Former Grover Beach financier Al Moriarty remains in San Luis Obispo County Jail with bail set at $5 million after a second failed attempt at a bail reduction.
San Luis Obispo Superior Court Judge Dodie Harman said Thursday she was not presented with any change in circumstance that would lead her to reduce the bail amount on seven felony charges that include fraud and embezzlement.
Santa Maria attorney Scott Whitenack — who is now representing Moriarty after meeting him in County Jail while serving time for a drunk-in-public arrest — argued that “$5 million bail is equivalent to no bail at all” because of Moriarty’s inability to pay it. Whitenack called it unconstitutional.
He asked Harman on Thursday to reduce Moriarty’s bail to $240,000, arguing the amount of money his client allegedly embezzled has not been clearly defined.
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However, A.J. Santana, a senior investigator with the District Attorney’s Office, testified that more than $5 million is owed to investors and additional investors could be owed up to $23 million.
Whitenack asked to have six people speak in Moriarty’s defense Thursday in an attempt to demonstrate his character and prove he was not a flight risk.
Harman did not allow those people to speak, instead asking them to submit written statements to the court.
Whitenack also argued that Moriarty’s medical issue — a bad hip — should be considered in reducing his bail.
Instead, Harman asked that a doctor at County Jail see Moriarty. Harman also said she would consider allowing Moriarty to receive the medical treatment needed but remand him back to jail.
Moriarty, 80, was arrested in May on felony charges alleging that he defrauded investors and embezzled funds over a five-year period.
He is charged with seven felonies: one count of 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; one count of 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.
Before his arrest, Moriarty filed for bankruptcy in January, owing more than $22 million to creditors and dozens of San Luis Obispo County residents who lent him money.
Prior to the criminal case, 19 separate civil lawsuits were filed against Moriarty in San Luis Obispo Superior Court for 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 alleged Moriarty was running a Ponzi scheme “designed to defraud community members out of their retirement and other savings.”
Moriarty is scheduled to return to court Wednesday for a preliminary hearing.