Editor’s note: We’re tired of devoting ink to schemes – we really are. We’d much rather focus on straighter ways to make money, and the players and structures enabling them. That being said: C’mon - how could we not write about these 2?

The alleged mastermind of a fugazi first-position scheme that defrauded regional lenders Western Alliance and Zions was arrested by federal authorities Wednesday, and the details are crying for an HBO four-parter.

Per the DoJ, from 9/24 to 4/25, Mahender Makhijani falsified title-insurance policies to make his entity, Cantor Group V, look like it held first-lien positions on pledged collateral, when in fact other creditors were ahead. Makhijani (or one of his minions) edited the docs in Adobe, then stripped the metadata "by printing out the altered title policies before scanning them." 😽 In Dec. ‘24, prosecutors say, he sent Bank #1 (Western Alliance not ID’d here but it’s made clear in the civil case) a spreadsheet of false explanations. Five federal agencies, including the IRS and the FBI, are investigating; if convicted, he faces up to 30Y.

Corona Del Mar-based Makhijani acquired and managed distressed CRE through Continuum Analytics, whose legal owner is Deba Shyam. Orbiting Continuum is a family of holdcos operating under the "Cantor Group" name — backed by the same circle, with prominent SoCal multifamily players Gerald Marcil and Andrew Stupin among the principals and guarantors. That web of affiliated entities is the through-line connecting a $1.3B+ fraud award, a regional-bank panic, and now, a federal arrest. 👇

This week on the pod, we dive into the high-stakes, high-reward (not for shareholders tho) world of SL Green, the mighty REIT that is New York’s largest commercial landlord. From a deal junkie standpoint, SL Green is king of the hill, but no matter what it does, it can’t seem to get Wall Street to love it. Next, we convert our dollars to lek and head to Albania 🦩 , where Jared Kushner is trying to create the next St. Barths. And finally, we load up those 10-cent bags and go shopping - for grocery anchored retail with TPG and friends.

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In May, an arbitrator awarded Laguna Beach businessman Mohammad Honarkar $1.3B+ (which incl. $650M+ in punitive damages), capping a yearslong fight over the real estate portfolio Honarkar refinanced into a ‘21 JV with Continuum. The arbitrator found Makhijani and affiliated entities fraudulently induced Honarkar by promising a $30M "cash equity" contribution they never intended to fund, instead using a $20M Nano Banc loan — secured by Honarkar's own properties — and routing the proceeds into a Continuum account before the borrower entities legally existed.

When the respondents tried to prove they'd disclosed the loan, they produced a "Contribution Agreement" they swore was printed, signed, and scanned on June 7, 2021. Honarkar's side brought in a handwriting expert. Mid-hearing, the respondents stipulated the signatures "were placed onto the document by electronic means."

The contribution agreements between the JV and Cantor, meanwhile, were described by the arbitrator as a "heads I win, tails you lose" structure:

The dispute turned physical. After Honarkar was booted as manager, "a group of armed individuals working on behalf of Continuum and Makhijani" seized the Hotel Laguna, a Holiday Inn, and vacation rentals. Video captured Makhijani during one standoff: "I'll put 32 fucking guards here." In July ‘23, when both sides were in court, Continuum agents broke into Honarkar's 4G headquarters with a hammer and removed banker's boxes labeled "LEGAL." The crew ran "CORRUPTION??" billboards around Laguna Beach featuring Honarkar, a cop, and the city manager. The arbitrator held Nano Banc — founded by Continuum insiders, with Makhijani among its largest referral sources — jointly liable for conspiracy, finding fraud, oppression, and malice.

When the JV vehicle, MOM CA Investco, filed Ch. 11 last February, it set off a chain that left Zions Bancorp. and Western Alliance staring at ≈$160M in soured Cantor loans. Western Alliance sued first, in August, alleging the group hid that properties backing $99M in loans were already in foreclosure. Zions followed a couple months later, citing more than $60M it had loaned to a Cantor entity in ‘16 and ‘17 on the standard promise it would sit first at default. Instead, the deeds were quietly subordinated and the collateral "irretrievably lost," with the new senior lenders who leapfrogged the bank being the same Cantor managers or affiliates. "In effect, CB&T's losses became Defendants' gains," the suit says, alleging a "sweeping betrayal of trust."

Investors reacted violently. Zions shed ≈$1B (13%) in market cap the day it disclosed the loss, a plunge that knocked regional bank stocks and dragged the Dow down 300 points. It took a $60M provision and a $50M charge-off. Marcil and Stupin deny the banks' allegations — their attorney says they'll be "fully vindicated.” Meanwhile, Makhijani had his perp walk and now has a federal battle ahead of him.

The fallout from the Mark Nussbaum alleged mega-escrow fraud scheme (If new to it, catch up here, here, here, on the pod here and a YouTube snapshot here) continues to spread, now arriving at the door of one of the Tri-State’s scrappiest and most controversial title-insurance firms. Hard-money lender Blueberry Funding (Abe Miller) is suing Riverside Abstract, alleging the firm (principals Shaul Greenwald, Yoel Zagelbaum, Avery Eisenreich 👩‍⚕ ) engaged in 50+ fraudulent flips w/ Nussbaum & his partner Sam Lowinger * 🎷, using the same playbook: a contract signed at a certain price, an immediate assignment of that contract at an inflated price, and a financing at that 🔼 price, with the extra loan proceeds pocketed. (Riverside was blackballed by Fannie in ‘24 over a near-identical playbook used in deals done by Barry Drillman 🚬 & partners).

Blueberry and its affiliate EADMK agreed to park "show capital" in Nussbaum’s escrow account, with the stipulation that it not leave. The complaint frames the pitches as two flavors of the same lie: EADMK's money was sold as pure proof-of-funds to flash to sellers, while Blueberry's — tied to longtime Nussbaum client Mendy Steiner — was framed as show capital that could convert into acquisition financing if deals closed. In both cases, plaintiffs allege, the monies – ≈$105M in total per the complaint – never made their way back.

The Riverside transactions, the plaintiffs allege, came w/ kickbacks that were calculated as a cut of the title premium on each closing; Riverside allegedly kicked back a third of its own 80% cut to Nussbaum, paid in the form of disbursements to various charities. Here’s one alleged Whatsapp (of c) between Nussbaum & Riverside staffer Hadassah Abbott.

Abbott: You have a balance of 4K last time and new balance is 5800 for Tn-47007 and TN 47008
Nussbaum: Pls send 3k to Chabad. 5k to ohr Shlomo and 1800 to Tommche shabbas of Monsey.

The recipient charity was allegedly instructed not to acknowledge the gift in writing. 🛀
* Lowinger now works for Eisenreich’s FO, Yakar Partners