Real Estate Developer Arrested for Insurance FraudInsurance Fraud — By Trace America on June 2, 2011 at 2:19 PM
A Marin County developer, Bijan Madjlessi, was arrested on June 1st on suspicion of insurance fraud. His arrest was connected to what was said to be a “suspicious” fire at one of his failed real estate projects, which are said to have resulted in large loan defaults at the now obsolete Sonoma Valley Bank. He was released after posting $750,000 in bail.
As noted in The Press Democrat, and by the California Department of Insurance, Madjlessi was arrested at his office in San Rafael on allegations that he filed duplicate insurance claims for the fire damage.
According to an investigation by the state insurance department, he is charged with four felonies for allegedly defrauding two insurance companies out of $860,376.
“It’s one of the largest cases we’ve seen,” said Dave Althausen, a spokesman for the Department of Insurance.
The fire that caused the claims happened in Reno on July 29, 2008. It was ruled “suspicious” by investigators from the Reno Fire Department.
As noted by multiple sources who were interviewed by investigators, Madjlessi is also the subject of an ongoing federal probe, which is looking into loan defaults –made by his companies– that devastated Sonoma Valley Bank and other lenders.
“I’ve been interviewed by the FBI and IRS multiple times as part of the larger federal investigation,” said Jon Heinson, a longtime business associate of Madjlessi who wrote one of the insurance policies the developer is suspected of defrauding.
Madjlessi’s companies are said to have defaulted on at least $24 million in loans that they got from Sonoma Valley Bank, whose assets were sold to Westamerica Bank after it was closed by regulators last August. The bank was not involved in the Reno fire.
“We intend to proceed on this case,” said Barry Borden, chief deputy district attorney for Marin County.
The July 2008 fire occurred at a real estate project that was supposed to take a former Reno casino and its two towers of hotel rooms and redevelop it into dozens of condo units.
Heinson, a Redwood City insurance broker who cooperated in the state investigation, said Madjlessi called him as the building was burning and filed a claim the next day.
“I said, ‘Bijan, you can’t make the same claim on two different policies,’” Heinson said Wednesday. “If you do report it to two different insurance carriers, you have to report that or it’s insurance fraud.”
Claims were made by Madjlessi on two different policies the day after the fire. According to an affidavit filed by the district attorney however, he told both insurance companies that he was only filing one claim.
This post is authored by Trace America.