CA Developer Accused of Insurance Fraud in NV Fire

June 6, 2011

A California developer has been arrested on suspicion of filing duplicate claims with two insurers for the same damage after a 2008 fire at his Reno luxury condominium project.

Bijan Madjlessi was arrested at his office in San Rafael, Calif., and booked into the Marin County, Calif., Jail on a charge of felony insurance fraud. He was released after posting a $750,000 bond.

He’s accused of buying insurance policies from both Fireman’s Fund and Travelers Casualty and Insurance Co., then filing overlapping claims with both companies after the fire at Belvedere Towers.

Reno fire investigators described the July 29, 2008, blaze at the former Sundowner hotel-casino as arson, but no charges were filed.

Madjlessi is accused of defrauding the insurers of $1.4 million, according to an affidavit signed by Deputy District Attorney Tom McCallister.

It’s one of the larger cases of double-dipping insurance fraud in California, said Dave Althausen, spokesman for the California Insurance Department.

The department’s Insurance Fraud Division investigated the case along with the Marin County district attorney’s office and the insurance companies.

Madjlessi’s attorney, Douglas Horngrad, told the Reno Gazette-Journal and Marin Independent Journal that the fraud charge is “an invention of the insurance companies.”

“He is not guilty of the charges,” Horngrad said. “He is going to aggressively contest them, and we are confident he is going to be acquitted.”

The day after the fire, Madjlessi filed claims with Travelers, whose policy covered the Belvedere’s north tower, and Fireman’s Fund, whose policy covered the entire property, McCallister said.

As a result, Madjlessi was paid twice for damage to the north tower, although he told both insurance companies that there were no other policies covering the project, the Independent Journal reported.

Madjlessi, 55, is scheduled to be arraigned June 20 in Marin County Superior Court.

Madjlessi also is involved in civil litigation over his companies’ properties in Petaluma, Calif. His companies defaulted on $11.2 million in loans from Sonoma Valley Bank for condo projects in Petaluma, the Santa Rosa Press Democrat reported.

Efforts are under way to foreclose on six Madjlessi buildings in Petaluma, according to the newspaper.

Despite $3.4 million in insurance payments, it took two years before burned portions of the Belvedere were renovated last summer, said Cindi Gil-Blanco, Reno code enforcement officer. She said she mailed several citations to Madjlessi over the issue.

Companies controlled by Madjlessi were delinquent in paying nearly $1 million in Washoe County property taxes and a special local tax owed on many of the Reno condominiums.

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