| On Monday August 4, 2014, Albert Moriarty, Jr., pled no contest to the seven felony criminal charges against him for fraud and embezzlement stemming from his operation as owner and president of Moriarty Enterprises in Grover Beach CA, from 2007 through 2012. A "No Contest" plea is treated the same as a "Guilty" plea in a criminal case. Moriarty also admitted eight enhancements and special allegations that were filed against him, including an excessive takings enhancement alleging that he caused over $3.2 million in losses.
As part of his plea, Moriarty will be sentenced to 5 years of prison custody, to be served locally pursuant to the Criminal Justice Realignment Act of 2011. His sentencing is scheduled for Wednesday morning September 17, 2014, in Department 9 of the San Luis Obispo County Superior Court. Moriarty will also be ordered to pay full restitution to all his victims in the criminal case. Moriarty has also agreed to transfer all of his present and future property and assets to the Court for victim restitution. Victims who would like to make a statement at the September 17 Sentencing Hearing or write a letter to the Court should contact the District Attorney’s Office by phone or e-mail at one of the contact points listed below.
Filing of Charges and Arrest: The San Luis Obispo County District Attorney's Office previously announced that Albert Moriarty, Jr., president and owner of Moriarty Enterprises, doing business in Grover Beach, CA., was placed under arrest Sunday, May 5, 2013, in Kitsap County, Washington. Moriarty was arrested on a $5 million arrest warrant which was issued May 3, 2013 by the Honorable Judge Barry T. LaBarbera of the San Luis Obispo County Superior Court. Moriarty was thereafter booked into Kitsap County Jail, Washington, and then later transported to San Luis Obispo County.
A criminal complaint was filed against Moriarty on May 3, 2013, after an extensive investigation by the San Luis Obispo County District Attorney's Office and California Department of Corporations, with significant assistance from the FBI and the California Department of Insurance. In the criminal complaint, Moriarty is charged with one count of Fraudulent Practices in the Offer and Sale of Securities in violation of California Corporations Code section 25541, three counts of Material Misstatements and Omissions in the Offer and Sale of Securities in violation of California Corporations Code section 25401, one count of Embezzlement of Investor Funds, and two counts of Acting as an Investment Advisor and Offering and Selling Securities Without Required Licenses from the California Department of Corporations, in violation of California Corporations Code sections 25230 and 25110. Two enhancements alleged in the criminal complaint also include an "Aggravated White Collar Crime" enhancement and an enhancement for "Excessive Taking" of at least $3.2 million.
Arraignment, Bail Reduction Hearings, and Preliminary Hearing: On Wednesday, May 29, 2013, Al Moriarty was arraigned on the charges in the Criminal Complaint, entered a not guilty plea and denied the special allegations and enhancements. On June 12, 2013, Moriarty's request to have his bail amount reduced from $5 million was denied by the Honorable Judge Jacqueline Duffy. On Wednesday October 16, 2013, attorney Scott Whitenack replaced attorney Tom Allen as Moriarty's attorney of record. On October 24, 2013, Moriarty's Motion to Reduce Bail was denied by the Honorable Judge Dodie A. Harman. On Tuesday, November 5, 2013, Al Moriarty was held to answer as charged in the Criminal Complaint by the Honorable Judge Dodie A. Harman, following four days of Preliminary Hearing testimony and argument. Moriarty remains in custody with his bail at $5 million as previously set.
Arraignment on the Information: On Monday, November 18, 2013, Al Moriarty was arraigned on the Criminal Information filed against him, following his having been held to answer on all charges by the Honorable Judge Dodie A. Harman on November 5, at the conclusion of Moriarty's Preliminary Hearing. At his November 18 arraignment, Mr. Moriarty entered a not guilty plea and denied the special allegations and enhancements in the Criminal Information and waived time for trial. Moriarty's latest request for bail reduction was denied by Judge Harman on December 4, 2013.
On Wednesday January 29, 2014, Attorney Scott Whitenack withdrew from the case as Mr. Moriarty's Attorney of Record. On Wednesday March 19, 2014, the Honorable Judge Teresa Estrada-Mullaney appointed local criminal defense attorney Jeffrey D. Stulberg to represent Mr. Moriarty. Moriarty remains in custody pending the outcome of his case.
