An Indian-origin businessman living in California has been arrested by US federal authorities on allegations that he orchestrated a sophisticated bank fraud scheme involving nearly USD 100 million in loans. Prosecutors claim that the accused used falsified documents to make real-estate-backed collateral appear far more secure and valuable than it actually was, thereby exposing the lending institution to substantial financial losses.
The accused, Mahender Makhijani, 44, was taken into custody on Wednesday following the filing of a federal criminal complaint charging him with bank fraud. According to the US Department of Justice, Makhijani is a lawful permanent resident originally from India who resides in Corona del Mar, California.
Federal prosecutors allege that Makhijani controlled a Newport Beach-based company known as Cantor Group V LLC, which maintained a lending relationship with a federally insured financial institution identified in court records only as "Bank #1". Under this arrangement, the bank reportedly advanced nearly USD 100 million to Cantor Group so that it could originate or acquire loans secured by real estate.
As part of the financing agreement, Cantor Group was required to pledge those loans and the underlying real estate collateral to the bank. The agreement specifically required that the company pledge only loans in which it held a first-lien position on the property. A first lien is particularly valuable because it gives a lender the primary legal claim on a property if a borrower defaults, ensuring that the lender is paid before any other creditors.
According to prosecutors, the alleged fraud centred on making loans appear to have first-lien status when they did not. Court documents claim that between September 2024 and April 2025, Makhijani manipulated title insurance records to falsely indicate that Cantor Group held the primary claim on various properties. In reality, investigators allege that other lenders had priority claims, making the pledged collateral significantly less valuable and more risky than represented.
Authorities contend that Makhijani, either personally or through a subordinate acting under his direction, altered title insurance policies using Adobe software. Prosecutors further allege that efforts were made to conceal the modifications by editing or deleting metadata and, in some cases, printing and rescanning documents to obscure evidence of digital alterations. The allegedly falsified records were then submitted to the bank as genuine documentation supporting the loans.
The complaint also alleges that when questions arose regarding discrepancies in title records, Makhijani participated in conference calls with representatives of the bank and provided explanations that prosecutors claim were misleading. Investigators further allege that in December 2024, he caused a spreadsheet containing false information about the title issues to be delivered to the lender in an effort to address the bank's concerns and maintain the appearance that the collateral met the required standards.
According to federal authorities, these actions enabled Cantor Group to continue obtaining financing based on collateral that did not satisfy the conditions of the lending agreement. Prosecutors argue that the alleged misrepresentations exposed the bank to losses approaching USD 100 million.
The matter eventually escalated into civil litigation when the bank reportedly filed a lawsuit in the Los Angeles Superior Court in August 2025 concerning the alleged fraud. Federal criminal investigators subsequently pursued the case, leading to Makhijani's arrest.
The charges against Makhijani remain allegations at this stage, and he is presumed innocent unless proven guilty in court. However, if convicted of bank fraud, he faces severe penalties. Federal prosecutors noted that the charge carries a maximum possible sentence of 30 years in prison, along with substantial financial penalties that could be imposed by the court.
The case highlights the importance of title records and lien positions in real estate financing. Financial institutions rely heavily on accurate documentation when assessing the value and security of collateral backing large loans. Any misrepresentation of lien status can significantly alter the risk profile of a transaction and potentially expose lenders to major losses if borrowers default.
Federal authorities continue to investigate the matter, and additional details may emerge as court proceedings move forward. The case is expected to draw significant attention due to the large amount of money involved, the complexity of the alleged document manipulation scheme, and the serious criminal penalties that could result if the allegations are proven in court.
