Wine Country Villain’s Son Charged With Fleecing the Family Bank

·9 min read
Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty
Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty

Property developer and rumored billionaire Bill Gallaher has emerged as something of an arch-villain in Sonoma County, California. Now an explosive drama is playing out within his own family.

Last week, prosecutors charged Gallaher’s son Marco and his son’s girlfriend Rachele Eschenburg with felony grand theft following allegations that the pair had pilfered more than $100,000 from the family-owned bank.

The legal trouble started in May, when an official at Poppy Bank reported that Marco Gallaher was “fraudulently accessing” an account reserved for the bank’s shareholders “to pay credit card bills and make purchases on [A]mazon,” according to a search warrant issued over the summer.

The bank suspected that the younger Gallaher had accessed the account, named “Big Poppy Holdings Inc,” by using information printed on a dividend check he had received. The company initially reported that $75,000 had gone missing, though it was able to recoup more than $50,000.

Investigators tallied over two dozen “unauthorized transactions,” the warrant said, including several transfers to accounts held by Marco Gallaher or Eschenburg—who were arrested but not charged over the summer. (It is unclear if the couple are still together.)

According to The Press Democrat, which first reported on the charges, the Santa Rosa police chief notified the City Council about Marco Gallaher’s arrest because of the “media attention” it would likely generate.

<div class="inline-image__credit">Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty</div>
Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty

The reason for his concern: Bill Gallaher’s vast wealth and expansive portfolio has sparked controversy after controversy in the area. Most recently, he spent over $1.6 million last year trying to recall the local district attorney, Jill Ravitch, single-handedly dwarfing her entire campaign budget. (Ravitch won the recall effort with more than three-quarters of the vote, and she recused herself from the Marco Gallaher investigation, a spokesperson said.)

A year prior, Ravitch’s office had secured a settlement against Gallaher’s companies over accusations that employees at its senior homes had abandoned elderly residents during a massive wildfire in 2017.

Reached for comment in October about his legal issues, Marco Gallaher simply texted, “Fuck off.” He was slightly more verbose with The Press Democrat, arguing that the whole situation at Poppy Bank was a “misunderstanding.”

“I’ve been trying to distance myself from my family for a while,” he added.

<div class="inline-image__credit">Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty</div>
Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty

In an interview around the same time, Eschenburg told The Daily Beast that the bank’s claims were completely “falsified” and that the police raid on her and Gallaher’s house “was totally illegal all the way around.”

Neither Gallaher nor Eschenburg responded to requests for comment after charges were brought this month.

However, their lawyer Erick Guzman suggested to The Daily Beast that Ravitch’s office is prosecuting Gallaher as an act of political retaliation. “The evidence I’ve been provided with does not come close to establishing proof that a crime occurred,” he said. “It would strain credibility to conclude that it’s a coincidence that Marco is charged in this case and that his father has taken the vocal and overt positions that he has involving the D.A.”

Guzman said the pair will plead not guilty.

Representatives for Bill Gallaher did not respond to requests for comment.

Marco Gallaher and Eschenburg are set to be arraigned on Jan. 25, which will surely land Bill Gallaher in the headlines once again.

In recent years, the elder Gallaher has been scrutinized for a long list of issues. His companies settled a whistleblower lawsuit over claims that he was giving affordable housing to his friends; he and his family have poured huge amounts of money into other regional political races; and he sued the towns of Windsor and Santa Rosa, demanding they reverse mandates to make newly constructed homes more environmentally friendly, a measure he opposed.

“Many people are upset, or have become more upset lately, that an individual person with so much money is using it against the public good,” said Debora Fudge, a member of the Windsor town council. While he has “done a lot of good” for the area, she acknowledged—such as donating to the local Boys & Girls Club—“his reputation has greatly diminished in Sonoma County.”

When he was young in California, Bill Gallaher did not seem destined to grow rich. At 19 years old, he hitchhiked alone into Washington State and across three-quarters of Canada.

Later, he landed a job stocking shelves at a Safeway supermarket, where he worked for four years. “I figured out that’s exactly what I didn’t want to do,” he told an interviewer in 2007.

Gallaher had dabbled in homebuilding during high school and college, and at 25 years old he attempted to make it his career. He fought aggressively to land and sell his first project, then quickly ramped up his output.

In the coming decades Gallaher built over 500 houses, and his empire expanded to shopping centers, dozens of senior living communities, and Poppy Bank, which now holds over $4 billion in assets.

“Life is so much better with money,” Gallaher said in the 2007 interview. “You get to do a lot more… You don’t have to wait in line.”

<div class="inline-image__credit">Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty</div>
Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty

It was around that time that locals began murmuring about Gallaher’s political donations and whether he was trying to buy influence, according to a person familiar with Sonoma County politics.

