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GriggerJones Indian Casino Corruption Article

GriggerJones Indian Casino Corruption Article

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Published by Nanci Meek
Article in Central California news agency re Robert Grigger Jones and Pe Ji HO Ta Casino Chris Molina and Dan Phillips San Luis Obispo
Article in Central California news agency re Robert Grigger Jones and Pe Ji HO Ta Casino Chris Molina and Dan Phillips San Luis Obispo

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Published by: Nanci Meek on Jul 28, 2010
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10/25/2012

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Tribe’s casino pact with white men suspect
April 28, 2009 12:26 am
By KAREN VELIE and DANIEL BLACKBURNA secret, decade-long, eight-phase strategy by a group of local investors – including one notorious individual now under investigationfor fraud – outlines plans for construction of a Indian gaming casino in San Luis Obispo County and anticipates huge profits for its principals, confidential documents obtained by CalCoastNews reveal.Those documents show that Kelly Gearhart, a North County developer with ties to Hurst Financial Inc. (HFI), is a primary partner inthe syndicate. Gearhart’s questionable land dealings, bankruptcies, and financial losses have caught the attention of law enforcement.Gearhart has linked up with attorney Grigger Jones, Chris Molina and Dan Phillips to sign a contract with the Salinan Tribe of SanLuis Obispo County to “develop a large community self-sustaining, green energy producing Indian reservation development,”according to the project’s business plan.Estimated cost of the development, according to the partners’ data, is $409 million. No specific location for the development has been identified, although four potential sites include one on Los Osos Valley Road andanother in the Santa Margarita area, according to records.
 
The four venture capitalists entered into a 41-page operating agreement in 2007, each retaining a 25 percent interest in the Pe-Ji-Ho-Ta LLC. The agreement stipulates that that the LLC will serve as the financing entity and consultant for the proposed casino.“The securities represented by this agreement have not been registered under the Securities Act of 1933, nor registered or qualifiedunder any state security laws,” according to the operating agreement.The tentative plans include:Phase 1 – Federal recognition and Pe-Ji-Ho-Ta funding/staffing – $4.3 million.Phase 2 – Purchase participation in Pe-Ji-Ho-Ta, 15 percent – $10 million.Phase 3 – Land options, 1,000 acres, and EIR process – $1.5 millionPhase 4 – Gaming construction and exercise land option one – $63.5 millionPhase 5 – Commercial construction and exercise land option two – $215 millionPhase 6 – Water treatment, waste water, and power – $20 millionPhase 7 – Resort and golf course construction – $55 millionPhase 8 – Construction of 100 homes and a 200 acre land option – $51 million“The first three phases are to be funded immediately to insure the timely payment of federal acknowledgement costs, operation of Pejihota, land acquisition, master planning, and EIR processes. The next phase assumes that the gaming facility is constructed as soonas possible to provide an income stream,” according to the business plan of the Salinan Tribe and Pejihota of San Luis Obispo, LLC.
 
The LLC members expect to reap 40 percent of all gaming proceeds for a period of seven years with an option to extend for anadditional 7 years. For all other developments, the LLC is to receive 50 percent of proceeds for 25 years with a 25 year extensionoption, according to the business plan of the Salinan Tribe and Pe-Ji-Ho-Ta LLC.The group projects earnings of approximately $600 million over the next 50 years, according to the group’s records. Currently thegroup is focusing on phase three, purchasing a large parcel of land, according to the group’s records.In an apparent attempt to keep their venture cloaked in secrecy, the group has transferred their LLC filing four times during the lastfew years. On Jan. 16, 2007, Gearhart filed a Pe-Ji-Ho-Ta LLC with the state of Nevada. Nine months later, Jones filed a Pe-Ji-Ho-TaLLC in California. Jones added “of San Luis Obispo County” to the name and refiled in California on Sept. 19, 2008. In February2009, Jones filed the Pejihota LLC of Nevada in his name.According to numerous sources, some members of the LLC and the tribe have boasted they have a politician poised to fast-track their  plans. Without a member of Congress pushing for approval, the procedures required to garner federal recognition for an Indian tribeusually take the Department of the Interior Bureau of Indian Affairs approximately 10 years to process.The group speculates the process will take one to two years, according to project plans.THE HURST FINANCIAL CONNECTIONLocal investors report being bilked out of millions of dollars by HFI and Gearhart. HFI president James Miller and his daughter,Courtney Brard, lured investors with promises of high interest, low loan to value rates, and assurances that funds were placed intosecured accounts with payments provided to developers as the work progresses.In October, Miller and Brard admitted to state regulators their complicity in fraud. The Federal Bureau of Investigation and the SanLuis Obispo County District Attorney’s Office have also mounted investigations, although no criminal charges have yet been filedagainst Miller, Brard, or Gearhart.More than 1,200 investors, primarily seniors, have placed nearly $100 million with Miller for funding construction loans. Accordingto the Department of Real Estate, Miller failed in his contractual agreement to protect investors by funding projects only as work was

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