber at 466-2044 for reservations or more information.

— Dawn White