Cover Story

February 16, 2010

Frayed Trust

Business fraud scandals devastate L.A.’s Iranian Jews.

By Karmel Melamed

Tweet

Share

(Page 2 - Previous Page)

“They lured victims with false promises of investment safety while secretly enriching themselves and diverting investor funds for their personal use,” Rosalind R. Tyson, director of the SEC’s Los Angeles Regional office, said in a statement.

In conjunction with the suit, the SEC obtained an order temporarily freezing the Farahis’ and NewPoint’s assets until the government investigates the case further.

Numerous Iranian Americans claiming to be victims of the Farahis’ alleged investment fraud declined to comment on the case, citing privacy concerns, but court-filed declarations from NewPoint’s Iranian American investors shed light on the alleged scheme.

According to one declaration, Edmond Tahmasian, a 35-year-old Iranian American resident of Glendale, invested more than $100,000 over eight years with NewPoint, in what he was told at first by Farahi were low-risk certificates of deposit. In his statement, Tahmasian says that Farahi later informed him that his funds were invested in unsecured corporate bonds. He also states in his declaration that while his initial $30,000 investment was returned to him by NewPoint, he was never given the balance of the funds he invested and was unaware that Farahi had invested his money in high-risk stock options.

Representatives from the SEC’s Los Angeles offices declined to comment on the case because it involves pending litigation. KIRN General Manager John Paley did not return calls for comment, but Hossein Hedjazi, the station’s former program director, defended Farahi, whom he calls a friend.

“I was a program director at that station for seven years. I monitored every program, and during that time I never heard him [Farahi] encourage people to come to his office, nor did he advertise for his firm on the air or solicit business for himself,” Hedjazi said. “He was unpaid for his work at the radio and placed a lot [of] his own personal time doing the community a real service by providing listeners with the most accurate information about the economy in the U.S.”

Hedjazi, who said he has known Farahi for nine years, said the former radio host was well respected by listeners for the knowledge he shared, and that he regularly helped impoverished Iranian Americans in the city.

Both Farahi and his wife moved in high-end social circles within the local Iranian Jewish community and were involved in organizing fundraising events at the West Hollywood-based Temple Beth El, which is owned and operated by the Iranian American Jewish Federation (IAJF). Farahi’s wife, a former IAJF board member, also helped organize high-profile fundraising events in the community for Hilary Clinton’s 2008 presidential bid.

Michael Nazarian, president of the IAJF, and Kamran Broukhim, the organization’s chairman, did not return calls for comment on Farahi’s case. Iranian Jewish community leaders and creditors have kept quiet about all three men, in keeping with a long-standing community taboo against publicly discussing potentially embarrassing incidents. Others have not openly voiced their opinions, perhaps for fear of losing friendships or social status as well as wanting to avoid the sense of shame the community sometimes imposes on victims of financial fraud.

Nevertheless, a small number of people in the community have spoken out. During the past year, for example, local Iranian Jewish groups with social ties to Namvar, including the Beverly Hills-based Nessah Synagogue, have faced increasing criticism, and tempers have flared among creditors in the community who lost money invested with Namvar or his company.

An anonymous letter written in Farsi circulated within the community in late 2009, accusing the Nessah congregation’s leadership of remaining silent about the plight of Namvar’s creditors, while keeping Namvar in his place on the synagogue’s board of trustees.

Members of Nessah’s leadership declined to comment on any of the investment fraud scandals in the community, but the synagogue’s board of directors offered a joint statement to The Journal acknowledging the lawsuits against Namvar and responding to calls for Namvar to be removed from their board.

On a single page

1 | 2 | 3 | 4    Next Page

A version of this article appeared in print.

---

Post your comment below!

Click here to return to the homepage.

COMMENTS

We welcome your feedback. Comments may not exceed 700 characters.

Privacy Policy

Your information will not be shared or sold without your consent. Get all the details.

Terms of Service

JewishJournal.com has rules for its commenting community.Get all the details.

Dear Editor,  Thank you for the story “Frayed Trust”. I thought it was unfortunate and in poor taste to display a Persian rug and jagged red fonts to illustrate the cover of the main story. The display was unnecessary and served no other purpose than to ferment unfortunate stereotypes. Could you not have picked some other illustration to capsulize the essence of the main story?

Comment by adriana gorbaty on 2/19/10 at 9:58 pm

Sometimes, you just can’t trust people. Falling into a business scam is definitely bad news that has profound effects on the financial community.

Comment by Football Betting on 2/22/10 at 5:29 pm

Unfortunately, my family is a victim of one of these three evils in the article who my husband invested with, all of our life savings earned over 22 years. He ignored my pleadings to not to invest with this fraudulent person. He trusted him and was deceived by the high interest rate. Today our family is in crisis. We are getting divorce, have no savings left. You pay a high price for trusting someone because you never know who is going to take advantage of your trust. Where is the justice?

Comment by Sherry on 2/23/10 at 7:56 pm

It is awful to hear stories like Sherry’s. The pain of being scammed and losing trust is lifelong. I hope that there is indeed justice for her and her loved ones.

Comment by Mary on 1/06/11 at 8:33 am

Post a Comment

Name:
Email:

Type the word you see below:

Comment:

Remember my personal information

Notify me of follow-up comments?