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Exclusive: FBI searched California real estate firm linked to bad bank loans

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Exclusive: FBI searched California real estate firm linked to bad bank loans


NEW YORK, Oct 30 (Reuters) – The FBI last month searched the offices of a California real estate investment firm Continuum Analytics, which is linked to bad loans recently disclosed by Zions (ZION.O), opens new tab and Western Alliance (WAL.N), opens new tab, according to legal correspondence seen by Reuters.
Continuum Analytics is an affiliate of the little-known Cantor Group funds which Zions and Western Alliance have said defaulted on about $160 million in loans, spooking markets already on alert for signs corporate credit is weakening.

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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.

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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.

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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.

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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.

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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

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After exile, California tribes could help run their ancestral redwoods again

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After exile, California tribes could help run their ancestral redwoods again


Daniel Felix, 10, looks out from atop a gargantuan stump of an old-growth redwood on his tribe’s ancestral land. Once, this forest on California’s North Coast was replete with the ancient behemoths that can live beyond 2,000 years.

Only a fraction are left now, depleted by a logging company before the state acquired the forest in the 1940s.

This is unique public land, Jackson Demonstration State Forest, spanning 50,000 acres. Trees are plentiful here, but they might not live a millennium. California’s 14 demonstration forests are required to produce and sell timber to show — or “demonstrate” — sustainable practices. Money from logging — roughly $8.5 million a year — pays for management of the forests by the California Department of Forestry and Fire Protection, or Cal Fire.

Daniel’s tribe, the Coyote Valley Band of Pomo Indians, has pushed to rein in the cutting — spearheaded by his late great-grandmother, Priscilla Hunter. They’re part of a diverse coalition that includes environmental activists, local politicians and other tribes.

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Now they may finally get their wish. Assemblymember Chris Rogers (D-Santa Rosa) has introduced a bill that would nix the forests’ logging mandate, instead prioritizing values such as carbon storage, wildfire resilience and biodiversity.

The bill represents the latest chapter in a region legendary for fierce battles over logging, and it marks an uncommon alliance between tribes and the environmental movement.

Under Assembly Bill 2494, there could still be logging, but it would have to support those new principles, and the forests would be funded differently.

And it proposes another significant change. It would pave the way for giving tribes a say in managing the lands for the first time since they were forcibly evicted more than a century ago, and for integrating Indigenous knowledge — like cultural burning — into the forests.

“It’s what we dreamed of,” said Polly Girvin, Hunter’s former partner and a retired lawyer focused on Native American issues. “And to have it come true? I’m used to movements that sometimes take 30 years in Indian Country to get to the justice you’re seeking.”

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Kids play in the stump of an ancient redwood during a potluck held after the spirit run in Jackson Demonstration State Forest last month.

(Paul Kuroda / For The Times)

Some backers say the bill offers a new economic path forward for communities behind the so-called redwood curtain. With the decline of logging and cannabis, they see tourism driven by ultramarathons, mushroom foraging and other outdoor activities as a financial savior.

“If we had an increase of 10% of visitors coming to our county because of recreational opportunities, that would more than surpass all of the timber tax in our county,” Mendocino County Supervisor Ted Williams said, projecting an increase in money from a lodging tax.

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But the push to reshape forest management is fiercely opposed by loggers and mill owners, who say their work is sustainable and provides blue-collar jobs in a region where they’ve dwindled. Already California imports most of its wood from Oregon, Washington and Canada.

“California has the most rules and regulations of anywhere in the world so all they’re doing is exporting the environmental impact to somewhere else, still using the product,” said Myles Anderson, owner of a logging company in Fort Bragg founded by his grandfather. “It’s pretty disgusting, really.”

Anderson believes the bill will greatly reduce logging, even stop it altogether. In his office, with photos of him and his father at a logging site decades ago, he points out it’s sponsored by the Environmental Protection Information Center. Why else would they and other environmental groups “support it if they didn’t see the same thing that I’m seeing?”

Tribal runners in Jackson Demonstration State Forest.

Last month, activists who have sought to rein in logging at Jackson held their first major gathering in about four years, galvanized by the bill that they see as a significant step in the right direction.

(Paul Kuroda / For The Times)

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A new but old fight

About five years ago, community members caught wind of plans to chop down towering redwoods within Jackson, near the coastal town of Caspar. Priscilla Hunter would come out to the forest “and could hear them crying — it was our ancestors,” said her daughter Melinda Hunter, the tribe’s vice chairwoman. “Then she had to protect [the trees].”

Environmental activists and Native Americans, not historically allies in the region, joined forces to fight it. “Forest defenders” camped out high in the canopy and blocked logging equipment with their bodies. Some were arrested.

The uprising harked back to the 1980s and 1990s, when iconic environmentalist Judi Bari led Earth First! campaigns against logging in the region. Many of the old tree sitters — white-haired and brimming with stories of Bari — have come out of the woodwork for the latest battle.

For them, it was a win. Cal Fire paused new timber sales and, citing public safety, halted some that were underway — including one expected to generate millions of dollars for Myles Anderson’s logging company.

“We were left with nothing,” Anderson said.

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Then, last year, Cal Fire approved the first harvest plan since that hiatus. It riled up the sizable, ecologically minded community.

Jessica Curl, 47, remembers growing up nearby “in a terrain of trunks” as trucks carried out logs. Now the redwoods are regrowing, “gorgeous” and gobbling carbon, she said.

“We’re so lucky to live in an area where we have this amazing climate-change mitigation tool, that if we would just leave it alone would do this amazing work that we’re trying to think of all these cool, inventive things to do.”

