The former president of Melchiori Construction Co., Mark Melchiori, pleaded not guilty at a July 5 arraignment to 47 felonies including fraud and embezzlement.
A preliminary hearing is set for Sept. 6.
He was arrested in June on 47 felony charges, including prevailing wage fraud, embezzlement, diversion of construction funds, insurance fraud, violations of the unemployment insurance code, grand theft by false pretenses and conspiracy to commit a crime. There were also special allegations of aggravated white-collar crime involving a pattern of fraud and embezzlement of more than $150,000 and excessive losses of more than $200,000 and $100,000 related to property damage and theft, respectively. Total losses are more than $1 million, officials estimated.
The charges capped a four-year investigation by the Santa Barbara County District Attorney’s Office, the Santa Barbara County Sheriff’s Office and the California Department of Industrial Relations and Division of Labor Standards. It stemmed from work Melchiori Construction did for Robert Zemeckis, the director of “Back to the Future,” on his Montecito home.
Among other violations, investigators claim that the construction company forged signatures on documents stating that the subcontractors had been paid and that Melchiori bullied subcontractors into “inflating” billing invoices. Melchiori allegedly diverted construction funds for his own personal use.
The now-defunct Santa Barbara-based construction company was once the leading force in high-end construction. Melchiori and the construction company that his father Ugo Melchiori founded faced an array of lawsuits alleging that it did not pay its subcontractors and creditors on time.
In 2011, subcontractors of Melchiori Construction’s $4.5 million Emergency Operations Center project for the county of Santa Barbara complained that they weren’t being paid on time, or at all.
Later that year, Melchiori was fired as the general contractor on the $6.5 million Ocean Sciences building at UC Santa Barbara.
Following the divorce from his ex-wife Heather Melchiori, Mark Melchiori was sued by his stepmother, who claimed that the divorce was a ploy to hide assets from creditors.
The final blow came from Santa Barbara Bank & Trust. The $9 million lawsuit forced both the construction company and Mark Melchiori to seek Chapter 7 bankruptcy protection in 2012, listing up to $10 million in debts and less than $50,000 in assets.
After filing for bankruptcy and defaulting on payments, Melchiori was sued by the bonding company that helped him secure several construction projects. Melchiori falsely claimed he was the managing member of La Cumbre Office Partners LLC, which owns an office building at 200 N. La Cumbre Road, and listed it as a personal asset on his financial statements, according to civil court records. Now, a group of La Cumbre’s investors who claim they weren’t notified of the agreement are potentially on the hook for more than $6 million. The case is on appeal.
Melchiori is currently the executive vice president of development at Morgan Hill-based Corinthian Development Company — a position he has held since December 2012.
• Contact Alex Kacik at [email protected]