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Melchiori Invokes 5th Amendment at Bankruptcy Hearing

The president of Melchiori Construction Co. invoked the Fifth Amendment multiple times at a recent bankruptcy hearing, at the request of his attorney.

Attorney Josh Lynn said Mark Melchiori was asked about his assets and property but didn’t answer questions since the Santa Barbara County Sheriff’s Department started a criminal investigation into him and his company.

“What choice do I have, even though Mark would want to talk about all of it?” Lynn said.

The next bankruptcy hearing is scheduled for January.

“We will return in January, hoping to get creditors some money,” Lynn said.

Melchiori filed for Chapter 7 bankruptcy in mid-October, but the company has been in decline since the death of former president Ugo Melchiori, Mark’s father, in 2009.

The Contractors State License Board issued a citation to Melchiori Construction earlier this year for failing to pay subcontractors that worked on Santa Barbara County’s new Emergency Operations Center.

Court documents filed with the U.S. Bankruptcy Court in Santa Barbara listed assets the company currently holds at $50,000 or less, and debts of $1 million to $10 million.

There are 170 creditors listed in the Chapter 7 documents, who are being represented by Sam Williams, an investigator for the U.S. Department of Labor.

Melchiori is being sued by Santa Barbara Bank & Trust, which alleges he defaulted on a $6.3 million line of credit and his former executive vice president, Jean Mollenkopf, is suing the company, saying she hasn’t been paid back $50,000 she withdrew from her 401(k) account to help the firm make payroll.

Melchiori’s stepmother also has sued him, his ex-wife Heather and the company, alleging breach of contract for unpaid loans and alleging that the divorce was a scheme for Mark Melchiori to hide assets from creditors, according to court documents.

Rabobank is suing Heather Melchiori for allegedly defaulting on $1.3 million in business loan payments.

Noozhawk staff writer Giana Magnoli 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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