More than a year after Al Moriarty was extradited to San Luis Obispo County from his home in Washington state, the former Grover Beach financier pleaded no contest to all counts against him for what prosecutors say was a $22 million Ponzi scheme.
Moriarty, 81, former owner of Moriarty Enterprises, accepted a deal with prosecutors Monday, pleading no contest to seven felonies, including grand theft by embezzlement, selling securities using false statements, and selling securities and investments without a license.
In exchange for the plea, prosecutors dismissed criminal enhancements for white collar crime, which allows Moriarty to serve his sentence in County Jail instead of state prison.
Under the agreement, Moriarty will be sentenced to five years in jail. Sentencing is scheduled for Sept. 17 in Superior Court. He will be released from custody with an ankle bracelet monitor while he awaits that sentencing so that he may seek treatment for a medical condition.
“My client is 81 years old,” noted Jeff Stulberg, Moriarty’s attorney, after the hearing. “The plea agreement which we reached with the DA gives Mr. Moriarty the prospect of the ability to spend a portion of the remainder of his life out of custody with the opportunity to make restitution to the folks that lost money with him, which has always been his intent and desire.”
Stulberg added that Moriarty is in poor health and, had he gone to trial, a minimum sentence would likely have been more than 10 years. Deputy District Attorney Steve Von Dohlen, who prosecuted the local case, said the plea deal served the interests of justice and avoided a lengthy criminal trial in which many of Moriarty’s victims would have had to testify.
“Our office is very pleased with the resolution in this case. It allows the victims to achieve some sort of closure,” Von Dohlen said.
Moriarty’s victims — many of them retirees and teachers — are awaiting the results of Moriarty’s ongoing bankruptcy case, which was filed in Washington in December 2012. It was not immediately clear how Monday's plea will affect the bankruptcy proceedings.
While the full number of Moriarty’s victims isn’t clear, 30 people have filed civil lawsuits against him.
The plea deal requires Moriarty to pay restitution to the victims, but Von Dohlen said it is unlikely victims will ever recoup total losses. Though his assets were frozen following the bankruptcy filing, there were few assets left after Moriarty borrowed heavily from his few remaining assets just prior to criminal charges being filed.
Moriarty claimed some $18 million in debt in a recent bankruptcy filing.
“I think the victims all understand that reality,” Von Dohlen said. “They know that they can’t get back the many things Moriarty took from them, but I think they’re glad at this point they can move on.”
Moriarty has remained in custody at County Jail in lieu of $5 million bail as his case has progressed through the courts, despite attempts by his former attorneys to have bail reduced.
Von Dohlen said that with the time Moriarty has already served while awaiting trial, it is likely he will physically serve between one and two years in the jail.
Moriarty was a well-known supporter of the Cal Poly athletic department and was inducted into the Football Hall of Fame for his performance in the Mustangs’ undefeated 1953 season.
In 2009, Moriarty wrote a $625,000 check to the university to fund the Alex G. Spanos Stadium’s electronic scoreboard. A banner ad bearing Moriarty’s former business name remained on the scoreboard Monday.
Cal Poly officials declined to say whether the university will return the donation or remove the ad.
“The bankruptcy court case that involves the advertisement on our scoreboard is separate from the criminal court proceedings you referenced,” Cal Poly spokesman Matt Lazier wrote in an email to The Tribune. “Because of the ongoing nature of that bankruptcy case, we cannot provide further detail at this time.”