Property once eyed for an Imax theater on Dale Road in Modesto remains in limbo as the developer faces a fraud trial in federal court, a hefty lawsuit in Stanislaus County and a thorny bankruptcy.
Those suing Aruna Kumari Chopra say she owes them $12.4 million. A trial date for the lawsuit, initially scheduled to begin last week, was reset for April, two months after she’s expected to stand trial in Sacramento.
Prosecutors say Chopra, 65, forged signatures and filed phony documents to secure multimillion-dollar loans tied to 40 acres on Dale Road across from Kaiser Modesto Medical Center, where she envisioned the theater, luxury condominiums, a hotel, a bowling alley, waterfalls and fountains. She also tried to persuade City Hall to provide $6.6 million in municipal bonding.
The proposal fell apart in 2011 as city officials became suspicious and authorities investigated whether Chopra had concealed debt to get other loans and to apply for bonding.
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Chopra and her husband filed for bankruptcy protection in late 2011, and she was indicted three months later on two counts of mail fraud and two counts of aggravated identity theft after an 11-month investigation involving the FBI, the Federal Housing Finance Agency and the Stanislaus County District Attorney’s Office real estate fraud unit.
A judge in 2012 appointed a trustee to oversee bankruptcy matters, and he tried to sell the Dale Road property but got no legitimate offers, according to bankruptcy documents. The judge last month concluded that the land has zero equity, and agreed to let some interested parties foreclose on most of it, or attempt to sell it at public auction. A local real estate agent continues to market about one fourth of the property.
“It’s a great property – just a prime location, in our opinion,” said Patrick Kelly, the city’s planning manager. Officials hope that area someday will produce hundreds of jobs, Kelly said, but the future of the Chopra property is murky pending resolution of legal problems.
Meanwhile, the trustee recommended that the bankruptcy be changed from Chapter 11, which allows an ailing business to regroup with a legitimate plan for repaying creditors, to Chapter 7, in which assets are liquidated to repay creditors in part. Some creditors last week supported the conversion, saying they’ve waited nearly three years, without success, for the Chopras to come up with a plan.
Chopra and her husband, Sawtantra, claimed in documents filed last week that they have lined up investors to pursue an unidentified joint venture on 9.5 of the 40 acres. Their partners, George Hall and Larry Williams of First City Capital and Windsor Business Solutions, agreed to pay about $2 million for the land and would own 75 percent of the project, with the Chopras retaining 25 percent, the documents say, and they ask the judge to keep the bankruptcy in Chapter 11.
Another lawsuit brief filed in June says Aruna Chopra proposed to settle with opponents by using assets not subject to bankruptcy and paying them back over 16 years.
An opponent’s lawsuit brief says Chopra’s forgeries are “obvious to even the untrained eye.” Attorneys cite a victim’s signature purportedly recorded by a notary in Modesto on a property document; the victim produced an Amsterdam receipt to prove she was in Europe that day, The Modesto Bee reported in August 2011, seven months before Chopra’s arrest.
In a deposition, a notary who had worked in Chopra’s office testified that she did not witness signatures as suggested on Chopra documents. Chopra kept and refused to return the notary’s log and stamp and demanded that the notary lie and say the notary had lost them, another brief says.
A Fresno accounting firm associated with the bankruptcy case reported a couple of weeks ago that the Chopras are in trouble with the IRS and the California Franchise Tax Board.