Al Moriarty’s trial will take place after the preliminary hearing, which is expected to finish sometime next week.
Jessica Burger
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In June, the San Luis Obispo County Sheriff’s office filed a warrant for Al Moriarty’s arrest on seven felony charges, including securities fraud and scheming to defraud.
Moriarty, who is a Cal Poly Athletics Hall of Famer and donated $625,000 for the Alex G. Spanos Stadium scoreboard, continued to fight $5 million bail at the San Luis Obispo Superior Court on Oct. 30 and Nov. 1.
He was dressed in an orange jumpsuit, chained around the waist and ankles — Judge Dodie Harman had granted his request to leave the left hand free so he could take notes.
He made his third court appearance on Oct. 30 represented by his new attorney, Scott Whitenack.
District Attorney Steve von Dohlen brought in two witnesses involved in the investigation of the case to testify to the validity of the charges and previously-set bail amount.
The first witness was from the state department for business oversight, Douglas Gooding. He testified as a court-qualified expert in legislation and security fraud.
Gooding defined legislation and security fraud as “the providing or supplying of money or enterprise, with the expectation of profit,” and that for this kind of activity to be lawful, a person must “be qualified with the department by permit, notification or by coordination.”
Moriarty Enterprises advertised itself as offering financial services and advisement.
Among Moriarty’s charges, he is being held for allegedly selling unregistered and unsecured promissory notes without a license, and with scheming to defraud his investors in a Ponzi scheme.
Gooding, who had previously reviewed parts of the case, said he “found no record or any notice, filing or claim of exemption” for Moriarty or Moriarty Enterprises and “there was no record ever of Moriarty as a financial adviser.”
He said all he found in Moriarty’s name was an expired broker registration, which had been cancelled in 2005.
The second witness was a senior investigator from the District Attorney’s office, A.J. Santana. He testified to the evidence of the case, and had questioned the defendant and helped carry out search warrants.
Santana said Moriarty claimed he conducted business by investing people’s money in gold and real estate, which he claimed to be secured by a $6 million life insurance policy.
“Moriarty described his program as the perpetual pump,” Santana said.
“He told me that he had primissory notes out there equivalent to $12 to $13 million,” Santana said. “He told me he could do whatever he wanted with it, because it was a personal loan to him.”
Santana said Moriarty had gotten people to lend him money by promising monthly payments to his investors, often with interest ranging between 10 and 12 percent.
Allegedly, Moriarty claimed “the investments were not securities; they were loans.”
According to Santana, Moriarty began buying gold in the 1980s, but lost it entirely as of April 2011.
He is allegedly responsible for losing money for more than 12 San Luis Obispo victims, with many of the individual losses totaling more than $100,000.
“He told me he has this insurance business, and that because those payments come in so regularly, he uses the credit to supplement payment to his investors,” Santana said.
When discussing one victim, Santana said “he was only to pay $24,000 on the $400,000 invested because the banks had closed his credit lines.”
“He said he carried $6 million in life insurance, and ‘If anything bad happened to me, it would pay these people off,’” Santana said.
But when Santana went through documents seized from Moriarty’s homes, he said he found the $6 million life insurance policy — only it listed his wife, Patty Moriarty, as the sole beneficiary, and none of the investors.
“The only person listed on any purchases or sales was Mr. Moriarty, and not any of the investors,” he said.
For the past five months, Moriarty has been sitting in jail on seven felony charges related to his former business, Moriarty Enterprises. The trial will take place after the preliminary hearing, which is expected to finish sometime next week.