In a courtroom packed with his victims Wednesday, convicted financier Al Moriarty vowed to re-pay investors who lost millions in what prosecutors have described as an illegal Ponzi scheme.
“I will spend the rest of my life making restitution to everyone,” said Moriarty, 81. “I plan to do it. That’s my life now.”
But a skeptical prosecutor said Moriarty, a Cal Poly athletics Hall of Famer, would be better off apologizing for what he’d done, not making more promises.
“Every single person in this courtroom has heard lots of promises from Mr. Moriarty before,” said Deputy District Attorney Steve von Dohlen.
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On Wednesday, Moriarty was formally given a five-year sentence for seven felony fraud charges, to which he’d pleaded no contest in August. With credit for time served and good behavior, he has 15 months left to serve.
The District Attorney’s Office said Moriarty defrauded people by persuading them to invest money — often their retirement savings — into a scheme that would garner 10 percent profits annually.
Although Moriarty pledged to put the investor money toward real estate, gold and loans to educators, the District Attorney’s Office said there’s no evidence to suggest he planned to invest anything on behalf of his clients. While some investors received monthly interest payments for a while, Moriarty stopped paying some investors in 2011 and all of them by 2012 as his money dried up.
Because of the large number of victims in the courtroom, Superior Court Judge Hugh Mullin asked some of them to sit in the jury box. Six investors offered statements describing how the crimes have impacted them.
The most emotional came from Silvio Del Giorgio, 87, who tearfully looked Moriarty in the eye and said, “You stole everything we had.” Del Giorgio, whose wife has Alzheimer’s disease, had to take out a reverse mortgage on his home to pay for his wife’s care after losing close to $200,000, he said.
Sandy Sylvester said she retired from AT&T after 45 years and entrusted Moriarty with her retirement money. Now Sylvester, who lost $300,000, has two liens on her house, and her Social Security has been garnished, she said.
“It makes me sick what he has done to me and so many other people,” Sylvester said.
Moriarty has shown no remorse, she added, before addressing him directly: “I hope your last years on this earth are pure hell.”
Debra Mann, 57, of Nipomo said she has been on workers’ compensation since she was 38 due to an injury. After losing money to Moriarty, she said, she has been without income since 2011. “He’s a liar and he’s a fake,” she said.
When he addressed the court, Moriarty said he had been a businessman with integrity for 60 years and maintained that his plan to make investors money was thwarted by a recession that damaged his line of credit.
“I definitely intended to take care of them,” he said of his investors. “I got caught in a situation.”
While many clients had been pleased with him for decades, he said, he felt “terrible” about those who lost money.
In an interview with county probation department officials, Moriarty said he would have figured out a way to pay the investors if he had more time, according to the department’s presentencing report obtained Wednesday. He said his business was “far from a scam.”
“I don’t lie. I don’t cheat. Check my record,” he said, according to the report. He said he only entered a no contest plea because his health was in jeopardy and he needed medical attention. “I had to compromise myself in order to get out of custody,” he said.
Moriarty was allowed to remain out of custody from the time of his plea until his sentencing.
The probation department reported there were roughly 170 victims, who lost anywhere from $3.2 million to $10 million. According to Moriarty’s bankruptcy filing, which lists 103 individual investors plus banks and other creditors, Moriarty has total debts of about $22 million.
Some of the individuals who lost money were more supportive of Moriarty in court Wednesday. Ann Nash said her mother, who lost money to Moriarty, has forgiven the defendant.
Jerald Greene didn’t speak at the hearing, but he submitted a letter to Moriarty’s bankruptcy court last week supporting him. “He is not a criminal,” wrote Green, who lost over $146,000, according to Moriarty’s bankruptcy records.
“He had the foresight to ‘think outside the box’ and provide a decent return on investment rather than the petty 1 percent the financial industry pays … Anyone expecting 10 percent in a 1 percent world knows there is a high risk and the worst victims are those who invested more than they could afford.”
After the hearing, Moriarty was handcuffed and remanded to jail. A restitution hearing was set for Dec. 17. Meanwhile, a bankruptcy court is also working to repay creditors. But there’s little money to repay all the losses, von Dohlen said.