Isidro Chavez receives burning sage after a run in Jackson Demonstration State Forest.

Isidro Chavez receives burning sage, or smudging, after a run in Jackson Demonstration State Forest. Smudging is a ritual used to cleanse spaces and individuals of negative energy, promote calm and improve mood.

(Paul Kuroda / For The Times)

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Tears of grief, resolve

A group of “spirit runners” — a Native American tradition of bringing prayer — sprinted through the heart of Jackson forest as rain poured through the canopy. The mid-April event marked activists’ first major gathering since protests wound down in 2022.

Attendees gathered in a circle to wait for them. Misty Cook, of the Sherwood Valley Band of Pomo Indians, read a statement as eyes misted all around:

“All the living things around us, they miss us. They miss the language. They miss our touch, our hands, touching all of the things — the water, the plants. They miss the songs. They miss the beat of our footsteps and our voices, and they miss the children’s laughter and play, which was so important. They want us to gather them, to use them and to share them. Otherwise they will get sick and possibly die.”

Cal Fire launched a tribal advisory council to bring Indigenous perspective into Jackson. But some local tribes say it’s not enough because they lack decision-making power.

When the runners arrived, the circle absorbed them. Then they continued on to the site of a controversial proposed harvest, Camp Eight. They wrapped a bandana that belonged to Priscilla Hunter around a small tree — a quiet, somber act where she took her last stand. Runners took turns embracing the trunk.

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Redwoods at the Capitol

In March, Rogers’ bill cleared a committee and is now in the Assembly Appropriations Committee’s suspense file. A hearing is set for Thursday.

Funding is a major point of contention. Environmentalists say funding these forests with timber operations incentivizes cutting bigger trees. Cal Fire maintains decisions are driven by forest health, not industry demand.

AB 2494 would fund the forests through a tax on lumber and engineered wood products. The shift could create “[o]ngoing state costs and cost pressures of an unknown but potentially significant amount, possibly in the low millions of dollars annually,” according to a legislative analysis.

The California Forestry Assn., a timber industry trade group, says the idea is a nonstarter.

Cal Fire declined to comment on pending legislation but Kevin Conway, the agency’s staff chief for resource protection and improvement, said its nearly 80-year history managing Jackson reflects “care and attention.” Since the state acquired the forest, “we have more trees on the landscape, more habitat and those trees are trending larger,” he said.

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For the tribes who have rallied and prayed, a burning question is whether the land will again reflect their vision, or remain shaped by decisions made by others.

Buffie Campbell, executive director of the InterTribal Sinkyone Wilderness Council — co-founded by Priscilla Hunter and one of the groups supporting the bill — said young people wouldn’t be able to fathom the significance of the legislation passing. Maybe that’s a good thing.

“Maybe they don’t need to know about all the fighting that we have to do before they get to go out and enjoy and be tribal guardians stewarding their land.”



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Two GOP candidates for California governor participate in Bakersfield forum

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Two GOP candidates for California governor participate in Bakersfield forum


Two Republican candidates seeking California’s top office were back on the campaign trail and made a stop in Bakersfield on Saturday.

The California Young Republicans and Kern County Young Republicans co-hosted a forum featuring Chad Bianco and Steve Hilton. The event follows two gubernatorial debates last month in which both candidates appeared alongside several Democrats.

The forum happened on Saturday afternoon at the Liberty Center on California Ave.

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The forum came as mail voting is underway ahead of California’s June 2 primary, where the top two vote-getters will advance to the November general election regardless of party.



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Teen dies after losing control of electric motorcycle in Garden Grove

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Teen dies after losing control of electric motorcycle in Garden Grove


A 13-year-old boy riding an electric motorcycle in Garden Grove died after veering into the center median, flying into the air and then slamming onto the roadway, authorities said.

The crash took place shortly before 10 p.m. Thursday in the area of Magnolia Street and Larson Avenue, according to the Garden Grove Police Department. The Police Department received word of the incident via a call from Life360, a family safety and location-sharing app with emergency assistance features.

The Santa Ana teen was critically wounded in the crash, police said. He was loaded into an ambulance and taken to a hospital, where he was later pronounced dead.

The boy was traveling at around 35 mph on a black E Ride Pro electric motorcycle when he struck the median and lost control of the vehicle, according to authorities. Electric motorcycles are primarily designed for off-road riding and are not legal to use on California roadways.

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The teen’s death is the latest in a spate of serious collisions involving electric motorcycles and dirt bikes — some of which have led to serious injuries, death or charges for parents who allegedly allowed their minors to illegally ride the speedy devices.

An Orange County mother was charged with involuntary manslaughter last week after authorities said an 81-year-old Vietnam veteran died from injuries he suffered when her 14-year-old son slammed into him while riding an e-motorcycle, then fled the scene.

In April, a Yorba Linda father was charged with felony child endangerment after authorities alleged his son ran a red light and was hit by a car while riding a modified e-motorcycle capable of reaching up to 60 mph.

Last week, a 19-year-old riding an e-motorcycle was arrested on suspicion of felony evading police and felony reckless driving. He was accused of leading sheriff’s deputies on a speedy chase through a residential area of Oceanside, blowing past multiple red lights and knocking a deputy off a motorcycle.

Electric bikes, motorcycles and dirt bikes have surged in popularity in recent years and are especially popular among teens. However, while e-bikes generally top out at 28 mph and are legal to ride on the street, many e-motorcycles can go twice as fast and are generally not street legal.

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Anyone who witnessed Thursday’s crash in Garden Grove or has a video of the incident is asked to contact Investigator Lang via phone at (714) 741-5823 or email at mlang@ggcity.org.



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