Alleged Fraudster Mahender Makhijani Pleads Not Guilty

An Orange County real estate investor who built a business buying distressed real estate has pleaded not guilty to defrauding an Arizona bank of nearly $100 million.

On Monday, 44-year-old Mahender Makhijani of Corona del Mar was arraigned in Santa Ana federal court on two charges in the investor’s latest legal troubles, the Los Angeles Times reported. Makhijani stands accused of bank fraud and making a false statement to a bank in a case linked to an almost $100 million real estate loan provided by Phoenix-based Western Alliance Bank. He pleaded not guilty to both charges.

Makhijani was arrested and taken into custody on June 10. The latest charges come after an arbitrator in a separate civil fraud case ordered Makhijani to pay more than $1.3 billion after being found liable for fraud, breach of contract and forcible entry related to a joint venture that wrested control of numerous commercial properties previously owned by Laguna Beach businessman Mohammad Honarkar and his company, 4G Wireless, the Los Angeles Times reported. Makhijani did not face criminal charges in that case, but in an affidavit supporting the bank fraud charges, prosecutors alleged he used “force and threats” against Honarkar and others, including taking over the Hotel Laguna in 2023 that Honarkar was in the process of renovating.

In the latest case, Makhijani allegedly provided false collateral documents for the October 2024 loan that is now in default. The outstanding balance is nearly $99 million, according to Western Alliance. Prosecutors claim Makhijani falsified title insurance policies that showed Western Alliance would have a first lien on the underlying collateral if the loan went into default; in reality, other creditors were listed ahead of the bank.

Makhijani’s trial in the latest case is set for Aug. 11 in Santa Ana. He was initially granted $500,000 bail but remains in custody after a judge declined to accept a $450,000 cashier’s check from a Makhijani associate upon failing to find proof that the source of the funds was legitimate.

— Chris Malone Méndez