California
Exclusive: FBI searched California real estate firm linked to bad bank loans
Item 1 of 2 The podium for the director of the Federal Bureau of Investigation is seen at FBI headquarters in Washington, U.S. June 14, 2018. REUTERS/Yuri Gripas/File Photo
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On September 11, FBI agents searched Continuum’s Newport Beach, California, offices, law firm Paul Hastings wrote in a September 12 letter seen by Reuters.
Representatives for Continuum did not respond to emails and calls seeking comment. The FBI is an enforcement arm of the Justice Department. Spokespeople for the agencies did not respond to requests for comment. An attorney for Cantor Group said the firm upheld the terms of the Zions and Western Alliance loans and did not provide comment on the government scrutiny.
Allen Matkins, a law firm that represents other entities linked to Continuum, wrote in an October 2 letter that it learned on September 11 that certain of its clients were the subject of search warrants “in connection with a pending criminal investigation,” and that a grand jury had been convened in the case.
Prosecutors typically convene a grand jury when they intend to gather more evidence. The letters did not say which specific criminal authority was leading the case or what potential misconduct or individuals it was focused on.
Criminal investigations do not necessarily mean any wrongdoing has occurred and many do not result in charges.
Reuters is reporting the FBI search and probe for the first time. The government scrutiny could have ripple effects for what legal filings and public records show is a complex web of investors and lenders tied to Continuum’s real estate dealings, some of which are entangled in civil litigation.
Paul Hastings and Allen Matkins are representing parties embroiled in a complex real estate dispute. The letters relate to those proceedings. The Allen Matkins letter was disclosed in a California court.
When asked about the letter by Reuters, a lawyer for Paul Hastings said the firm was “working to unravel multiple levels of alleged fraud,” but did not provide more details.
Allen Matkins did not respond to calls and emails seeking comment.
PASSIVE INVESTORS
Zions on October 15 sued Cantor Group fund guarantors Andrew Stupin and Gerald Marcil, among others, to recover more than $60 million in soured commercial and industrial loans. The next day, Western Alliance flagged that it had sued the pair and a different Cantor fund in August to recover nearly $100 million.
Both suits allege key information was misrepresented or not disclosed, breaching the loan terms. Western Alliance also alleges fraud on the part of the Cantor fund.
Continuum acquires and manages distressed real estate assets for groups of investors, and its largest investors include Stupin and Marcil, according to a February arbitration ruling related to the real estate dispute. That ruling found Cantor “consists solely” of Continuum’s legal owner, Deba Shyam, and shares the Continuum offices. Shyam did not respond to calls and emails seeking comment.
Cantor upheld its contractual obligations and was transparent with its lenders, while the loans were audited and independently reviewed multiple times over the years, said the Cantor attorney Brandon Tran, who also represents Stupin and Marcil.
The pair are passive investors in Cantor and held no operational roles, he added. Cantor in legal filings has disputed that the Western Alliance loan is in default.
In a statement, Marcil said he had invested in several of Continuum’s properties. He denied wrongdoing and said that he was a victim.
Spokespeople for Zions and Western Alliance did not respond to requests for comment.
Reporting by Douglas Gillison and Chris Prentice; Editing by Michelle Price
Our Standards: The Thomson Reuters Trust Principles.
A California man was arrested on suspicion of committing lewd acts and exploiting minors through online platforms.
The Santa Barbara County Sheriff’s Office identified the suspect as Edward “Eddie” Alessandro Zarate, 20, of Santa Maria.
On May 28, authorities began investigating Zarate over allegations that he was communicating with underage girls online and exchanging sexually explicit material with them.
Detectives later learned that Zarate allegedly communicated with minor victims through mobile phone apps such as Whipd, Purp, Wizz and Snapchat, along with exchanging text messages.
Zarate’s profiles appeared to portray him as a juvenile.
“Once he established communication with minors, he would often encourage them to move conversations off the platform and continue communicating via text message,” the sheriff’s department said. “During these conversations, Zarate would disclose his true age and identity.”
So far, authorities are aware of two female juveniles who have met with Zarate in person and reportedly engaged in lewd acts.
