|By Patrick S. Pemberton, The Tribune (San Luis Obispo, Calif.)|
|McClatchy-Tribune Information Services|
If her grandparents' testimonials weren't enough to persuade her to invest with the Cal Poly Hall of Famer, the gold rings on Moriarty's fingers seemed to vouch for his success.
"He looked like the real deal," said
In an effort to prove his acumen to investor
"That looked pretty good to me," recalled Powers, 72, of
But just as fool's gold misled many Gold Rush miners, Moriarty's gold was both alluring and deceptive. And dozens of investors — mostly seniors, people with
While some received interest payments for a while, eventually many lost life savings, retirement money and homes in what the
The 81-year-old Moriarty, who pleaded no contest to seven counts of felony fraud last month, will be sentenced Wednesday when he faces a 5-year term. While a judge will order restitution and a bankruptcy trustee has been selling Moriarty's property to pay creditors, individual investors aren't likely to recoup much — if any — of their losses.
"I've accepted that there's going to be no financial recovery," said
Long ties to
Moriarty's roots in the county date to 1953, when he played on a
Dick "The Tank" Mannini, a freshman on the team when Moriarty was a senior, said Moriarty was supportive of his teammates.
"Friendly," described Mannini, another
While still a student at
As his personal fortunes grew, Moriarty lived in a 4,700-square-foot home in
Using his connections
As a financial adviser who sold annuities, Moriarty had always used his
"He said he did that because employment in education is very stable," said
Prosecutors say Moriarty's problems began in 2007.
Even though he wasn't licensed to sell securities — a violation of the law — he encouraged investors to take money from their retirement, savings and mortgage accounts to invest in a more lucrative plan that would earn 10 percent interest annually for five years, paid in monthly installments. After investors "loaned" him money, he told them he would invest their money in gold, real estate and home loans for
"After several years of annuities, he told us we could make more money by going with this 10 percent, five-year loan," Powers said.
Many of those investors were initially pleased with results, in some cases seeing steady 10 percent annual profits for a few years.
"I would say we were happy for about seven years with the returns we were getting," said Powers, a
Retired from the aeronautical and space industry, Powers attended a seminar Moriarty put on about 10 years ago. Initially, he decided to invest in annuities, which were earning 3 to 5 percent per year.
Burdick began investing seriously with Moriarty in 2007, after he sold his mother's house for
"When I sold my mom's house is when Al made contact with me and told me, 'Here's what we can do,'" Burdick said.
Moriarty came through initially, paying off a five-year loan at 10 percent annual interest, allowing Burdick to put money in a family trust that helped pay for his mother's care and helped build retirement funds for him and his two sisters.
When Moriarty investors were making money, several of them wrote glowing testimonials for Moriarty's ads, which appeared in
"The most impressive characteristic about
"Not once has any of his advice been incorrect," wrote
Reached by phone, Smay said she didn't want to comment about Moriarty, though she said she now wishes she had not invested with him. She lost
After receiving lucrative returns on early investments, many rolled money from one Moriarty loan to the next, hoping — as Burdick said — "you'd get a bigger pot at the end of the rainbow."
"I had no idea what he invested in," Burdick said. "As an investor, you probably should know that kind of information, but that was the trust I had in Al. I didn't need to know that; Al would take care of it."
Her grandmother, a once-prominent banker, knew Moriarty through a business relationship. Familiar with his work, she and her husband, who once owned a carpet supply business, had invested
"I went to see him, and he promised me the world,"
If Moriarty could put her
'In over his head'
Moriarty's plans were genuine, said
"I don't think he ever intended to defraud or screw anybody," Stern said, noting that one of the real estate purchases Moriarty made had valuable water rights that could have paid off richly during the current drought.
"I also think he got in over his head."
The investments would be backed, Moriarty said, by his gold, real estate and a
But he sold his gold to help pay the
"He got caught in the downturn and perhaps made some stupid decisions," Stern said.
By the time Moriarty purchased scoreboard naming rights in 2009, the bankruptcy trustee alleges, Moriarty was already insolvent. Unaware of his financial straits, investors continued to provide him loans, often swayed by the testimonials, Moriarty's experience and his
"He'd been here 50-some odd years," Phillips said. "It sounded like he had a lot of rentals and investment properties."
Fiscally conservative, he and his wife had built a nest egg over 40 years. With Moriarty's encouragement, they took the money they had invested with
Burdick, who had invested
Powers invested around
While Moriarty "was a BS'er" who "liked being a big deal," Powers said, "I never got the sense that he was crooked. And, you know, that's the mark of a good con man."
Payments suddenly stop
According to Moriarty's preliminary hearing, he once told
"He would pay me like clockwork,"
"I told my grandfather, 'Don't do it, Grandpa — that's fishy,'"
Around that time, Moriarty gave Powers several checks, but told him not to cash them.
"He said, 'Hey, I'm in a pinch. I can't pay you,'" Powers said, noting that Moriarty asked him to be patient. "I said, 'Well, OK — do your best, Al.'"
"Obviously, it's a very heinous thing he did to people," Huss said.
The couple, who lost
But Moriarty asked the Joneses and others to be patient, saying he was looking to sell the land with water rights.
"He was pinning his final hopes on a piece of property in
Around that time, Moriarty also stopped payments to
Moriarty had regularly paid the couple for more than two years, according to court records. Ken, a 91-year-old World War II and Korean War veteran who retired as a school repairman in
Having lived through the Depression,
"It was the most money I ever had in my life," said
While they had always been cautious with money, Moriarty seemed to have a good plan.
"He was paying 10 percent, and people were happy with that,"
"Probably one of the most difficult things I ever had to do in my life was to tell my two sisters what happened with Mom's money," he said. "And to this date, I have not heard one peep from Al."
While the bankruptcy trustee will seek to repay creditors, Moriarty doesn't have enough assets to pay his debts, which total
"The amount of money we've raised is nothing compared to what the creditors are owed," said
While sales of Moriarty's property have raised "very little," according to Rigby (around
As a result, investors are resigned to having lost large amounts of money.
"It took away all the cushion I had for retirement," Powers said. "Now I'm dependent on
Fortunately, Powers never used his home to invest with Moriarty. Phillips remembers Moriarty encouraging people to refinance their homes to invest more money with him.
"I'm just so thankful that we said, "We don't really need to do that,'" he said. "My heart goes out to the people that did do that."
Phillips is one of several investors who filed lawsuits against Moriarty. But taking legal action cost him even more.
"It annoys me that I'm out about
"My grandfather is devastated," she said.
Still, some are more forgiving.
After Moriarty was charged with felonies,
"I don't think that man ever did anything willfully to hurt anybody," Lintz, who lost
Her husband agrees, saying Moriarty's fall from grace was caused more by the poor economy than fraud.
"He had nothing but good intentions," said
His wife's children eventually would have inherited the money, he said.
Mannini, Moriarty's former teammate at
"I think when the real estate market went belly up, that's when this business started," said Mannini, who lost
"I think he did an awful lot of things for the university," said Mannini, who now lives in
Those who think Moriarty's name is a disgrace to
"It's better than soaking up the sun up there in
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