Construction company owner admits fraud
Embattled construction company owner Mark Melchiori was set to begin a court trial Thursday in a years-old fraud and embezzlement case but prosecutors announced Friday that he has taken a plea deal.
Mr. Melchiori pleaded guilty to one count of felony diversion of construction funds, one count of felony prevailing wage fraud, and one count of felony unlawful money transmission, according to a Santa Barbara County District Attorney’s Office news release.
He also admitted a special allegation that the amount taken was more than $100,000.
In 2016, Mr. Melchiori was charged with 47 felony counts, including 15 charges of diversion of construction funds, unemployment insurance fraud and wage fraud.
He faced 47 years in prison if convicted of those charges. He could get up nine years and four months in prison under the deal with prosecutors.
Mr. Melchiori will appear in Santa Barbara County Superior Court before Judge James Herman for sentencing on Jan. 8.
The investigation into Mr. Melchiori’s defunct company, Melchiori Construction, began in 2012 when the Santa Barbara County Sheriff’s Department received a fraud complaint from film producer Robert Zemeckis.
Mr. Zemeckis claimed he paid Melchiori Construction several hundred thousand dollars to remodel his home, but Mr. Melchiori used the money for his own purposes.
The sheriff’s office launched an investigation with assistance from the District Attorney’s Office and the California Department of Industrial Relations, Division of Labor Standards.
The District Attorney’s Office found Mr. Melchiori used Mr. Zemeckis’ money to “finance his own lavish lifestyle and to fund other projects,” according to the news release.
Investigators also found Mr. Melchiori was “underpaying his workers on public works projects to maintain his lifestyle, and that he had been funneling money through various companies to cover up his crimes.”
In 2012, Mr. Melchiori and Melchiori Construction filed for Chapter 7 bankruptcy when Rabobank filed a $1.3 million lawsuit against his ex-wife, Heather Melchiori, in an attempt to collect on a loan from January 2010.
Then Santa Barbara Bank and Trust filed a $9 million suit against the Melchioris in October 2012, attempting to seize property to recover losses from a series of loans to the company, including a $6.5 million credit line.
Mr. Melchiori also was sued by his stepmother, Linda Melchiori, who attempted to collect on a $100,000 loan she made to his company.
Creditors allege the Melchioris filed for divorce to avoid paying their debts by transferring property to Heather Melchiori.
Bankruptcy filings from Nov. 26, 2012 say Mr. Melchiori listed nearly $9.6 million in assets but $13.8 million in liabilities.