SiliconSage CEO Denies SEC’s Fraud Charges, Blames Pandemic for Firm’s Financial Woes

A developer accused of fleecing investors to the tune of $119 million denies any wrongdoing, saying federal regulators rushed to judgment when they charged him with running his company like a Ponzi scheme.

In a Dec. 28 filing asking the U.S. District Court to deny the U.S. Securities and Exchange Commission (SEC)’s motion to expedite the case, SiliconSage Builders CEO Sanjeev Acharya blames the pandemic—not fraud—for the firm’s “liquidity crisis.”

The principal executive of the Sunnyvale-based real estate group claims the SEC made no attempt to negotiate a resolution and “chose to rush into the courthouse” just two months after launching a formal investigation.

“Defendants were and are prepared to work with the SEC to protect investor interests,” Acharya’s attorney writes in the filing. “If that negotiated resolution fails to materialize, defendants request additional time to respond adequately to the SEC’s motion.”

SiliconSage’s response goes on to say that the timing of the complaint—filed during the holidays and worsening pandemic—makes it hard to gather relevant information from witnesses and other sources.

“Given the complexity of the SEC’s allegations, which stretch back at least four years and across numerous projects and entities,” the filing continues, “defendants require additional time to respond.”

The SEC accuses Acharya and SiliconSage of bilking investors since at least 2016, claiming the fraud extended to about 250 investors—most of them of South Asian descent. Regulators described the alleged plot as a form of “affinity fraud” because Acharya allegedly targeted his own community.

The securities commission is asking the court to place SiliconSage under a receivership, freeze its assets and impose monetary penalties against the company and its CEO.

Acharya, in court documents, says the complaint filed last month by the SEC fails to spell out “any direct allegation of misappropriation” and “proposes nothing less than the dissolution of a business built over nine years.”

In the SEC’s telling, the fraud began four years ago—and that SiliconSage Builders saw not a penny in profit ever since.

SiliconSage Controller Polly Tsai contested the SEC’s narrative in a declaration, attesting that the company raised far less than the $119 million cited by regulators. From March to September last year, she states, SiliconSage mustered no more than $4 million from investors. And from last fall, she says, it raised less than $400,000 from two backers.

While the SEC casts Acharya as coy about the company’s financial troubles, the CEO says he began openly communicating with investors about liquidity issues almost as soon as the pandemic-prompted economic slowdown threatened the fate of SiliconSage projects in Fremont, Santa Clara and San Jose, among other cities.

Rather than try to pull one over on stakeholders, Acharya says in the filing that he tried hammering out refinancing deals and “other financial workouts” with lenders and “sophisticated institutional investors.”

Acharya has acknowledged some missteps, however, and said during an August meeting with investors that he should have been more transparent.

“My mistake,” he reportedly said, “was that I wasn’t thinking about a downside scenario.”

The company and its principal implore the court to give them enough time to try to sort things out—an approach that the filing suggests might better serve everyone with a stake in real estate projects “hobbled by the pandemic.”

“These interests,” SiliconSage’s Dec. 28 court filing states, “which recover after the secured construction debt, would be severely compromised by any fire sale triggered by the SEC’s overly aggressive actions.”

On Dec. 29, U.S. District Court of Northern California Judge Susan Illston granted Acharya’s request for more time—as long as SiliconSage agrees to stop raising money from individual investors without express permission from the SEC.

The development company now has until Jan. 15 to file a formal answer to the SEC, which will have until Jan. 25 to respond to that. A hearing has been scheduled for Feb. 5.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. Ponzi schemes are every day bread in India. When these Indian crooks engage in this type of grand scheme they make sure they hang around with people that will make them look like the real deal decent person. They are so used to this type of life style, so lies and falsifying documents is nothing to them. They have zero remorse for their acts and the harm they cause to people. When the SEC investigates, it is because they have some type of evidence of the scheme. Was anyone expecting this crook to accept his wrongdoing? This is big time white collar crime!

  2. Follow the money. Did the payments to older investors come from newer investments or from earnings?
    Why would there be a settlement when ongoing fraud is alleged to happen? Retirements are decimated by this type of theft. The pandemic is a weak excuse for bad behaviour.

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