43°
Clear
TUE
 67°
 39°
WED
 70°
 42°
THU
 67°
 41°
FRI
 62°
 48°
SAT
 60°
 47°

Secret informant helped Sonoma Valley Bank probe

A secret informant wearing an electronic wire helped federal agents build their case against two former Sonoma Valley Bank executives and two borrowers accused of defrauding the bank before it collapsed in 2010, according to an affidavit unsealed in U.S. District Court.

The document provides the most detailed account made public so far of the conspiracy alleged in a grand jury indictment against Marin County developer Bijan Madjlessi, Santa Rosa lawyer David Lonich, and former bank executives Sean Cutting and Brian Melland.

Madjlessi was killed in a car wreck discovered Tuesday off a steep Marin hillside. The three remaining defendants are scheduled to appear in court Friday.

A Look Back At Sonoma Valley Bank's Collapse

X

The informant, an unnamed construction contractor who borrowed money from Sonoma Valley Bank, recorded conversations with Madjlessi and Lonich in 2011 as they tried to calm his fears about testifying before the federal grand jury, according to the document.

The degree of detail imparted by Madjlessi and Lonich is evidence of their participation in the alleged scheme, as well as their apparent effort to coach the informant about his testimony, according to the affidavit filed by a federal agent investigating the case.

The indictment, unsealed April 9, accuses the four defendants of bank and wire fraud, money laundering and conspiracy. Thirteen of the 29 charges carry maximum penalties of 30years in prison and $1 million fines, according to the U.S. Attorney's Office. The defendants, if convicted, also could be subject to asset seizures.

All four men entered not guilty pleas in the case and were freed on $250,000 bonds. None agreed to be interviewed after a brief appearance April 18 before District Court Judge Susan Ilston in San Francisco.

Attorney Steven M. Bauer, who appeared with Madjlessi, questioned the charges. "How fair is it for the government to try to blame four gentlemen for the Marin real estate crash?" Bauer said outside court last month.

On Tuesday, Bauer said Madjlessi "firmly believed he would defeat his accusers."

The case centers on two loans totaling $9.4 million made by now-defunct Sonoma Valley Bank to a corporation called 101 Houseco in 2009, shortly after the bank obtained an $8.65 million bailout from the federal government's Troubled Asset Relief Program.


comments powered by Disqus
© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  + |  Place an Ad
Switch to our Mobile View