SONOMA -- Former top executives of the failed Sonoma Valley Bank and North Bay real estate developer Bijan Madjlessi were arrested Wednesday on multiple federal charges stemming from activities prior to the bank's collapse, according to the office of Melinda Haag, U.S. attorney in Northern California.

The criminal indictment alleges that Mr. Madjlessi, former bank CEO Sean Cutting, former senior vice president Brian Melland and attorney David Lonich conspired to falsify Mr. Madjelessi's financial condition in order to finance development of an apartment complex in Santa Rosa. Charges include conspiracy, bank fraud, wire fraud, money laundering, false statements to a bank, false bank entries and attempted obstruction of justice, according to the office of Ms. Haag.

View a copy of the indictment here.

Bank executives are alleged to have knowingly approved financing to Mr. Madjlessi and Mr. Lonich -- applying under another individual's name -- that would allow the borrower to pay off his own $30 million defaulted loan related to the Park Lane Villas East project.

The indictment also alleges that Mr. Cutting issued letters on Sonoma Valley Bank letterhead that stated Mr. Madjlessi and Mr. Lonich possessed sufficient funds at the bank to purchase additional units at the apartment complex.

The two borrowers are also alleged to have instructed the individual through whom they obtained the loan from Sonoma Valley Bank to make false claims to federal agents and a grand jury investigating the transactions.

The defendants could face up to $17 million in fines from those charges, according to the U.S. attorney's office. The charges carry prison terms of up to 30 years each, according to the indictment.

All four defendants were arrested on Wednesday, with each released on a $250,000 bond. They are schedule to appear in Northern California district court on April 18.

Westamerica Bank acquired Sonoma Valley bank after its closure by the Federal Deposit Insurance Corp. in August 2010. The bank had received $8.65 million in funds through the Troubled Asset Relief Program.

The FDIC is also seeking $12 million from the former bank executives and another former CEO, Melvin Switzer, as part of a separate suit alleging that the borrowers were directly responsible for losses. That case is ongoing, with the court most recently dismissing the defendants' argument for dismissal of the case on April 9.

Operated under Sonoma Valley Bancorp since 2000, the three-branch bank reported $337 million in assets and was publicly traded on Nasdaq before its FDIC-assisted acquisition by Westamerica Bank on Aug. 20, 2010. The FDIC in January issued an order barring Mr. Cutting and Mr. Melland from ever again working at an FDIC-insured institution, imposing a fine of $10,000 for Mr. Cutting and $2,500 for Mr. Mellan.