California Real Estate Fraud Report

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18
Apr

Real Estate Developer, Attorney and Bankers Indicted for Loan Fraud

Four men have been indicted by the office of U.S. Attorney Melinda Haag for loan fraud involving failed Sonoma Valley Bank.

Bijan Madjlessi, 58, of Mill Valley; attorney David Lonich, 59, of Santa Rosa; former Sonoma Valley Bank President Sean Cutting, 44, of Sonoma; and former Chief Loan Officer Brian Melland, 45, of Santa Rosa were arrested and later freed on $250,000 bond each.

Madjlessi is a real estate developer who defaulted on a $30 million loan he obtained from a different financial institution for his development called Park Lane Villas East in Santa Rosa. After defaulting, he and Lonich are alleged to have applied for a loan with Sonoma Valley Bank under a false name. According to the indictment, Cutting and Melland knew the loan was being submitted using a straw buyer name and still urged SVB’s loan committee to approve the loan, the purpose of which was for Madjlessi to buy back his defaulted loan.

The four men are charged with 22 counts, including one count of conspiracy to commit wire and bank fraud, one count of bank fraud, six counts of wire fraud, one count of conspiring to make false statements to a bank, one count of conspiring to launder money and 12 counts of money laundering. U.S. District Judge Susan Illston will be the trial judge.

Read the original article in CBS Local.

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