The number of lawsuits filed against a prominent Grover Beach financial services owner has more than doubled in recent months as former investors say he has defaulted on loan repayments.
Fifteen separate lawsuits have been filed in San Luis Obispo Superior Court in the past six months against Al Moriarty, owner of Moriarty Enterprises, for unpaid loan payments on promissory notes totaling more than $2.5 million.
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, filed in late August, alleges that Moriarty was running a Ponzi scheme “designed to defraud community members out of their retirement and other savings.”
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The number of lawsuits represents only a small segment of the loans that Moriarty is juggling. He owes dozens of investors more than $13 million, according to Moriarty.
Moriarty, 79, who has been in the private money business for 25 years, said his downfall was because of the Great Recession.
A firm believer in the value of gold and real estate, Moriarty made a name by investing in both.
But when the real estate market declined and banks began to pull credit lines he had once relied on, his empire began to crumble.
“What the hell happened here?” Moriarty asked. “I had everything planned. I went from millions to now almost broke. But I believe in miracles.”
During a recent interview with The Tribune, Moriarty, a former Cal Poly football and basketball player who is in the Cal Poly Hall of Fame, sat proudly at his desk in Grover Beach while talking about his career. But the twinkle in Moriarty’s piercing blue eyes dims when he talks about being accused of fraud.
Moriarty’s attorney, Kirby Gordon, has filed a request with the court to consolidate the lawsuits into one hearing. A judge will decide on that request next week.
The first lawsuit, filed in April by San Jose attorney David Kraft on behalf of Floyd Cannon, is scheduled for a hearing in early January.
Moriarty failed to make the required $5,393 monthly payments to Cannon starting in January for a loan made to him by Cannon for more than $200,000 dating back to 2010, according to the lawsuit.
The lawsuit alleges that Moriarty intended to use the money for his own purposes, not to return it.
The majority of the lawsuits are based on the same premise: Individuals signed a promissory note with Moriarty that guaranteed them 10 percent annual interest paid back over five years through monthly payments.
The principal of those loans, and any interest, would become due in full if Moriarty defaulted on a payment, according to the lawsuits.
Moriarty said the arrangement worked well for decades — giving people a higher return on their money than other investment options and staying clear of what he considers a volatile stock market.
Moriarty, who prides himself on ingenuity, told The Tribune he used the loan money to create retirement plans for teachers, help them buy houses and assist seniors in bolstering their retirement funds.
“You gotta think big,” Moriarty said. “When I look at something, I’m a visionary.”
However, many of the lawsuits paint a different picture, alleging that Moriarty took advantage of ailing seniors and continued to take loans knowing that he could no longer guarantee repaying them.
“There is more to it than meets the eye,” he said. “It is ridiculous to point me out as a scam artist.”