Silicon Sage Fraud Victims Struggle to Get Restitution

Investors burned in a nearly $120 million Bay Area real estate fraud scheme may not recover all their losses through condominium unit sales by a receiver at 1853 Almaden Road in San Jose and 42111 Osgood Road in Fremont, the Mercury News reported.

The case is tied to South Bay real estate executive Sanjeev Acharya and his company Silicon Sage Builders. In 2020, federal investigators charged Acharya with defrauding hundreds of investors out of $119 million that they had invested in an unknown number of projects by Acharya and Silicon Sage across the Bay Area. Authorities claimed Acharya and Silicon Sage, like fellow embattled Bay Area developer Ken Mattson, would shift money around from investors to various bank accounts to keep cash flows active. Silicon Sage and Acharya had 77 different bank accounts in total and made at least 130,000 banking transactions over a period of eight years.

Acharya was caught when authorities homed in on the activities of seven entities that Acharya and his company controlled. “The transactions that the receiver’s forensic accountant analyzed consistently demonstrated that money put into a specific entity would be transferred through multiple accounts, usually within a matter of minutes, before ending up in the account of an entity that needed to make payments that day,” the receiver said in a U.S. District Court filing on Dec. 3. He settled his case with the U.S. Securities and Exchange commission in 2021.

A court-appointed receiver hired Acres Loan Origination, the senior construction lender for the 96-unit Almaden Road complex in San Jose and the 91-unit Osgood Road development in Fremont, to complete the projects. The money earned from these condo unit sales was supposed to go to investors and other creditors who lost money in Acharya’s web of alleged fraud, but the effort soon hit a snag.

“Unfortunately, the cost to complete the projects exceeded the original estimates and took longer than anticipated,” Kyra Andrassy, a legal counsel for the receiver, said in legal documents. The attorney cited “economic repercussions of the pandemic and supply chain issues,” in addition to the failure of Acharya and Silicon Sage Builders as professional developers, as hurdles that proved difficult to overcome.

“Much of the work that had been completed prior to the receiver’s appointment needed to be redone or repaired because of shoddy workmanship,” the receiver told the court.

The Osgood development in Fremont was completed in early 2024 and had sold all of its units by June of that year. Acres received $62.7 million from the sale of the condos in that building. In San Jose, the Almaden project was completed in late 2024, but sales have been slower than anticipated. As of early last month, 45 condos had been sold, while another 12 were in escrow and the other 39 were still available for sale. Acres has received $28.8 million in proceeds from that project so far. — Chris Malone Méndez