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Cutting, 3 others, indicted for bank fraud

Sean Cutting, the former president and CEO of the failed Sonoma Valley Bank, was arrested at his Sonoma home Wednesday morning and was taken into custody by federal agents, charged with conspiracy, bank fraud, wire fraud (six counts), money laundering (12 counts), false statements to a bank, and false bank entries (five counts).

Also arrested and similarly charged were Brian Melland, 45, of Santa Rosa, former senior loan officer and vice president of the bank; Bijan Madjlessi, 58, of Mill Valley, a real estate investor who defaulted on a $30 million loan for a Santa Rosa property; and Santa Rosa attorney David Lonich, 59, who is accused of participating in a scheme to repurchase the defaulted property through a Sonoma Valley Bank Loan using “nominee borrowers” and thus disguising the real borrowers – Madjlessi and himself.

The four were arraigned in Federal District Court in San Francisco Wednesday afternoon, before U.S. Magistrate Judge Joseph C. Spero, when a sealed indictment was opened and read.

All four suspects have posted $250,000 bail bonds and have been released.

The indictment followed a three-and-a-half year joint investigation involving the Special Inspector General of the Troubled Asset Relief Program (TARP), the Federal Housing Finance Agency and the FDIC. The Sonoma County Sheriff’s Office, the Marin County Sheriff’s Office and the Santa Rosa Police Department participated in the investigation.


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