About Washoe County recently conducted the sale of tax delinquent properties. According to Nevada statutes the properties are placed for sale if the taxes have not been paid for at least three years.
The RGJ reported on the purchase of 92 condominiums by David Lonich, the attorney representing Bijan Madjlessi of Belvedere LLC. Madjlessi planned to market the condos in the Sundowner’s north tower, but the economy and the real estate market soured and he was unable to sell as planned.
The lawyer for the developer of downtown Reno condominiums — converted from rooms in the former Sundowner Hotel and Casino — on Wednesday purchased 92 of the condos for nearly $2 million at auction, after his client was delinquent in paying nearly $800,000 in taxes to the county.
But, here is the part that the RGJ, for whatever reason, did not tell.
The story was related to me by people that had attended the Washoe County Tax sale last week.
Lonich bought all 92 units and experienced little or no competition. Others bid on some of the properties, but were all out bid.
The nature of the tax lien is that it is superior to all other liens. Consequently, when a tax sale is conducted, all other liens are wiped out.
So, what else was wiped out? Since the taxes take precedence over all else, any financing, or mortgage loans were eliminated. According to notices of default totalling approximately $47.9 million, debt in that amount was eliminated, completely. The RGJ reported that the property was purchased for $7.89 million. I’m not clear how debt could grow to 47.9 million. Nevertheless, it would appear the banks lost, big time.
Likewise, public records showed a total of 359 liens had been filed against Belvedere LLC and the property. Some of these liens may have been satisfied, but this has not been verified. A total of 771 documents have been recorded associated with Belvedere LLC and I have not reviewed all of them. These liens have all been completely wiped out by the tax foreclosure. Each of these liens represents someone that Belvedere LLC owed money, and each was left holding the bag.
Contractors didn’t get paid. Vendors didn’t get paid. The HOA didn’t get paid. and even the City of Reno didn’t get paid.
Now, I believe that some of these liens may have been satisfied because some of the units may have been sold but this has not been verified. Therefore the total numbers may vary a bit, but this is still close.
And what did Madjlessi lose? You may be surprised to learn that he fared a bit better than his associates, the banks and the contractors and vendors. He was able to eliminate $47.9 million
in debt for a mere $2 million and he got a lot of his building upgrades for free.
It’s nice work if you can get it.
This is exactly right.
Bijan set the whole thing up and this is not the first time.
Just recently, he has done this in Santa Rosa another project he built call Park Lane Villas and Courtside Village. And yet another in Petaluma CA, call Greenbiar Apartments, which too is his own project.
Over the years he has built and collapsed many projects. He buries them in debt, does not pay the subs, puts them out of business, sell the home for way above market values using inside appraisers and acts as his own real-estate company, mortgage broker, loan agent and then does forces them all into foreclosure. The victims are in the hundreds and there are around 400 million in bad loans on various properties.
He has used bank insiders, to get overvalued loans with little of no collateral while taking these bank insiders on vacations and trips in his privet jet and yacht. Bribes absolutely. Even investments in bogus companies set up by bank employees to use to accept money from Bijan while handing out loans. Several banks have collapsed or been taken over by the FDIC due directly to the loans given to Bijan and his 40 LLC’s. The tangled web of corporations that he has opened to hide his stake in each of the projects is stunning.
In Petaluma, the Greenbiar Apartments Project, he took out over $30 Million in loans and the property is valued at $4 million. Sonoma Valley Bank was given $9 million in Tarp Funds and the promptly gave Bijan $9.2 million unsecured after he already was in dfault to the same bank for millions. Wait, wait… there’s more. Then within a year of getting yet another loan and not making payments, he went into the bank and had them sign a “Forbearance” agreement that would allow him to buy back his own loans for roughly $4.5 million. They signed it and then were taken over by the Feds and now Bijan has filed a lawsuit to force his the Forbearance agreement. Effectively wiping out the previous loans and the TARP money…..wait, wait…..this same property “Greenbriar” which has all these millions and millions of loans that he is getting wiped out are in a project that is fully rented. Yep, that right 128 unit all paying $1,000.00 to $1,300.00 per a month AND…. He was not giving the rent money to the bank (not making the mortgage payments). That right millions in income and keeping the cash and the Bank let his keep doing it year after year and loaned even more money.
Can you imagine taking out a mortgage on your home, not making any payment and then within a year getting the bank to sign off for pennies on the dollar? The banks get shut down, The shareholders lose everything. All the vendors, contractors employees home owners go bankrupt and Bijan ends up re-buying it all so he can start all over again.
Cyrus Massoumi · President at ADEPTO, INC
I am Bijans Nephew. Far from defending him – I think that the Marin IJ is missing on reporting on the more hazy activities of Menlo Oaks. The Press Democrat story is not adequately reported – according to the article by P.D. the bank lost tens of millions on loans Bijan defaulted on – a huge sum for a small bank – this most likely caused them to default.
— This organization, contractors that have not been payed by the Madjlessi’s, many many people who have been f’ed about by the shady lending practices he engaged in using in-house lawyers etc. — This is the stereotype of the family that lives in luxury due to the suffering of others.
On a personal note: My grandfather – Bijans father in law passed away in January. My grandmother tried to kill herself a week later. Bijans wife Beguneh – (who if she underwent psychological evaluation would most likely be diagnosed as a psychopath) – rushed to the hospital right after the attempted suicide – (I was the one that found her). — After this Beguneh alienated my mother and took my grandmother back to their $13M french style house in Mill Valley. —- They for months were desperately trying to manipulate my grandmother in order to manipulate my grandfathers will. My grandfather was a business man and educated – my grandmother did not have those luxuries. —– The day after my grandfather died Bijan offered my mother his “in-house” lawyers in order to help with the “estate planning”. —— They are thieves and the scum of the earth – I have been in their house many times and they live in utter luxury. They have a son Michael who barely knows how to communicate at the age of 24 who has an unlimited credit card which he spends $10,000 a month buying sushi and clothes – this I can now see was built on scams that his parents were running.
Bijan and I played tabble tennis in their pool house for a number of weeks almost nightly when I was visiting their home. He told me he lost $75 million after the housing recession on his Reno units. During my time in their home I heard him on the phone multiple times speaking about ways to manipulate the deals he was working on with private equity firms as well as for tax purposes.
He endlessly lectured on how he doesn’t care about money – how he’s nearly lost all of it many times – and how somehow he managed to keep everything above board for his family so that they never noticed. Apparently .. that’s not exactly the truth.
Bijan married my aunt because our family is wealthy, he knew that my grandfather was a prominent politician in Iran. He is charming and suave and his air of confidence will endear trust. Beguneh is the snake – very calculating – very cold – appearing to lack in general human emotions (mental illness runs in the family). Their son Michael was held back in 1st grade because he had a stuttering problem – his parents were to busy climbing the wealth ladder to teach him to read.
The things that they did to my mother and family I will never forgive. Beguneh accusing my mother of being responsible for her fathers death. Trying to steal my grandfathers assets from an innocent 86 year old woman not capable of fathoming the notion of her own daughter and son-in-law being thieves – the list continues.
Hell would be to good of a place for them.