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Monday, February 18 , 2019, 5:41 am | Fair 43º


Federal Labor Investigator Appears at Melchiori Hearing

The first public hearing took place Monday since former construction mogul Mark Melchiori filed for bankruptcy in October, and though Melchiori himself did not appear in court, signs are emerging that the case has garnered the interest of federal investigators.

Melchiori is the subject of a criminal probe for his business dealings under Melchiori Construction Co., according to the Santa Barbara County Sheriff’s Department.

The company’s Chapter 7 bankruptcy filing revealed 170 creditors, many of whom are subcontractors of the company, that are still owed money, and several lawsuits allege that Melchiori may be hiding assets via a divorce agreement processed earlier this year.

Several former employees are listed among the creditors in the bankruptcy filing, claiming that they were asked to borrow from their company retirement accounts to help the company make payroll.

Monday’s meeting of creditors, held at the Office of the U.S. Trustee at 128 E. Carrillo St. in Santa Barbara, was a hearing in which a debtor is questioned under oath about his or her finances to confirm that they’ve been accurately represented. Melchiori is required to appear at the proceeding when it goes forward later this month.

Representing the creditors in the case was Sam Williams, an investigator for the U.S. Department of Labor. He told Noozhawk after Monday’s brief proceedings that he could not comment on Melchiori’s case.

Several creditors confirmed to Noozhawk on Monday that they’ve been interviewed by Williams, and his presence at the meeting could signal that the case may be larger than it appears.

Melchiori’s attorney, Joshua Lynn, was also present and said the hearing was continued because of the Sheriff’s Department comments publicly to news organizations about investigating Mark Melchiori and the company, and that the continuance was “standard procedure.”

Lynn said Melchiori wanted to be at the proceeding, but that Lynn had advised him not to attend “out of an abundance of caution.”

Lynn told Noozhawk he did not know why the labor investigator was there.

The meeting is scheduled to continue at 1:30 p.m. Dec. 19.

Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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