Preferred Bank Ensnared in $115 Million Real Estate Loan Fraud Case

The case stems from a Southern California real estate financing dispute involving parties affiliated with Cantor Group. Zions Bancorp and Western Alliance Bancorp filed lawsuits alleging fraud in loan and collateral documents. Los Angeles-based Preferred Bank also faces exposure of more than $100 million, highlighting regional banks’ risks in overseeing collateral, fund flows and related-party lending.

Preferred Bank placed $115.6 million in mortgage loans and $2 million in commercial and industrial loans on nonaccrual status on February 23, 2026. The collateral was valued at $219.3 million. Prosecutors arrested Mahender Makhijani on June 11, accusing him of forging title insurance documents and defrauding Western Alliance of nearly $100 million. The case remains pending.