Heritage Oaks Bank has joined the list of creditors who say that now-bankrupt former North County lender Jay Hurst Miller owes them money, according to a recent filing with the U.S. Bankruptcy Court in Santa Barbara.
In the filing, bank Executive Vice President William Raver declared that Heritage Oaks made a $250,000 personal loan to Miller in January 2008.
The loan was due in January, with 8.6 percent interest. And there was no collateral to secure the loan, according to documents the bank filed with the court.
Formerly Atascadero-based Miller was once a hard-money lender with more than $100 million in loans outstanding and 1,000 clients.
He filed for Chapter 7 bankruptcy protection in August 2009.
Miller also faces about a dozen lawsuits filed since 2008 charging him with fraud and operating a Ponzi scheme.
Although he has not been formally charged, Miller is being investigated by the Department of Justice on suspicion of racketeering, money laundering and interstate mail fraud, according to a seizure warrant on Miller’s home obtained by the FBI.
Because of that warrant, he is also under a court order restraining him from taking money from the recent sale of his home, according to documents in a pending lawsuit filed against him by investors David Rios and Murray Powell in May 2008.
“I don’t think anyone knew he was in trouble at the time the loan was made,” Raver told The Tribune. “He was well known in the community and we do make personal loans, as a community bank that’s something we do.”
Miller’s company, Hurst Financial, was not a client of the bank, although the bank did lend money on projects funded by that firm, such as Vista del Hombre and The Printery in Atascadero, Raver said.
As for whether or not the bank expects to get its money back, Raver said, “Obviously he’s under attack from a lot of directions. Certainly the fact he’s in bankruptcy never bodes well. We have to file our claim and get in line like everyone else.”
So far, more than $1.3 million of official claims have been made in court against Miller. About $3.1 million in claims has been filed against Hurst Financial in its separate bankruptcy case. Miller stated that the company had neither assets nor liabilities at the time he filed in August of this year.
Miller had stated in his personal bankruptcy filing that he had about $68,000 in assets, but owed more than $10.8 million to his creditors.
However, 492 Hurst Financial creditors have joined together in alleging that Miller and his company Cuesta Title, as well as borrower and former Atascadero developer Kelly Gearhart, defrauded them in real estate dealings.
They are seeking more than $60 million in damages, according to lawsuits filed in San Luis Obispo Superior Court and U.S. Bankruptcy Courts in Ohio and Santa Barbara.
— Melanie Cleveland
City sites to help local merchants
The city of San Luis Obispo has launched two new Web sites in an effort to bolster revenues for local merchants.
ShopSLO.org and DineSLO.org list all retail shops and restaurants in San Luis Obispo with locations and phone numbers, searchable by both category and name.
Retailers and restaurateurs in the city can create an account on the sites to enhance their listings and add promotions, fliers, photos, and a link to their own sites.
The sites also have parking and transportation information and an online exploration of city neighborhoods.
— Julia Hickey