He is accused of communicating with minors in multiple states including California, Florida and Illinois. In California alone, detectives believe Zarate contacted minors from Los Angeles, Oxnard, Santa Barbara, San Diego, Santa Maria, Lompoc, Paso Robles, Nipomo, Arroyo Grande and San Francisco.
“Based on the scope of the investigation, detectives believe there may be additional survivors who have not yet been identified,” authorities said.
On June 10, Zarate was arrested and booked on multiple felony charges including oral copulation with a person under 18 years of age, unlawful sexual intercourse with a minor, sending harmful matter to a minor, and two counts of possession of obscene material depicting a minor.
Anyone who may be a victim, has communicated with Zarate online or through text or has information on the case is asked to call Sheriff’s Detectives at 805-681-4150. Anonymous tips can be provided to the SBSD’s tipline at 805-681-4171 or online at SBSheriff.org.
Top universities reject Trump’s ‘compact’ over academic freedom
Massachusetts Institute of Technology, Brown University, University of Pennsylvania, and University of Southern California rejected Trump’s “compact.”
To the surprise of perhaps no Californians, several California universities appeared in the top rankings of the world’s best universities in the latest U.S. News and World Report rankings released on June 16.
Of the more than 2,250 worldwide research institutions that U.S. News & World Report evaluated for this list, six California universities ranked in the top 50 globally, with an even split among Northern and Southern California institutions.
The 2026 list includes universities from more than 100 countries, with the following countries receiving the most schools in the overall rankings:
- China: 409
- United States: 275
- India: 123
- United Kingdom: 93
- Japan: 86
Did your California alma mater appear among the top global universities?
U.S. News and World Report methodology
When determining a university’s placement on the list, U.S. News & World Report considered factors more relevant to research-oriented institutions than to undergraduate-focused metrics like bachelor’s degree graduation rates.
It focused on aspects like academic institutions’ research and reputation, number of publications, the quality of publications and citations. It considers other factors, including location, campus culture, the strength of particular programs, and cost, which are also very important.
“For students seeking universities with strong academic excellence and global recognition, the Best Global Universities rankings offer an essential comparative resource,” said LaMont Jones, Ed.D., managing editor for Education at U.S. News.
“Our methodology focuses on a school’s research mission and scholarly impact, helping students identify institutions that are truly at the forefront of global knowledge creation.”
Out of the top 10 global universities, two California institutions made the list:
- Harvard University
- Massachusetts Institute of Technology (MIT)
- Stanford University
- University of Oxford
- University of Cambridge
- Tsinghua University
- University of California Berkeley
- Yale University
- University College London
- Columbia University
How did California colleges rank in U.S. News and World Report’s Best Global Universities 2026 list?
Outside of the top 10 universities, California saw a handful of other institutions rank highly on U.S. News & World Report list.
Notably, the University of California – Los Angeles just missed the top 10 list, ultimately ranking as the 11th-best global university and the second-best public institution on the list. It was beaten out as the best public institution by its academic counterpart, the University of California, Berkeley, which was ranked the 7th-best global university.
Additionally, a number of University of California schools made the top of the list, ultimately reaffirming the quality of the institutions’ public campuses across the state.
“Research from the University of California is vital to work that benefits all Americans, from breakthroughs in the treatment of Parkinson’s to the science behind previously unimagined successes in fighting cancer and the development of quantum computers that will enable the critical advances of the 21st century,” the University of California said in a press release about its rankings.
Here’s the list of California universities that made the top 100 list:
- 3. Stanford University
- 7. University of California Berkeley
- 11. University of California – Los Angeles
- 22. University of California – San Francisco
- 23. (Tied) California Institute of Technology
- 23. (Tied) University of California – San Diego
- 74. University of Southern California
- 95. University of California – Davis
- 99. University of California – Irvine
- 100. University of California – Santa Barbara
Noe Padilla is a Northern California Reporter for USA Today. Contact him at npadilla@usatodayco.com, follow him on X @1NoePadilla or on Bluesky @noepadilla.bsky.social. Sign up for the TODAY Californian newsletter or follow us on Facebook at TODAY Californian.
