Man Linked to Sonoma Valley Bank Arrested for Insurance Fraud

Condo developer allegedly filed a pair of insurance claims that overlapped after a 2008 fire at a project in Reno.

A man who is reportedly part of an ongoing investigation into loan defaults that led to the downfall of Sonoma Valley Bank was arrested Wednesday on charges that he filed overlapping insurance claims with two insurers after a 2008 fire at his condominium project in Reno, county and state authorities said.

Bijan Madjlessi, 55, of Marin County, was taken into custody by investigators from the California Department of Insurance’s Fraud Division at his office at the Marin Commons complex on Los Gamos Drive in San Rafael. Despite facing bail of $750,000, Madjlessi posted a bond of that amount and was released.

Madjlessi is also the subject of an ongoing federal probe looking into at least $24 million in loan defaults by his real estate companies, defaults that contributed to the downfall of Sonoma Valley Bank, which was closed by regulators last August and its assets sold to Westamerica Bank, according to the Santa Rosa Press-Democrat.

Madjlessi had insurance policies with both Fireman’s Fund of Novato, and Travelers Casualty and Insurance Co. for his Belvedere Towers condominium project, according to Dave Althausen, deputy press secretary for the state Department of Insurance.

The project caught fire on July 29, 2008, damaging two high-rise towers and a connecting building. The Reno Fire Department labeled the fire as suspicious, but no arson charges were filed, Althausen said.

Madjlessi filed claims one day after the fire with Travelers, whose policy covered the north tower, and Fireman's Fund, whose policy covered the entire site, and state investigators were alerted by Fireman’s Fund’s investigation unit in February 2010, Althausen said.

As a result of the overlapping claims, Madjlessi was paid twice for the damage to the north tower, although he told both insurance companies that there were no other policies covering the project, Althausen said.

Madjlessi was paid approximately $3.4 million by the two insurers, Althausen said, but should have only received approximately $2 million. He allegedly defrauded $1.4 million from the insurers.

“This is one of the largest cases we've seen,” Althausen said.

Madjlessi is charged with presenting multiple insurance claims for the same damages and making false statements in support of insurance claims, along with two related felony charges.

Marin County Deputy District Attorney Barry Borden said a criminal complaint has been filed and Madjlessi is scheduled back in court June 20. He remains out of custody on bail.

Madjlessi's attorney Douglas Horngrad refuted the allegations against his client.

"The charges are baseless," he said. "We will aggressively dispute the allegations."

Sonny Lynch June 28, 2011 at 08:15 PM
How about in the sense of setting up a drink company where it was never really important to succeed if the primary goal was to get payola to its intended target ? how much is the question.
Ralph Hutchinson June 28, 2011 at 08:24 PM
Assumption is FDIC-Inspector General and Special Investigations Group-TARP have the numbers. The lid blew on Fuerza and SVB Directors had Melland terminated February 2010, the handling officer for Bijian Madjlessi, the largest borrower largely responsible for the bank's failure.
Ralph Hutchinson June 29, 2011 at 03:52 AM
SVB--Shareholders sue Directors and Execs claiming negligence. The gruel is looking like "target paste" now. Directors are: Nicholas, Switzer, Downing, Brangham, Page, Pistole, Hitchcock, and Sangiacomo. Execs targeted: Cutting Just posted on the internet. http://www.pressdemocrat.com/article/20110628/BUSINESS/110629471/1350?Title=Sonoma-Valley-Bank-shareholders-seek-money-from-insurer
Sonny Lynch June 29, 2011 at 03:11 PM
New Press Demo story confirms ongoing FDIC investigation of some Directors and Officers.. http://www.pressdemocrat.com/article/20110628/BUSINESS/110629471/1350?Title=Sonoma-Valley-Bank-shareholders-seek-money-from-insurer
Ralph Hutchinson June 29, 2011 at 03:56 PM
The PD article above states FDIC losses are at $14 million yet all previous indications pegged losses at $10.1 million? Have their been revisions? Are they result of these Bijian Madjlessi assets? Sonoma Storage Emporium (SSE, LLC) a partnership between Bijian and Glenn Larsen, another construction project only partially competed (third floor remains a cold shell girders and hanging wires). This asset was sold December 2010 for about $5 million and the amount owed according to court documents was in the $15 million range. Net of accrued interest and penalties this could account for several million dollars more than original estimates. Hernandez spokesperson for the FDIC was referenced in the article for loss estimate, a trusted source. SSE, LLC (4201 Santa Rosa Ave, Santa Rosa) was highly suspect of being participated (loan syndications) with the now failed Charter Oak Bank of Napa where $5 million of Sonoma Valley Bank toxic assets were realized of the total $13 million that ultimately failed this institution. All Bijian Madjlessi related deals. The third in the trilogy of trilogies was Courtside Village affiliates on Sebastopol Road in Santa Rosa discussed in length in the January 23rd PD article.


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