Saratogan is charged again with fraud and laundering
By Kara Chalmers
On Feb. 22, a federal grand jury indicted Saratogan Nemat Maleksalehi for mail and wire fraud, as well as money laundering. According to the U.S. attorney's office for the Northern District of California, Maleksalehi acquired $1.3 million in subsidies meant for the poor in Contra Costa County, through a housing scheme that lasted from 1991 to 1996.
Maleksalehi, who also goes by the names Matt Madison and Matt Malek, defrauded the federal Department of Housing and Urban Development of money and property, according to the indictment.
"He used money from HUD for unauthorized purposes," said Assistant U.S. Attorney Amber Rosen. "A substantial portion was the housing subsidies."
Maleksalehi, a real estate magnate who lives in a large hilltop home in Saratoga, recently admitted to similar state charges. On Jan. 31, he either pleaded guilty or no contest to the state charges of welfare fraud and felony grand theft in Santa Clara County Superior Court, for collecting $212,000 in housing subsidies. Maleksalehi faces up to three years in state prison for these charges.
The new federal charges--six counts of mail fraud, five counts of wire fraud and three counts of money laundering--stem from Maleksalehi allegedly submitting false financial records to HUD for the Pittsburg Plaza, a 126-unit multifamily housing project in Pittsburg, Calif., that he owned. Maleksalehi's real estate firm, the Los Altos-based Housing Network, managed the project and HUD subsidized it with federal Section 8 rental subsidies for low-income families.
According to the federal indictment, Maleksalehi submitted false invoices, contracts, expense reports and tenant records, and that he used the monthly Section 8 payments--as well as funds for major maintenance on the project--for personal expenses unrelated to Pittsburg Plaza. The indictment also charges that Maleksalehi engaged in financial transactions with the money from HUD to conceal his control of it, submitted false expenses to both HUD and to an accountant, and allowed ineligible tenants to live in the building.
Maleksalehi could receive up to five years in federal prison for each count of mail or wire fraud, plus a $250,000 fine and restitution. Each of the three money laundering charges carries up to 20 years in federal prison plus a $500,000 fine, or double the amount of money laundered, whichever is greater.
At press time, Maleksalehi was set to appear before U.S. Magistrate Judge Patricia Trumbull on March 2 in U.S. District Court in San Jose for a reading of the charges and for bail to be set.
Maleksalehi, 56, who has four children who attend Saratoga schools, became known to Saratogans when he made an offer to the city's Parks and Recreation Commission Jan. 10 to build, manage and pay for an indoor gym for the city. At that time, the commission directed Maleksalehi to prepare a more detailed proposal for the gym for the commission's Feb. 7 meeting. But Maleksalehi's did not show up at the commission's February meeting. According to Cary Bloomquist, the city staff liaison to the commission, Maleksalehi never submitted a revised plan to the city, nor did he contact the city, either by phone or in writing.
"I know he hasn't called me, and as far as I know he hasn't called anybody at the city of Saratoga, period, regarding anything to do with the gym or any other issues," Bloomquist said. "As far as the position of the Parks and Recreation Commission regarding Mr. Madison, when he failed to attend our last meeting and when he failed to provide the information he had promised he would, our obligation to him, at that point, was terminated. There is no existing obligation to Mr. Madison to invite him back or to entertain the ideas that he might have for a gymnasium."
Maleksalehi's attorney, Edward Nino, said his client's offer of Jan. 10 still stands, and said that he could not comment further on pending litigation.
"What is going on is, he's perfecting the final design of this particular gym concept and is continuing to go on with working with the city of Saratoga in order to effectuate that plan," Nino said.
Bloomquist said that if Maleksalehi asks the commission to consider his proposal in the future, it would be up to the commission rather than staff to make a decision. Parks and recreation commission chairwoman Judy Alberts, when asked about the proposal, put it succinctly. "I think we're pretty much done with him," she said.
|
Saratoga, California Since 1955
