California Real Estate Fraud Report

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27
Oct

Sonoma Valley Bank Fraud Trial for Former Executives Begins

Federal prosecutors began presenting their case against two former Sonoma Valley Bank executives and a Santa Rosa attorney, accusing them of “throwing good money after bad” by extending tens of millions of dollars to a now-deceased developer through third parties.

The defendants are former president Sean Cutting, 48, former VP and Chief Loan Officer Brian Melland, 48, and attorney David Lonich, 63. Lonich was the chief counsel to Bijan Madjlessi, a Marin County developer accused of using straw buyers to get $44 million in construction loans.

Cutting, Melland and former CEO and director Mel Switzer settled with the FDIC last year for $5.4 million.

The alleged scheme put the bank out of business and cost 1,000 shareholders steep losses.

Assistant U.S. Attorney Alex Tse is prosecuting the case for the U.S. Attorney’s Office for the Northern District of California.

Read the original article in the Santa Rosa Press Democrat.

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