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More than 20 investors lost over $2.2 million after trusting his representations about the business and its projects. Acharya, 58, of San Jose, was the president and CEO of SiliconSage Builders and several related companies. However, the company’s financial position had deteriorated significantly by 2020.
The business was struggling partly because of the COVID-19 pandemic and had accumulated substantial debt, according to the plea agreement. A real-estate business can face financial difficulties, but concealing those problems from investors can turn a struggling company into a fraud case. A California property developer who continued seeking investments while his company was heavily in debt and facing serious cash-flow problems has now been sentenced to federal prison. The business operated as a vertically integrated development and construction company, supporting investments in large residential and mixed-use real-estate projects across the San Francisco Bay Area. As part of his role, Acharya personally approached investors and encouraged them to put money into the company’s property developments. The investment model depended on attracting funds to support construction and other real-estate activities. It was also experiencing serious cash-flow shortages and needed fresh investments to remain operational. Rather than disclosing these difficulties to potential investors, Acharya continued seeking money for the business.
The fraudulent scheme began in March 2020 and continued until October 26, 2020.
He knew SiliconSage was in serious financial trouble but concealed its debt and cash-flow problems while persuading investors to provide additional funds, according to the US Attorney’s Office. During this period, Acharya solicited investments without informing people about the company’s actual financial condition. Assistant US Attorney Christiaan Highsmith prosecuted the case, with assistance from Janice Pagsanjan, Mimi Lam and Kevin Costello. The prosecution followed the investigation conducted by IRS-CI. The case serves as a reminder that property investment companies must be transparent about their financial condition when raising money. Even when a business is attempting to survive difficult market conditions, withholding important financial information from investors can carry serious criminal consequences.