Receiver has mixed luck selling assets linked to Bay Area fraud scheme

The receiver of properties linked to SiliconSage Builders, accused of defrauding 250 investors, is having mixed success.

David Stapleton, granted receivership by a federal judge, unloaded an apartment complex in downtown San Jose for $53.5 million, netting about $10.7 million, and a residential development site in Fremont for $13.5 million, generating about $2.6 million, the Mercury News reported.

(One38, iStock)

Yet net proceeds from the $5.5 million sale of a San Jose property, seized through a foreclosure, went to the lender to pay off a portion of the mortgage, leaving those who were defrauded with nothing from the sale, the newspaper said. Six of seven office and retail condominium units in a mixed-used development in Santa Clara are set to be sold and a property in Fremont is under contract for $23 million.

SiliconSage and its principal executive Sanjeev Acharya were accused of fraud by the SEC in 2020. Many of the investors were from the South Asian community.

The complaint against SiliconSage said the company falsely told investors that some interest payments came from profits, although they actually were from new investors. It also said that Acharya “repeatedly declined capital redemption requests from certain investors” because he didn’t have enough money.

One victim, 81-year-old Charles Johnisee said he lost millions of dollars to Acharya through the sale of a property at 2101 Alum Rock. Instead of paying $9 million directly to Johnisee, Acharya persuaded him to enter a deal in which the retiree got a small amount from the Acharya-led affiliate.

In addition to the properties Stapleton is trying to sell, he’s also trying to complete the construction of two condominium projects. A 93-unit development called Savant at Irvington is planned for 42111 Osgood Road in Fremont and a 91-unit complex called The Almaden is planned for 1821 Almaden Road in San Jose.

“Construction is in full swing,” the receiver said in court papers.

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