January 18, 2011
Trustees sue Namvar’s wife over diamond, funds
Trustees sue Namvar’s wife over diamond, funds
Ilana Namvar, the wife of indicted Brentwood Iranian Jewish banker and real estate investor Ezri Namvar, is being sued by trustees appointed to her husband’s bankruptcy case over her refusal to return a 12- to 13-carat diamond and other jewelry, as well as more than $1 million, which her husband allegedly transferred to her nearly three years ago.
In the suit, filed on Jan. 6, trustees R. Todd Neilson and Bradley D. Sharp allege that one of Namvar’s companies, Namco Capital, sent nearly $400,000 to a company in Israel as payment for the diamond in May 2007. The suit alleges that Namvar or Namco gave the diamond to Ilana Namvar for safekeeping. The suit also indicates that not only has Ilana Namvar refused to turn over the diamond to the trustees, but she has also refused to provide them with an inventory of the jewelry purchased with funds from her husband’s company or from their jointly held bank account.
Namvar’s wife claims the diamond and her other jewelry were purchased with funds she had acquired prior to her marriage and therefore the items fall outside of the bankruptcy trustees’ reach to recover, according to the lawsuit.
In addition, the lawsuit against Ilana Namvar alleges that in November 2008, prior to her husband’s involuntary Chapter 11 bankruptcy, she either alone or with her husband transferred $1.1 million from their joint account at Ezri Namvar’s now-defunct Security Pacific Bank to an account with Washington Mutual, which was solely in her name. The trustees have made repeated requests for the funds, which could be used to pay back Namvar’s creditors, but Ilana Namvar has refused to cooperate, according to the lawsuit.
Attorneys representing the Namvars and the bankruptcy trustees did not return calls for comment.
The current suit against Ilana Namvar is not the first filed by the bankruptcy trustees against Namvar’s family members to recover funds that Namvar and his companies allegedly swindled from investors. Last October, trustees sued Namvar’s family members — four children, four brothers, three sisters as well as their spouses and children — to recover millions for Namco investors. The October suit alleges that Namvar’s four brothers used a large portion of the investors’ funds to purchase their own personal real estate ventures and even used $200,000 to pay for his youngest brother’s wedding.
The recent civil lawsuits have been the least of Namvar’s problems in light of the criminal charges filed against him last year. This past September, 59-year-old Namvar was arraigned in U.S. District Court in downtown Los Angeles on five counts of fraud in failing to return $23 million in funds that clients’ of his Namco Financial Exchange Corp. had given him for safekeeping before it was reinvested in real estate. Namvar declined to enter a plea at the time and was released after posting $300,000 bail. The case is currently pending in federal court.
Namvar was forced into involuntary bankruptcy in December 2008 and accused by investors of creating a Ponzi scheme that lost as much as $500 million loaned to him. The petition followed 17 lawsuits filed against Namvar, Namco, entities owned by Namvar and other Namvar family members, alleging breach of contract and contractual fraud in a case that attorneys estimate involves 300 to 400 creditors, the majority of them Iranian Jews.
The creditors include investors in Namco Capital Group, those lenders to Namco who received a personal guarantee from Namvar, lenders to Namco who received a lien on property owed by Namvar or one his entities and those who gave profits from their real estate transactions (1031 funds) to Namvar, according to the lawsuits.
A report released last February by the bankruptcy trustees showed that Namco owes more than $500 million to more than 170 secured and unsecured creditors. The report also states that Namco is owed more than $600 million from loans it made to 16 members of Namvar’s family, various limited liability corporations owned by Namvar and to more than 60 individuals and entities. In addition, the report indicates that Namvar gave himself a loan of more than $32 million, and he also gave $50 million to each of his four children.
Many of the Iranian Jewish creditors are low- to middle-income couples, individuals or retired seniors who invested their small savings with Namvar and his company, hoping to receive higher interest rates than what most banks were offering at the time. Their investments ranged anywhere from $10,000 to $300,000, and most said they had lost all hope of regaining their funds.