There is enough evidence to pursue a criminal trial for a Grover Beach financier charged with fraud, a judge ruled Tuesday, meaning the former Cal Poly football Hall of Famer will remain in jail on $5 million bail.
Al Moriarty faces seven felony charges for allegedly using investor money to pay his personal bills and previous investors. The 80-year-old Moriarty, who has been in the finance business for nearly 60 years, has pleaded not guilty.
To continue its pursuit of the charges, the District Attorney’s Office had to present sufficient evidence during a four-day preliminary hearing, which concluded Tuesday. During his arguments, Deputy District Attorney Steve von Dohlen said Moriarty collected more than $12 million from investors, who were expecting to earn interest off their loans. Instead, von Dohlen said, Moriarty used their money to pay some of his bills, including his cable and health insurance bills, and construction at his home.
“This is the classic definition of embezzlement,” von Dohlen said.
Moriarty also failed to tell investors he planned to use their money to pay other investors, von Dohlen argued in court, and misrepresented himself as someone who was licensed to offer financial advice. While he promised investors that their money was secured by his collection of gold and real estate and his life insurance policy, their investments weren’t backed by any of those, von Dohlen said.
Moriarty’s attorney, Scott Whitenack, suggested that the loans offered were not securities but, rather, private loans that did not require a license. (Moriarty let his license expire in 2005, Whitenack said.) The prosecution did not present anything in writing proving the investors signed off on secure notes, he added.
“There were no documents to be found with respect to their allegations,” he argued.
While Whitenack suggested the loans were private debt transactions, von Dohlen said, Moriarty presented the loans to clients as securities, then “misdirected, misspent and misused” the funds entrusted to him.
Moriarty is one of several local residents to be charged with fraud during a still-touchy economy the past five years. The most high-profile case, involving former Atascadero Citizen of the Year Kelly Gearhart, is expected to go to trial in federal court in February.
Like Gearhart, Moriarty had been in business for years with good standing in the community until alleged Ponzi-like activity — paying old investors with new investor money — led to criminal charges. A member of Cal Poly’s undefeated football team in 1953, Moriarty went into business while still in school and sold insurance to graduated football players in the 1950s. When he donated more than $620,000 for Cal Poly to erect a new scoreboard at Alex G. Spanos Stadium in 2009, the scoreboard debuted with a taped message from Moriarty, who served as an honorary coin tosser with his wife, Patty, before the game against Sacramento State that day.
Now, with Cal Poly set to host Sacramento State again this Saturday, Moriarty will remain in jail unless he can post bail. His next court date, an arraignment, is set for Nov. 18.