LA landlord Gerald Marcil among investors accused of bait-and-switching banks

"The man who made Jamie Dimon worry about a wave of commercial mortgage fraud is a California multifamily player and big-time Republican donor, Gerald Marcil, who is now facing serious legal allegations. Marcil was among the defendants named in a complaint filed in Los Angeles County Superior Court this week accusing the investor of manipulating loan structures that left Zions Bancorporation and Western Alliance Bancorporation out in the cold when properties tied to their financing went bust, Bloomberg reported."

"Zions subsidiary California Bank & Trust claims it lent more than $60 million to an investor group that listed 16 properties as collateral; six of those assets were investments under Newport Beach-based limited liability company MOM CA Investco, which filed for bankruptcy in February. When California Bank & Trust underwrote the loans in 2016 and 2017, the company ensured it enjoyed lender protections, namely that it would be first in line for repayment if the borrower defaulted and liquidated its assets."

"San Diego-based California Bank & Trust said it later discovered other lenders actually held liens on several of those same buildings, thus rendering Zions' protection obsolete when the assets went into liquidation. Phoenix-based Western Alliance Bancorp filed a similar complaint in August, saying the same investor group, led by Gerald Marcil, Andrew Stupin and Deba Shyam, owes it nearly $99 million."

Gerald Marcil, a California multifamily investor and major Republican donor, faces legal complaints accusing him of manipulating loan structures that disadvantaged lenders. Zions subsidiary California Bank & Trust says it lent more than $60 million to an investor group that listed 16 properties as collateral, six tied to Newport Beach-based MOM CA Investco, which later filed for bankruptcy. California Bank & Trust claims other lenders held liens on several of the same buildings, nullifying its first-in-line repayment protections. Phoenix-based Western Alliance Bancorp filed a similar suit seeking nearly $99 million and alleges the group concealed foreclosures on some collateral. MOM CA Investco was launched in 2021 by Mohammad Honarkar and Mahender Makhijani; Honarkar later accused partners of fraud.

Read at therealdeal.com