Merced County businessman sued by partners for nearly $9 million

Lawsuit alleges Edwin Anthony embezzled funds from businesses co-owned with Surinder Kumar and Kasturi Lal

Published on Feb. 12, 2026

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A Merced County businessman is being sued by his two business partners for nearly $9 million, according to court records. The lawsuit alleges Edwin Anthony embezzled $8,790,700 in corporate funds from businesses co-owned with Surinder Kumar and Kasturi Lal over a nine-year period, using the money for personal expenses such as cars, alimony payments, and a house.

Why it matters

The case highlights the risks of business partnerships and the potential for fraud, especially when it involves the misuse of government disaster relief funds. It also raises questions about oversight and accountability in small businesses.

The details

According to the lawsuit, Anthony and his partners owned Kainth Brothers Inc., Valley Prime Hospitality Inc. and Merced Hotels Management Inc., which operate the County Inn & Suites in Fresno and the Courtyard Marriott and Quality Inn in Merced. The lawsuit alleges Anthony used the embezzled funds to pay for cars, alimony payments to his ex-wife Arti Bala, and a house. Bala and Anthony's son Arvin Kainth are also listed as defendants.

  • The lawsuit was filed on January 28, 2026.

The players

Edwin Anthony

A Merced County businessman being sued by his two business partners for nearly $9 million.

Surinder Kumar

One of the business partners suing Edwin Anthony.

Kasturi Lal

One of the business partners suing Edwin Anthony.

Arti Bala

Edwin Anthony's ex-wife, who is also listed as a defendant in the lawsuit.

Arvin Kainth

Edwin Anthony's son, who is also listed as a defendant in the lawsuit.

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What they’re saying

“My clients have no comment at this time other than expressing their desire to see this matter toward a result at trial that will compensate them for all damages they have suffered.”

— David Emerzian, Plaintiffs' lawyer (Merced Sun-Star)

What’s next

The judge will need to determine if the allegations of embezzlement and misuse of funds are valid, and if so, order Edwin Anthony and the other defendants to repay the nearly $9 million in damages sought by the plaintiffs.

The takeaway

This case highlights the importance of strong financial controls and oversight in business partnerships, as well as the potential consequences of fraud and misuse of funds, especially when government disaster relief loans are involved. It serves as a cautionary tale for small business owners to carefully vet their partners and implement robust accounting practices.