Mahender Makhijani, a 44-year-old real estate investor from Corona del Mar, Orange County, pleaded not guilty Monday to federal charges accusing him of defrauding an Arizona bank of nearly $100 million. He appeared in a federal court in Santa Ana to face two counts: bank fraud and making false statements to a bank related to a $100 million real estate loan issued by Phoenix-based Western Alliance Bank in October 2024.
Makhijani was taken into custody on June 10, two days after the criminal complaint was filed. Prosecutors allege that he provided fraudulent collateral to secure the loan, which is now in default. According to court documents, he submitted forged title insurance policies purporting to grant Western Alliance Bank a first lien on the collateral, a claim that was false. Western Alliance reports that the loan’s outstanding balance is nearly $99 million.
The trial is scheduled to begin on August 11 before U.S. District Judge David O. Carter. Makhijani’s criminal defense attorney, Michael Schachter, did not respond to requests for comment.
In a separate legal matter, an arbitrator ruled in May that Makhijani must pay $1.34 billion to Laguna Beach real estate developer Mohammad Honarkar in a civil case stemming from a 2021 joint venture. The arbitrator found Makhijani fraudulently induced Honarkar into the partnership, subsequently wresting control of more than two dozen properties owned by Honarkar, many of which were later lost to creditors. While no criminal charges have been filed regarding that case, prosecutors allege in the affidavit supporting the bank fraud charges that Makhijani used force and threats in his dealings with Honarkar and others. This includes taking control of the Hotel Laguna in 2023, a landmark property Honarkar was renovating.
Following Makhijani’s arrest, prosecutors sought to detain him without bail, citing concerns that as a legal Indian immigrant with ties and assets in India, including access to private jets, he posed a flight risk. Magistrate Judge Autumn Spaeth initially granted him bail set at $500,000 but later declined to accept a $450,000 cashier’s check submitted on his behalf, due to insufficient proof of the legitimacy of those funds. As a result, Makhijani remains in custody but is still eligible for bail.
Prosecutors have been investigating Makhijani’s assets, which they believe are largely hidden through shell companies and intermediaries both in the U.S. and India. The investigation has been complicated by his use of straw men to operate his businesses and execute documents, a strategy he reportedly employed to shield himself from legal and financial liability. Authorities say Makhijani’s business dealings financed an affluent lifestyle, including multiple high-end properties in Orange County and luxury vehicles.
The ongoing criminal and civil proceedings highlight growing scrutiny of Makhijani’s real estate ventures, particularly his operations in the distressed asset market, which he developed over the past decade and which attracted significant investment from wealthy Southern California investors.