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Mark Melchiori Facing 47 Felony Counts Alleging Fraud, Embezzlement

Former president of now-defunct Santa Barbara-based construction company due to be arraigned July 5

The former headquarters of now-defunct Melchiori Construction on De la Vina Street in Santa Barbara. Former company president Mark Melchiori was arrested Thursday on 47 felony county alleging fraud and embezzlement stemming from projects the company was involved in.
The former headquarters of now-defunct Melchiori Construction on De la Vina Street in Santa Barbara. Former company president Mark Melchiori was arrested Thursday on 47 felony county alleging fraud and embezzlement stemming from projects the company was involved in. (Noozhawk file photo)
Mark John Melchiori
Mark John Melchiori

Mark John Melchiori was arrested Thursday on 47 felony counts — alleging fraud and embezzlement — stemming from construction projects involving his now-defunct Santa Barbara-based company, according to the Santa Barbara County District Attorney’s Office.

Melchiori, 49, former president of the company that bears his family name, turned himself in to authorities Thursday afternoon and was booked into Santa Barbara County Jail, with bail set at $395,000, said Kelly Scott, chief deputy district attorney.

He posted bond and was released Thursday afternoon, Scott said.

Charges against Melchiori include diversion of construction funds, insurance fraud, embezzlement, grand theft, conspiracy, prevailing wage fraud and violations of the unemployment insurance code.

The 31-page complaint against Melchiori alleges multiple incidences of losses in the hundreds of thousands of dollars — and Scott told Noozhawk the total losses are believed to be about $1 million.

The crimes are alleged to have occurred between July 20, 2010, and May 1, 2016.

Melchiori was scheduled to be arraigned Friday in Superior Court in Santa Barbara, but Scott said his court date was changed to July 5.

The investigation of Melchiori began in 2012, and involved the county Sheriff’s Department, the District Attorney’s office, and the state Department of Industrial Relations, Division of Labor Standards.

The criminal probe was started after numerous sub-contractors, employees and others complained that Melchiori owed them money, alleging that he was hiding assets via a divorce agreement processed earlier in 2012.

Former employees have said that the company stopped making payroll that summer in the wake of stalled projects and lawsuits.

Employees also alleged that Melchiori borrowed from their retirement accounts to make ends meet.

The outcry from Melchiori’s sub-contractors provoked a string of complaints and lawsuits against the company, with many saying they’ve never been paid for work on now-finished projects.

Another lawsuit filed by Melchiori’s stepmother alleged that his divorce from his wife in 2012 was a scheme to hide assets from creditors to which his company owes money.

The company filed for bankruptcy in October 2012, and Melchiori also filed for Chapter 7 bankruptcy personally.

His paperwork lists 170 creditors, among which are the Internal Revenue Service, the California State Franchise Tax Board, the city of Santa Barbara and many others.

Noozhawk executive editor Tom Bolton 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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