A federal grand jury in Los Angeles has indicted a real estate developer on fraud and money laundering charges for allegedly swindling investors out of millions of dollars in a Ponzi-type scheme, the Federal Bureau of Investigation said on Friday.
Kelly Gearhart, 50, who lived in Atascadero at the time of the alleged crimes and now resides in Wadsworth, Ohio, solicited investments in specific real estate development projects, court documents state.
They add that he told victims that their investments were loans and would be paid back with interest and were secured by specific lots.
However, prosecutors say Gearheart used victims' funds to support his lavish lifestyle, to develop different real estate projects and to make interest payments to other investors.
Prosecutors said that while this is a "multi-million-dollar case," the government has not yet determined the specific amount of losses suffered by victims. Court documents state that the crimes occurred between 2004 and
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