Al Moriarty, the Grover Beach financial services owner accused of fraud and embezzlement, made his first appearance in San Luis Obispo Superior Court on Monday morning.
Moriarty, owner of Moriarty Enterprises, was assigned a public defense attorney, Ron Crawford, who asked that the arraignment be continued to Wednesday. Superior Court Judge Jacqueline Duffy granted the request.
In court, when asked by Judge Duffy if he understood the charges filed against him, Moriarty said, “Yes, but I don’t understand why.”
Moriarty, 80, remains in San Luis Obispo County Jail with bail set at $5 million.
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He is charged with seven felonies including fraudulently offering or selling securities; three counts of selling securities with false statements or omissions such as telling investors their money would be secured by gold, real estate and his own life insurance policy; grand theft by embezzlement of investor funds; and two counts of acting as an investment adviser and offering or selling securities without the required licenses.
In addition, two enhancements were included for an aggravated white-collar crime and excessive taking of more than $3.2 million.
Moriarty was arrested May 5 at his home in Bremerton, Wash., after an extensive investigation by the San Luis Obispo County District Attorney’s Office and the California Department of Corporations, with assistance from the FBI and the California Department of Insurance.
Moriarty, a longtime Central Coast resident and Cal Poly alumnus who is in the Cal Poly Athletics Hall of Fame, faces 19 separate civil lawsuits filed against him in San Luis Obispo Superior Court over unpaid payments on promissory notes.
The claims, which vary in amount, allege fraud, elder abuse and breach of contract by not repaying loans as promised and a lack of required security licenses needed to make investments. One lawsuit alleges that Moriarty was running a Ponzi scheme “designed to defraud community members out of their retirement and other savings.”
The majority of the lawsuits are based on the same premise: Individuals signed a promissory note with Moriarty that guaranteed them 10 percent annual interest paid back over five years through monthly payments.
The principal of those loans, and any interest, would become due in full if Moriarty defaulted on a payment, according to the lawsuits.
In November, Moriarty, who was in the private money business for 25 years, told The Tribune his downfall was because of the Great Recession.
A self-described believer in the value of gold and real estate, Moriarty made a name by investing in both. But when the real estate market declined and banks began to pull credit lines he had once relied on, his empire began to crumble.
In January, Moriarty filed for bankruptcy, owing more than $22 million to creditors and dozens of San Luis Obispo County residents who loaned him money.