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Man suspected in Sonoma Valley Bank fraud found dead

Bijan Madjlessi

Published: Wednesday, May 7, 2014 at 9:16 a.m.
Last Modified: Wednesday, May 7, 2014 at 9:16 a.m.

A Marin County developer, who once owned the Greenbriar Apartments in Petaluma, and who is at the center of a federal fraud investigation into the collapse of Sonoma Valley Bank was found dead Tuesday two days after his family reported him missing.

Bijan Madjlessi died in a car crash on a weekend trip to Stinson Beach, where he had headed for a Sunday morning walk and never returned, said Steven M. Bauer, an attorney representing Madjlessi.

Authorities found his gold Mercedes sedan about 320 feet down a ravine off Shoreline Highway about 2 miles from the coast and Muir Beach.

Fire and rescue personnel helped recover a body from the wreckage late Tuesday afternoon, CHP Officer Andrew Barclay said. Using fingerprint analysis, the Marin County coroner confirmed late Tuesday that Madjlessi's body was found in the car. An autopsy is scheduled Wednesday.

Madjlessi, 58, was accused of bank and wire fraud, money laundering and conspiracy in a federal grand jury indictment unsealed April 9 following a three-year investigation into the implosion of Sonoma Valley Bank. He pleaded not guilty to the charges and was free on bail.

Madjlessi was last seen Sunday morning driving away in his gold Mercedes SL550. His family reported him missing Sunday night and authorities issued an alert Sunday to Bay Area law enforcement agencies, stating that Madjlessi was considered a potential suicide risk.

Bauer disputed any possibility that Madjlessi took his own life.

“Completely to the contrary,” Bauer said. “He's an optimistic person. He was completely convinced that we were going to win all of his cases, and that the real estate market was turning.”

Madjlessi lived with his wife, Biganeh, in a nearly 7,000-square-foot gated home on the edge of Mill Valley near Tiburon. He left home at about 7:45 a.m. Sunday, saying he was going to Stinson Beach for a walk, Bauer said.

When he failed to meet an ailing friend for a 2 p.m. visit and could not be reached by cellphone, his family began to worry and launched a search, said Bauer, who was among those who drove the roads between Madjlessi's home and the coast in hopes of finding him.

Marin County sheriff's deputies searched locations identified by family members and regional airports for the missing car, Lt. Jamie Scardina said. They also reviewed the developer's bank accounts and found no sign that Madjlessi had withdrawn money, Scardina said.

Then around mid-day Tuesday, a passerby reported seeing a car about 320 feet down a steep ravine off the west side of a winding stretch of Shoreline Highway/Highway 1 between Panoramic Highway and the Green Gulch Farm Zen Center, the CHP's Barclay said.

The wreckage landed in a thickly wooded area, forcing crews to lower saws and other equipment to clear away the vegetation before they could bring the car out.

Members of Madjlessi's family went to the site of the Shoreline Highway crash, Bauer said.

Bauer said he was unsure how his client's death would affect the federal criminal case. A representative for the U.S. Attorney's Office did not return calls or emails Tuesday.

A longtime developer with numerous projects in the North Bay, Madjlessi borrowed millions of dollars from an array of banks and was unable to make loan payments even before he found himself the target of a federal investigation.

Madjlessi and his business partners defaulted on at least $34 million in loans made by Sonoma Valley Bank, which was closed by regulators in 2010 and its assets sold to Westamerica Bank. By 2011, the bank and its loans to Madjlessi were the focus of a federal fraud investigation.

The probe resulted in a grand jury indictment against Madjlessi, Santa Rosa attorney David Lonich and two former Sonoma Valley Bank executives, CEO Sean Cutting and Chief Loan Officer Brian Melland.

The 29-count indictment charged the men with suspected conspiracy, bank and wire fraud, money laundering, obstruction of justice and other violations still pending in U.S. District Court.

All four men entered not guilty pleas and were out of custody on $250,000 bail. The three remaining defendants are scheduled for a status conference in court Friday.

In a separate case, Madjlessi was accused of insurance fraud in connection with two separate insurance claims he made after his Reno condo-conversion project was damaged in a 2008 arson fire. A trial is scheduled for October.

Bauer, an attorney with Latham & Watkins in San Francisco, said he worked almost daily with Madjlessi on the federal case and other pending litigation. He said he rued the fact that his client “died before he could clear his good name in our courts.”

“He firmly believed he would defeat his accusers,” Bauer said.

He said Madjlessi's legacy included “thousands of quality homes,” generous support of schools and charities, and a life as a “giving and protecting husband, father, son, brother and grandfather.”

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