California Real Estate Fraud Report

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Guilty Verdicts against Three Defendants in Sonoma Valley Bank Real Estate Fraud

Two former bank executives and a Santa Rosa attorney were convicted by a jury for running a $35 million real estate loan scam that caused the failure of Sonoma Valley Bank in 2010, along with the retirement savings of the bank’s elderly investors.

The three defendants who were convicted of at 25 different counts or more, including conspiracy to commit bank fraud and money laundering, were the bank’s former president and chief executive officer, Sean Cutting, 48, formerly of Sonoma; ex-vice president and chief loan officer Brian Melland, 48, of Santa Rosa; and attorney David Lonich, 63, of Santa Rosa.

Lonich was the attorney for the late Marin County developer Bijan Madjlessi. Prosecutors alleged the bank knowingly allowed Madjlessi to use straw borrowers to get access to loans for which he wouldn’t otherwise have qualified and to finance an extravagant lifestyle.

Last year the Federal Deposit Insurance Corporation (FDIC) settled with Cutting, Melland and former CEO and director Mel Switzer for $5.4 million in a civil action.

Read the original article in the Marin Independent Journal.

© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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