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The FBI recently searched the Newport Beach offices of Continuum Analytics, a California-based real estate investment firm tied to defaulted loans worth around USD 160 million. The loans, linked to Cantor Group funds, were reported by Zions Bancorporation and Western Alliance Bank. Legal correspondence indicates that a grand jury has been convened and that both banks have filed separate lawsuits against the guarantors of the Cantor funds. The ongoing probe adds to growing concerns about financial exposure in commercial real estate lending.
The Federal Bureau of Investigation (FBI) recently carried out a search at the offices of Continuum Analytics in Newport Beach, California. The real estate investment firm is connected to Cantor Group funds, which have been cited in bad loans worth nearly USD 160 million, disclosed by Zions Bancorporation and Western Alliance Bank. These loan defaults have raised concerns in financial markets already monitoring signs of weakening corporate credit. Advertisement
According to a letter by law firm Paul Hastings, FBI agents conducted the search in mid-September. The letter, addressed a day later, stated that a grand jury had been convened in connection with an ongoing criminal investigation. However, it did not identify the investigating authority or specify the potential charges or individuals involved.
A separate letter from law firm Allen Matkins, which represents entities linked to Continuum, confirmed that it learned about the search warrants the same day they were executed. The letter, filed in a California court, noted that certain clients were under scrutiny "in connection with a pending criminal investigation." The firm also acknowledged that prosecutors had convened a grand jury, a typical step when gathering more evidence.
Continuum Analytics, according to public records, is an affiliate of Cantor Group's investment funds. Zions and Western Alliance have reported that Cantor funds defaulted on loans totaling about USD 160 million. These defaults have drawn legal and regulatory attention as both banks pursue recovery through separate lawsuits.
Zions Bancorporation filed a suit against Cantor fund guarantors Andrew Stupin and Gerald Marcil, seeking to recover over USD 60 million from non-performing commercial and industrial loans. Western Alliance Bank also initiated legal proceedings a day later against the same individuals and another Cantor fund, demanding repayment of nearly USD 100 million. Both lenders have accused the fund of breaching loan terms by withholding or misrepresenting critical information. Western Alliance additionally alleged fraudulent activity linked to the Cantor fund's operations.
Continuum Analytics specializes in acquiring and managing distressed real estate assets for groups of investors. Legal filings identify Stupin and Marcil as major investors in the firm. A February arbitration ruling found that Cantor "consists solely" of Continuum's legal owner, Deba Shyam, and that both entities share the same office premises. Shyam did not respond to calls or emails seeking comment.
Brandon Tran, an attorney representing Cantor Group and the two investors, said the company had met its contractual obligations and that its loans were audited and independently reviewed several times over the years. He also clarified that Stupin and Marcil are passive investors without operational roles in Cantor. In its filings, Cantor disputed that the Western Alliance loan is in default.
In a separate statement, Gerald Marcil said he had invested in several of Continuum's real estate projects, denied wrongdoing, and claimed he too was a victim in the situation. Representatives of Zions and Western Alliance did not comment on the ongoing proceedings.
While the FBI and the U.S. Department of Justice have not issued official statements, the presence of multiple law firms and court filings indicates that the investigation is at an advanced stage. However, it remains unclear whether the case will result in any criminal charges, as not all federal investigations lead to prosecution.
The letters from Paul Hastings and Allen Matkins were filed in connection with a broader real estate dispute involving multiple parties represented by both law firms. The legal documents have provided the first official confirmation of government scrutiny around Continuum Analytics and its network of investors and lenders.
Source Reuters
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