Sale of 91 San Jose condos could compensate victims of $119M fraud

Investors allegedly defrauded of $119 million by Sanjeev Acharya and his SiliconSage Builders may be closer to recouping some lost funds through the sale of 91 nearly completed condominiums in San Jose.

A court-ordered receiver is overseeing the sale of units in the five-story complex tied to the fraud at 1821 Almaden Road, SiliconValley.com reported.

The condos are listed for sale as a way to raise cash to help the investors recoup at least some of their investment, the unidentified receiver said in a court filing in San Francisco.

“All units have been completed,” the receiver stated in a late February court filing. “Site work has been completed, and all driveways, sidewalks and asphalt improvements are finished.”

In 2020, the Securities & Exchange Commission charged Acharya and SiliconSage with defrauding hundreds of investors out of $119 million.  

The Sunnyvale-based company allegedly raised funds from 250 investors, many in the South Asian American community, by falsely claiming it was profitable, then promising exorbitant returns and covering shortfalls with other people’s money.

“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,” the SEC said in an announcement. “Acharya, as alleged in the complaint, misled investors into believing the payments they received were derived from SiliconSage Builders’ profits when, in reality, SiliconSage Builders and Acharya had used new investor funds to pay earlier investors.” 

In March 2022, Acharya and his real estate firm reached a partial settlement with the SEC to allow creditors and investors to recoup some of their money. He and his company didn’t admit wrongdoing. 

A federal judge overseeing the case shoved all of Acharya’s assets, including his sprawling Bay Area real estate empire, into court-ordered receivership. The receiver has tried to untangle the mess.

In the fall of 2022, two residential buildings under construction by Acharya and his company in Fremont and San Jose were the subject of a court-ordered receivership to allow creditors and defrauded investors to recover losses.

The projects include the 91-unit condominium building at 1821 Almaden Road in San Jose, and a 93-unit condominium complex at 42111 Osgood Road in Fremont.

Nearly all of the Fremont units have been purchased. “The Osgood condominium project is complete, with 92 units having closed escrow and one still being marketed for sale,” the receiver stated in the court filing.

As of February, the San Jose condominium complex just needed a few finishing touches. 

“The receiver continues to support the sales effort of the units,” according to the filing. “The receiver’s team has coordinated signage for marketing purposes and the development of a sales website. As of the date of this report filing, 38 units at Almaden are under contract.”

Five units have been sold, according to the news site.

It isn’t clear how much — if any — of the proceeds from the sales of the pieces of the Acharya real estate empire will reach the defrauded individual investors. Lenders on the properties are receiving a big chunk of the proceeds from the property sales.

In September, Sunbelt Rentals paid $5 million for land in East San Jose once slated to contain some of the 800 homes proposed by Acharya and his SiliconSage Builders.

— Dana Bartholomew

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