charges stemming from allegations that he stole $21 million from investment clients; the charges carry a maximum 80-year-sentence.
A Los Angeles federal jury convicted Ezri Namvar, 59, on four wire fraud charges related to his company, Namco Financial Exchange Corp., which held proceeds from real estate sales until clients requested the money for new transactions. Namvar’s top assistant, Hamid Tabatabai, was also convicted on the same charges. Both men are set to be sentenced August 22.
US Attorney Andre Birotte Jr. alleged that Namvar—who formerly owned properties including the Marriott Hotel in downtown Los Angeles and the Cal Neva hotel and casino near Lake Tahoe—diverted money from four clients without permission. Exchange companies like the one Namvar ran are created to let investors shelter proceeds from real estate sales until they reinvest the funds; this allows them to avoid paying capital gains taxes.
In addition to the exchange company, the Iranian-born businessman ran Namco Capital Group Inc., which raised hundreds of millions of dollars from private investors—many of them members of the Iranian Jewish community—and used the funds to buy commercial real estate. Many of Namvar’s clients were Iranian Jewish immigrants who trusted doing business with one of their own. But near the end of 2008, Namvar’s clients forced his companies into bankruptcy, claiming they were owed more than $525 million.
Namvar also used $21 million of the $25 million his clients entrusted to him for unauthorized purposes, including paying creditors and personal use. Last year, a court-appointed bankruptcy trustee accused Namvar of treating his clients’ investment money “as his personal family piggy bank” and said “many of the remaining valuable assets seemingly belong to family members.”
Defense Attorney Marc Harris said said he was “extremely disappointed” in the verdict, adding that he would appeal the decision. Harris had moved for a mistrial after the court declined to let him present evidence that reportedly showed Namvar had intended to sell his properties to repay his clients.
“We strongly feel that we were not permitted to put extremely critical information before the jury and that the government took improper advantage of that,” Harris said.
The Iranian-American defendant remains free on bond until his August sentencing.
