East Bay spa dealer sentenced to jail


We started investigating last year. After that, spa dealer Jim Gerard was arrested on grand theft charges. Now, this week, Gerard was sentenced in Alameda County Superior Court to 16 months behind bars. And he's ordered to return nearly $135,000 stolen from his customers.

The empty concrete slab in Peggy McGregory's backyard is a constant reminder of the hot tub that isn't there.

She paid $6,000 cash for the spa nearly two years ago -- she never received it.

"I wanted relief from my aches. I have arthritis, I have fibromyalgia," said McGregory.

Sally and Milton Hughes don't have their hot tub either and Doug and Jan Graham of Castro Valley are left with just an empty slab.

Each of them had paid thousands of dollars to a spa dealer in Castro Valley, but never got their hot tubs, and never saw their money again.

"They say you took their money and they don't have their hot tub," said 7 On Your Side's Michael Finney.

"Okay, well I did not take their money and not deliver their hot tub. it's in the works right now," said Gerard.

But more than a dozen more people came forward too, saying they paid cash and got nothing -- except a signature 'thank you' gift: a rubber duck and bath scent.

"Are you shutting down because it's beginning to look a little empty in here," said Finney.

"No, we're not shutting down," said Gerard.

"You're not shutting down?" asked Finney.

"No we're not," said Gerard.

But Gerard's colorful dealership did shut down. His legacy now is the graffiti on the door.

"I know they're concerned, nobody's out to get them, they will get their spa," said Gerard.

Prosecutors told 7 On Your Side at least 20 people bought spas from Gerard and never got them. That got Gerard in hot water.

He was charged with 14 felonies and pled guilty to one count of grand theft. Gerard has said he didn't intend wrongdoing but simply ran into financial problems.

Customers talked to us about Gerard's conviction.

"It says I got soaked by Jim Gerard because we did get soaked," said Sally Hughes.

"I don't feel optimistic that I'll ever get my money from him," said McGregory.

"We're out $6,900 which is a very hard loss," said Hughes.

"It put a stop to it. It can't change what's already happened," said McGregory.

Gerard got a 16-month sentence, but the judge delayed his actual incarceration for six months to give Gerard time to pay restitution to his customers. Gerard is currently out on $40,000 bond.

There's another hearing in July to see if indeed anybody got any money back. We'll be watching too.

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