Former Banker Charged with Defrauding Real Estate Investors

Allison Tussey —  August 24, 2011 — Leave a comment

James Hurst Miller Jr., 63, Paso Robles, California, was charged with federal fraud and money laundering offenses for allegedly bilking victims who invested into Central Coast real estate projects”ā€¯money that was siphoned off for other purposes.

Miller, the former president of the Atascadero-based Hurst Financial Corp., was charged in a four-count criminal information with mail fraud, wire fraud, money laundering, and making a false statement to a bank.

The information alleges that Miller solicited investments in the Beacon Road and Vista Del Hombre real estate development projects in Paso Robles, as well as the Salinas River real estate development project in Templeton, and that the solicitations were fraudulent because the funds were not used to develop those projects. The information alleges that after obtaining investors’ funds, Miller used most of the money for other purposes.

The information specifically alleges that Miller failed to disclose that he was using new money solicited for the Beacon Road project to make interest payments to older investors, as well as to investors in other real estate development projects. Miller also allegedly failed to disclose that he used proceeds from investors in the Salinas River project to pay off loans relating to a different real estate development project, and that money invested in the Vista Del Hombre project was used to develop other real estate projects. Finally, the information alleges that Miller aided and abetted false statements made to Heritage Oaks Bank relating to collateral for a loan application.

An information contains allegations that a defendant has committed a crime.

Every defendant is presumed innocent until and unless proven guilty.

The mail fraud and wire fraud charges each carry a statutory maximum penalty of 20 years in federal prison. The money laundering count carries a statutory maximum penalty of 10 years in federal prison. The charge of making a false statement to a bank carries a statutory maximum penalty of 30 years in federal prison. Therefore, if he were to be convicted of all four counts in the information, Miller would face a maximum sentence of 80 years in federal prison.

The case against Miller is the result of an ongoing investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation. The San Luis Obispo County District Attorney’s Office provided substantial assistance in the investigation.

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Allison Tussey

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