SAN JOSE. The court-appointed trustee is making slow progress in a wide-ranging bid to sell Bay Area’s real estate empire to a developer who is central to a fraud case with alleged victims in the hundreds.
Of the 13 properties listed in a recent federal lawsuit, only five have sold.
The five transactions generated a total of $14 million in revenue that could potentially be distributed to investors in projects designed or proposed by scam developer Sanjeev Acharya and his company Silicon Sage Builders.
However, this amount represents only a fraction of the $119 million that about 250 people have invested in projects planned or built by Acharya, according to a 2020 fraud complaint by the Securities and Exchange Commission.
The SEC accused Acharya and Silicon Sage of a slew of fraudulent activities that federal regulators allege defrauded hundreds of investors, many of whom were South Asians.
A federal judge placed the Silicon Sage property into administration. A court-appointed trustee began a lengthy process trying to salvage the value of a collapsed and bankrupt real estate empire by finding buyers for the property.
The gap between what investors have paid and the net proceeds of the five completed deals to date paints a bleak picture for the people who provided the Acharya and Silicon Sage with the funds for his real estate ventures.
Completed sales are a large residential development in downtown San Jose on Balbach Street that sold for $53.5 million and generated $10.7 million in net proceeds.
Also sold were: three retail units on the ground floor of a condominium, netting $177,000; commercial space on the ground floor of an apartment complex on Matilda Avenue in Sunnyvale, which generated a net income of $142,000; the sale of a single-family home in Hayward, which generated a net proceeds of $414,000; and the sale of a residential development at 42021 and 41965 Osgood Road in Fremont’s Irvington neighborhood for $13.5 million, with net proceeds of $2.6 million.
The results of the transactions and the residual amounts of money that were generated from the transactions were outlined in a Dec. 3 statement by David Stapleton, the federal judge-appointed trustee who is overseeing Acharya’s fraud case.
Court records show uncertainty looms over ongoing efforts to dispose of at least eight other Silicon Sage and Acharya properties in the Bay Area.
Court records show that still-unsold properties face many challenges before they can be bought:
– 3780 Peralta Boulevard, Fremont. The site, described in full as a mixed-use project, has attracted a buyer who is willing to pay $23 million for it. Net proceeds could be $2 million.
– 1313 Franklin Street, Santa Clara. The site is a mixed-use development with retail space on the ground floor and living space upstairs. Potential buyers have made offers to buy at retail, but the lender on the site must agree to concessions for the site.
– 1665 Alum Rock Ave., San Jose. The land required for the construction of a multifunctional residential and commercial complex aroused the interest of the buyer. The lender must make concessions before the sale can take place.
– 560 S. Mathilda Avenue, Sunnyvale. There was an offer for the first floor of commercial and office premises. The price is less than the amount of the loan for commercial space, which means that the lender must make concessions.
— 2101-2149 Alum Rock Avenue, San Jose. These lots represent part of a large property that will be required for the development of a project of 796 residential units, as well as shops and restaurants. If a buyer is not found, the property’s lender can confiscate it through foreclosure, destroying the investors.
— 42111 Osgood Road, Fremont. The unfinished residential complex Savant at Irvington, consisting of 93 apartments, is located on this site. The court was asked to resolve numerous disputes over control over the future of this project.
– 1821 Almaden Road, San Jose. A partially built residential project called The Almaden is being built on this site, with 91 units. The court is asked to resolve numerous disputes over control over the future of this project.
— 17374 Walnut Grove, Morgan Hill. Uncertainty has arisen regarding the ownership of this property, which is undeveloped land.
“The manager intends to file a petition with the court for approval of the claim procedure” sometime during the quarter from January to March, the court said in a statement.
But the creation of a procedure for filing claims and resolving them does not mean that investors will immediately receive cash in the near future.
“It will be some time before the recipient can make payments to investors and creditors,” the lawsuit says.
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