An Orange County real estate investor charged with criminal fraud will remain in jail pending trial after a judge ruled he was a flight risk and had made death threats against a witness.
Mahender Makhijani, 44, of Corona del Mar, accused of defrauding an Arizona bank of nearly $100 million, was denied bail Monday after a multiday hearing sought by federal prosecutors. He had previously been granted $500,000 bail.
Makhijani, who was taken into custody June 10, has pleaded not guilty to two felonies in a case involving a $100-million loan made by Phoenix-based Western Alliance Bank.
He also has been ordered by an arbitrator to pay $1.34 billion to Laguna Beach real estate mogul Mohammad Honarkar in a separate civil fraud case.
“[T]he Court finds there are no conditions of combination of conditions that will reasonably assure the Defendant’s appearance and the safety of others and the community,” U.S. Magistrate Judge Autumn Spaeth wrote in the ruling.
Makhijani is a dual citizen of India, where he has traveled recently and owns property, according to the decision.
Citing papers filed by prosecutors and hearing testimony, Spaeth said in her ruling that an associate of Makijani’s, now cooperating with the government, had lied to the court in June about the source of funds for a $450,000 check to help the defendant make bail.
The judge noted that the associate, Deba Shyam, has had his car and house paid for by Makhijani, who “orchestrated” the use of funds belonging to others for his bail bond.
Spaeth also ruled that Makhijani had lied about his drug use and threatened people in the past, including an Orange County bank employee who testified that he had received death threats to influence his court testimony.
In the criminal case, Makhijani is accused of providing bogus collateral for a October 2024 loan now in default. Western Alliance said the outstanding balance was roughly $99 million.
“The allegations reflect highly sophisticated means of fraud, including the creation of falsified documents, transfers of funds between accounts to shelter the source of funds, payments to individuals as bribes and use of their names in corporate capacities to deceive, and threats of physical harm and intimidation, among other things,” Spaeth wrote.
Karren Kenney, his criminal defense attorney, said she is seeking to appeal the ruling.
In the civil case, an arbitrator in May ordered Makhijani to pay $1.34 billion after deciding he had fraudulently induced Honarkar into a 2021 joint venture — and then wrested control of and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Makhijani is not well-known outside Orange County real estate circles, but he established a successful distressed-assets business over the last decade that attracted wealthy Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
Makhijani told an associate he employed shell companies and straw men to sign documents on his behalf because he wanted to insulate himself from litigation — noting “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