The allegations eventually grew more explicit. In a 2016 article, sources quoted by The Press Democrat questioned $195,000 in contributions Gallaher’s son-in-law, Scott Flater, made as “independent expenditures” to support city council candidates. Flater’s stated occupation was “homemaker.” The obvious query: Where did that money come from?

David McCuan, a political science professor at nearby Sonoma State University, told the paper that the businessman appeared to be “sprinkling money around.”

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“Bill Gallaher uses his family as a shell game, and has for a long time, in order to channel support to candidates of his liking,” he said then. “It sounds to me what they have done is against the letter and the intent of the law.”

Gallaher and Flater sued for defamation, naming McCuan, the journalist, and the newspaper’s owner as defendants.

In May 2017, Flater submitted a sworn declaration, in which he stated: “No one, including Mr. Gallaher, ever provided me with any money to donate to any political candidates or the independent expenditure campaign during the 2016 Santa Rosa City Council elections.”

But a week later, he submitted a revised declaration, this time without referencing independent expenditures.

The court, in dismissing the complaint, found that the word change was likely intentional, and a “concession” that Gallaher and Slater couldn’t prove defamation.

And that wasn’t the only explosive declaration to emerge in the case. During litigation, Gallaher’s former general counsel Jeffrey Breithaupt, who worked for him until 2015, testified that Gallaher had frequently approached employees and offered “to reimburse them for contributions they would make at his direction to certain political candidates.”

“Gallaher asked me several times to make such contributions to political candidates and I did so,” Breithaupt wrote in his sworn statement. “Each time he would reimburse me with a check from his personal checking account.”

The Press Democrat, which has covered Gallaher closely, previously reported on the declaration.

A spokesperson for the state’s political spending watchdog, the Fair Political Practices Commission, told the outlet that the allegations outlined by Breithaupt appeared illegal, but were outside the statute of limitations. The FPPC had earlier investigated Gallaher for alleged campaign money laundering but never accused him of wrongdoing.

Then came the fire.

The flames had already swallowed part of Graciela Walker’s retirement community—a property operated by one of Gallaher’s companies—when she stumbled out of bed at 4 a.m. in October 2017. Neighbors had begun evacuating hours earlier, but no one had alerted her or her family.

Weak and rattled, the 95-year-old staggered for an exit. She came to a set of outdoor stairs, where she deserted her walking aid and dragged herself up. As the flames started to close in, Walker sat down and prepared to die.

“She thought, ‘OK, I'm going to breathe deeply so I suffocate,’” her daughter Brenda told The Daily Beast in an interview. It seemed a better way to go than burning alive.

Walker didn’t die. A passing police officer caught a glimpse of her flashlight and guided her to the main building, where she was evacuated by bus to a local auditorium. There, Brenda’s husband, Rick, found her alone, “huddled… in her pajamas and robe.”

“I would officially say she was abandoned,” Brenda said. Her mother died in 2020, and Brenda and Rick believe the trauma precipitated her decline.

In the aftermath of the fire, which consumed more than 5,600 structures across the region, other residents at Gallaher’s retirement communities also began to point fingers. A number of them accused his company of direly understaffing the properties to scrimp on costs and failing to adequately prepare his staff for a disaster. There allegedly weren’t even generators on site, former residents and employees claimed.

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Ravitch faulted Gallaher’s company, too. The business eventually paid a $500,000 settlement and agreed to five years of independent monitoring. A spokesperson for the company said at the time that they had settled because it was “fiscally prudent.”

Meanwhile, the legal flare-ups persisted. In 2019 a whistleblower at one of Gallaher’s developments, Mariah Clark, filed a suit alleging she was wrongfully terminated for questioning whether the business was committing affordable housing fraud.

The development, Vineyard Creek, had received $35 million in tax-exempt bonds under the condition that Gallaher would construct dozens of affordable units.

According to Clark, some of those units improperly went to Gallaher’s personal connections, even if they didn’t meet the income requirements. Simultaneously, Clark alleged that the property overbilled insurers and low-income tenants.

The complaint was corroborated in another local report, in which two of the business’ former employees said they “were directed to participate in fraud.” The employees added that regulators had done little to probe misconduct or vet the allegations.

Clark reportedly settled the wrongful termination complaint last year for $500,000. The fraud allegations were dismissed as part of the deal.

There have been other controversies: also last year, Bill Gallaher, his family, and affiliates of his companies contributed more than $250,000 in support of Ted Gaines, a virtually unknown gubernatorial candidate who ended up with just 0.7 percent of the vote—raising eyebrows about why they donated that cash. (Gallaher’s wife, Cindy, defended the donations as above board.)

There is also the matter of whether Gallaher and his wife reversed a $16 million pledge to the local Boys & Girls Club, and an ongoing dispute over the purchase of his daughter’s $950,000 horse.

For the moment, though, it is Gallaher’s estranged son Marco who is garnering attention—and as usual for the family, it is attention they likely would have preferred to avoid.

Read more at The Daily Beast.

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