Embattled contractor Mark Melchiori pleaded his Fifth Amendment right against self-incrimination when asked questions about money transfers and offshore accounts during a Dec. 19 bankruptcy hearing at the U.S. Trustee’s office in Santa Barbara.

During a ninety-minute hearing, Melchiori invoked the Fifth Amendment in response to questions about whether he transferred money between his company and his personal bank accounts, whether he holds any offshore accounts or assets, and whether a divorce from his wife was used to hide money owed to his company’s creditors.

The hearing was an opportunity for creditors of bankrupt Melchiori Construction Co. to ask questions about the company’s finances. In an unusual move for a bankruptcy hearing, Mark Melchiori was accompanied by Joshua Lynn, a criminal defense attorney. According to Lynn, Melchiori is also the subject of a criminal probe launched by the Santa Barbara County Sheriff’s Department. No charges have been filed.

Melchiori Construction Co.’s largest creditor is Santa Barbara Bank & Trust, which alleges that it is owed $9 million. An attorney for the bank asked Mark Melchiori whether his company had used any proceeds from a victorious lawsuit settlement against the developers of Chapala One for purposes other than repaying creditors. Lynn, Melchiori’s attorney, broke in: “He’s not going to answer that.”

Melchiori then confirmed: “I’m going to take my attorney’s advice and exercise my rights under the Fifth Amendment,” Melchiori said.

Melchiori and Lynn gave similar answers when the bank’s attorney asked whether Mark Melchiori maintained any personal offshore bank accounts or assets. When the bank’s attorney asked Mark Melchiori about the status of an appeal of a legal decision against Chapala One’s developers, Mark Melchiori said it was stalled. “The bank has refused to release the funds to help us,” he said.

Sam Williams also sought to question Melchiori. Williams said he was representing the U.S. Department of Labor in a civil investigation into Melchiori Construction’s pension plan. Mark Melchiori answered several routine questions, but when Williams asked whether any money that was supposed to be deposited into employee retirement plan accounts was used for other purposes, Lynn stopped Mark Melchiori from giving further answers. Williams tried to ask Mark Melchiori several other questions about what became of the company’s retirement plan money, but Lynn cut him off.

“We’re not going to answer any more of Mr. Williams’ questions today. We’re done here,” Lynn said.

Earlier in the hearing, U.S. Bankruptcy Trustee Jerry Namba, who is tasked by the Justice Department with uncovering any assets that might be available to creditors, looked over electronic documents on his laptop and sought to ask Mark Melchiori whether he’d moved company funds to his personal accounts.

“It was very difficult to follow along with distributions made from the company to yourself” and two other Melchiori Construction employees, Namba said.

Mark Melchiori pleaded the Fifth.

Lynn and Mark Melchiori said that Ed Kearns, the attorney who is handling bankruptcy cases for Mark Melchiori and his company, could not be at the hearing because he was tied up as a witness in a courtroom in Los Angeles. During the hearing, Mark Melchiori said that Kearns has agreed to take a 2007 Chevrolet dump truck and two other vehicles as payment for his services.

The swarm of bankruptcies, lawsuits and potential criminal charges surrounding Mark Melchiori signal a tumultuous decline for one of the region’s top general contractors. It built many notable projects in the Santa Barbara area, from Chapala One to the corporate headquarters of Santa Barbara Bank & Trust’s parent company to the celebrated renovation of the Granada Theatre.

Starting with an Emergency Operations Center project for the county of Santa Barbara, subcontractors began to complain that they weren’t being paid on time and sometimes not at all. Melchiori Constriction experienced similar problems with a $6 million Ocean Sciences building at UC Santa Barbara and was terminated from the project about half way through.

The company filed for bankruptcy in October after facing dozens of lawsuits. In late November, Mark Melchiori filed for personal bankruptcy.

Earlier this year, Mark Melchiori divorced his wife, Heather. After the divorce, Mark Melchiori’s stepmother filed a lawsuit accusing the couple of using the divorce process to transfer assets to Heather Melchiori’s name and shield those assets from creditors. Earlier this month, Rabobank sued Heather Melchiori, who has not filed for bankruptcy protections, for $1.3 million in unpaid business loans.