The most significant seismic event in California’s history – an earthquake of 7.9 magnitude – occurred in 1857 and ruptured about 225 miles on the San Andreas Fault. That earthquake, dubbed the last “Big One,” killed two people and produced shaking that lasted between one and three minutes.
Since then, California has exploded in population and been has been rattled by many major earthquakes. But Californians have also grown familiar with the existential dread of another “Big One” looming.
Researchers have long warned there will be another massive earthquake in Southern California. They just don’t know when.
A recent study says warning signs continue to grow in 2026. The San Andreas and San Jacinto fault systems have reached the highest stress levels seen in the past 1,000 years, according to a study conducted at the University of Hawaiʻi at Mānoa.
The San Andreas fault runs throughout the state, passing through San Francisco and San Bernardino, while the San Jacinto fault is in Southern California and runs through Riverside, San Diego and Imperial Counties.
Unable to view our graphics? Click here to see them.
Why the San Andreas Fault is so risky
Faults rupture on the San Andreas Fault approximately every 150 years, according to UCLA professor Jonathan Stewart, who studies earthquake engineering.
But it’s been over 300 years since the last “large rupture” occurred south of the 1857 Fort Tejon earthquake, Stewart said. “As far we know it didn’t produce a large rupture since around 1690. To the present that’s a lot more than 150 years, so there’s a lot of build-up. That doesn’t mean it’s going to happen immediately, it just means there is more stress built-up.”
When the earthquake happens, it is likely to cause a lot of damage. One major concern is the state’s water systems.
“An earthquake like this would rupture most, if not all of the major aqueducts bringing water into Southern California,” Stewart said. “Most people will not be in a collapsed structure after this earthquake, but everybody’s going to be affected by water problems.”
Study highlights longstanding risk
To investigate the probability of an earthquake occurring, researchers built a physics-based simulation and fed it the earthquake history from the region. By doing so, they were able to estimate how much stress has built up along the southern San Andreas and San Jacinto fault systems.
The results suggest that catastrophe may be near.
“Right now, with stress at historically high levels across the region and more than 160 years elapsed since the last major rupture, the system is in a critically loaded state,” lead author Liliane Burkhard said.
Most importantly, the Cajon Pass, at the junction of the San Andreas and San Jacinto faults, could facilitate a joint rupture of the two faults. This scenario, according to the study, would probably be “significantly more damaging” than a single-fault event.
How is earthquake safety considered?
Seismic hazard assessments are critical for the safety of the millions of residents in California’s densely-populated and earthquake-prone areas.
Seismic Hazard maps show the relative hazard associated with earthquakes using information on past faults, the behavior of seismic waves and the near-surface conditions of specific locations, according to the U.S. Geological Survey.
Larger values indicate a stronger level of earthquake shaking. A peak ground velocity of 269 cm/sec would correspond to extreme shaking and heavy damage. For reference, the largest ground velocity recorded in Taiwan’s 1999 Chi-Chi earthquake reached 318 cm/sec and had a magnitude of 6.7.
That earthquake killed more than 2,000 people and incurred approximately $14 billion in damage.
How do the fault lines rupture?
The San Andreas and San Jacinto faults are strike-slip faults, which typically cause horizontal displacement. Both faults comprise the geologic boundary between the Pacific Plate and the North American Plate.
If a major earthquake occurs on the San Andreas fault, it is likely to produce surface rupture, which occurs when a fault breaks through to the surface. Most earthquakes, however, do not produce surface rupture, according to USGS.
In a major rupture, strong shaking could cause severe damage near the fault and in areas built on soft or water-saturated soils, which can amplify shaking. Rupture can directly offset roads, buildings, and other structures that span the fault trace.
Although the study helps explain the risk associated with the California fault lines, Burkhard emphasized that it shouldn’t serve as a forecast.
“This is not a prediction of when an earthquake will happen,” Burkhard said. “However, studies like this are important contributions to national and global earthquake hazard research in that we are using rigorous, quantitative science to better understand the risk facing millions of people.”
Contributing: Brandi D. Addison, USA TODAY NETWORK
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