An arbitration judge awarded an Orange County property owner $1.34B after nearly three years of proceedings that centered on a fraudulently formed joint venture that took control of nearly two dozen properties in Laguna Beach and Orange County.

Respondents Mahender Makhijani, his company Continuum Analytics and affiliates were liable for fraudulent inducement, breach of contract, forcible entry and related claims, according to the award. Attorneys for Makhijani did not immediately respond to a request for comment.

The dispute stemmed from a joint venture that took control of numerous commercial properties previously owned by Mohammad Honarkar and his company, 4G Wireless.

The Hotel Laguna in Laguna Beach and a quartet of retail and commercial buildings at Laguna Canyon Road near the festival grounds for the Sawdust Festival are among the $483.6M portfolio of 20 properties the JV took control of.

In 2021, Honarkar was trying to bounce back from pandemic shocks to his properties, was mired in a complex divorce that placed some of his properties under receivership, and was struggling to pay off a $195M loan on a collection of properties, the Laguna Beach Independent reported at the time.

Honarkar made a deal with Makhijani and Continuum Analytics to contribute stakes in multiple commercial properties in exchange for a $30M equity contribution and refinancing help from Makhijani and his affiliates.

That $30M wasn't what it seemed to be. The JV used financing secured by Honarkar’s properties to make up "a substantial portion" of the equity contribution and hid the financing's origin from Honarkar, according to the award.

Of the 21 properties in the portfolio, 14 have been foreclosed on and three are in foreclosure proceedings now and under receivership, according to court filings and information provided by Honarkar's attorneys.

“For years, my reputation, my business and properties I spent decades building were ruined by those I thought I could trust,” Honarkar said in a statement. “This case was never just about financial loss. It was about finally being vindicated.”

Though the award is enormous, it's unclear whether Honarkar will ever see it in full.

Makhijani was arrested Wednesday, charged with defrauding a bank out of nearly $100M. The federal criminal complaint alleges that he manipulated title policies to inflate the value of collateral offered to the bank.

Whether he has the money or assets to fulfill the award “is the $1.34 billion question,” said Halpern May Ybarra Gelberg partner Aaron May, who, along with partner Joseph Ybarra, led the arbitration team for Honarkar.

The legal team for Honarkar will look into Makhijani's assets to determine how much there is for Honarkar's award.

If the assets are less than $1B, "my client would not get fully compensated for the harm he suffered, but we would be entitled to whatever assets that we can locate and use those to try to compensate my client," May said.