Contacting the Didstrict Attorney's Office: Updated information about the case will continue to be available on the San Luis Obispo County District Attorney's Office website at http://www.slocounty.ca.gov/DA.htm under "Moriarty Enterprises Prosecution." Alleged victims in the case with questions may also contact the District Attorney's Office Hotline set-up especially for this case and other Securities Fraud Cases at (805) 781-1053 to leave a message, or send an e-mail to: da_Moriarty_Enterprises@co.slo.ca.us
Due to several inaccuracies contained in the August 1 - August 8, 2013 edition of "New Times," a local publication, victims and others interested in the prosecution of Albert Moriarty who read the article were misinformed about the District Attorney's efforts to preserve victim restitution in the Moriarty case. The New Times article has since been updated and changed.
In summary, all of Mr. Moriarty's assets are frozen in order to preserve assets for victim restitution at the conclusion of the case, except six pieces of real property. These six properties were removed from the Order freezing assets because they each had negative equity and were subject to preexisting jurisdiction and Orders of the Federal Bankruptcy Court for disposition. These properties were removed specifically to prevent further costs, expenses and losses to victims and creditors, and to enable compliance with the Federal Court's Orders
The details regarding the July 10, 2013 modification of the Temporary Restraining Order are set forth below.
On July 10, 2013, the Honorable Judge Jacquelyn Duffy signed an Order at the request of the District Attorney's Office modifying the Temporary Restraining Order ("TRO") that was previously issued in the case on May 3, 2013. The TRO freezes Mr. Moriarty's assets in an effort to preserve them for victim restitution at the conclusion of the case, upon the defendant's conviction. The TRO freezing Mr. Moriarty's assets still remains in place. The July 10 Order modified the TRO by removing six pieces of over-encumbered real property from the TRO list. Mr. Moriarty's assets which are still frozen include bank accounts, personal property, and other real property beyond the six parcels which were removed. The six properties which were removed from the TRO on July 10 were all properties which were already under the jurisdiction of the Federal Bankruptcy Court before the filing of the criminal case and the issuance of the original TRO on May 3, 2013.
Additionally, the Federal Bankruptcy Court had issued orders regarding the disposition of these six properties which preexisted the filing of the criminal case and TRO. The subsequent TRO issued in our state court potentially conflicted with the previous order of the Federal Bankruptcy Court.
More importantly, these six properties were determined by the District Attorney's Office and by the Bankruptcy Court to each have negative equity -- meaning that more money was owed to the secured creditor(s) for each property than the property was worth (commonly referred to as "upside-down."). Pursuant to California Penal Code section 186.11, which is the statute that enables the District Attorney's Office to seek a freeze order for the defendant's assets, such secured interests take legal priority ahead of victim restitution when a defendant's property is liquidated pursuant to that statute. In addition, all expenses incurred in the criminal case for preserving and maintaining such properties under the TRO while the criminal case is pending, as well as costs incurred during the sale and liquidation of assets, are paid for first out of the assets for victim restitution. In short, there would be no value left in the properties which could be used for victim restitution, and the cost to maintain and ultimately liquidate the properties would reduce the amount of money available for victim restitution at the conclusion of the case. The victims here would have suffered further net loss of restitution had the District Attorney's Office not proceeded as it did.
Therefore, in an effort to prevent further losses to victims and creditors, the District Attorney's Office sought to remove these six negative equity properties from the TRO so they would not be a drain on future potential victim restitution, and also so the previous orders of the Federal Bankruptcy Court could be complied with.
Throughout the process to remove these six negative-equity properties from the TRO list, all noticing requirements for the modification of the TRO were followed. Additionally, at this time the vast majority of individuals identified as investors and alleged victims in the Moriarty criminal case are included in the Federal Bankruptcy proceedings, either listed individually or as represented by their attorneys.
The District Attorney's Office also maintains this dedicated webpage with information regarding the criminal case, as well as a telephone hotline number, assigned office staff, and a dedicated e-mail address to which questions and requests for information can be sent, all as means of additional communication about the case.