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Calif. Indian American Real Estate Developer Reaches Partial Settlement in Fraud Case

Calif. Indian American Real Estate Developer Reaches Partial Settlement in Fraud Case

  • The development comes almost three months after the Securities and Exchange Commission filed an emergency action against Sanjeev Acharya and his company.

Bay Area real estate developer Sanjeev Acharya has reached a partial settlement with the Securities and Exchange Commission in a fraud case, the Mercury News reported, citing an order issued on March 24 by U.S. District Court Judge Susan Illston. This deal could help Acharya “pave a path for investors in his projects to recoup some of the money they placed with him,” the Mercury News reported.

On Dec. 21, 2020, the Securities and Exchange Commission filed an emergency action against Acharya and his company, SiliconSage Builders LLC, aka SiliconSage Builders, in connection with an alleged $119 million fraudulent offering. The complaint said “Acharya marketed these investments to South Asian friends and family and then sought referrals, expanding his investor base to over three hundred investors in the Northern California South Asian community.”

According to the SEC complaint, SiliconSage Builders and Acharya raised money from approximately 250 retail investors, most of whom were members of the Northern California South Asian community. He falsely described his company’s business as “profitable” and promised investors exorbitant returns. The complaint further alleges that from 2016 to 2019, all but one of SiliconSage Builders’ projects had significant cost overruns and did not generate enough money to pay investors the promised returns.

In meetings with investors around August 2020, Acharya acknowledged that he had made some errors over the years, the Mercury News report said.

“Mr. Acharya wishes to focus all of his efforts on supporting and working collaboratively with the receiver and the SEC to deliver value to Silicon Sage investors,” according to the statement from Acharya’s attorney, John Hemann of Cooley LLP, a Palo Alto-based international law firm, provided to Mercury News. “This settlement allows him to concentrate on that priority in the weeks and months ahead.”

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In February, Acharya, a federal court, authorized a receiver to seize control of his properties and operations. Earlier this month, U.S. District Court Judge Susan Illston ordered Receiver David Stapleton of Stapleton Group to take over all the assets of Acharya and his company, the Mercury News reported.Earlier in January, Acharya filed for bankruptcy “in an attempt to reorganize his finances,” the Mercury News reported. Citing documents filed with the U.S. Bankruptcy Court, the report said that in the Chapter 11 bankruptcy case, Acharya stated he had incurred “at least $100 million and as much as $500 million in debts.”

In meetings with investors around August 2020, Acharya acknowledged that he had made some errors over the years, the Mercury News report said. He should have been more transparent with investors, report said, citing the SEC’s fraud complaint. “I should have done it,” Acharya said at an investment meeting. “Back then, maybe my thinking was that everybody’s returns will come. What my mistake was, I wasn’t thinking of a downside scenario.”

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