February 16, 2010
Business fraud scandals devastate L.A.’s Iranian Jews.
(Page 4 - Previous Page)
Namvar’s creditors include investors in Namco, those who lent money to Namco and received a personal guarantee from Namvar, lenders to Namco who received a lien on property owned by Namvar or one his entities, and those who gave profits from certain real estate transactions to Namvar.
Many of Namvar’s 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.
“My father is 87 years old. He speaks very little English, cannot work and lost about $200,000 in equity he pulled out of his home to invest with Namvar — and now the bank is foreclosing on his home because Namvar cannot give him back his money,” said one 42-year-old Iranian Jewish woman who lives on the Westside and asked that her name be withheld for fear of being ostracized by the community.
She was unemployed for the past year, but now works part time as an executive assistant. She said her father is depressed, now lives with her in her one-bedroom apartment, and his creditors have been harassing them both.
When interviewed a year ago, a substantial number of Namvar’s creditors said they believed they would be repaid by the Iranian Jewish businessman because of his family’s longstanding reputation in the community, but today many of them have changed their minds.
Representatives of a handful of Southern California’s nonprofit Iranian Jewish organizations that offer relief to those in need said they have been overwhelmed by calls from Iranian Jewish victims of the various alleged investment fraud scandals. With their budgets already hard-hit by the economic downturn, the organizations have been unable to help everyone.
“I recently received an anonymous phone call from an Iranian Jewish widow with three kids here in Los Angeles, who invested $20,000 of her life’s savings with one of these Iranian Jewish businessmen and lost everything,” said Manijeh Youabian, who heads the social voluntary efforts of the SIAMAK organization, an L.A.-based Iranian Jewish nonprofit that helps people in need. “She cried and asked for a $10,000 loan from us, because she did not have anything to cover her expenses, feed her children or pay the rent.”
Aside from the shame of being looked down upon by other community members, Youabian said many Iranian Jews wouldn’t publicly admit to their dire circumstances because they still believe they will eventually be paid back, or fear being further ostracized.
“Many of them will say nothing because they have children of marrying age and don’t want to hurt their children’s chances of getting married in the community,” Youabian said. “Others are afraid they’ll never see their money again if they speak out, and some are even afraid that the people who defrauded them will besmirch their names in the community in retaliation for their speaking out.”
Still, some community members put part of the blame on the individual investors.
“There are also some victims from our community who should blame themselves for just being greedy, and they should not have pulled out all the equity from their only homes just to make a few percentage [points] more in income,” activist Fouladi said.
Fouladi, 77 and a Westside resident, recently filed suit against Joseph Boodaie to recover his life savings, an amount close to $400,000, which he invested in Boodaie’s company.
Fouladi declined to comment on his own case, as litigation is still pending, but he said he has been forced to work as an employee at a downtown Los Angeles bank to earn a living, instead of being able to enjoy his retirement. Fouladi recounted a time when, nearly 11 years ago, he faced financial troubles with his own creditors.
“About 11 years ago, I had run into financial problems with the bad economy that destroyed my business and left [me with] a debt of more than $1 million,” Fouladi said. “Instead of leaving my creditors without anything, I sold my only home here in the U.S. and repaid to the last penny every single one of my creditors — even the ones overseas in Asia.”
Fouladi’s suit may be the least of Boodaie’s problems, as creditors from within and outside the Iranian Jewish community come forward with suits accusing Boodaie of fraudulent business dealings. Last May, the Texas-based Comerica Bank filed suit against Boodaie and his two wholly owned businesses, Mensch Enterprises LLC and All Century Inc., for fraud and failing to repay a nearly $5 million loan. The suit also states that while Boodaie had at the time a personal net worth of more than $300 million, he allegedly knew but failed to disclose that the properties he offered as collateral to Comerica in exchange for loans did not belong to him or to his businesses. Likewise, the suit alleges that Boodaie failed to disclose that the properties he offered as collateral to Comerica had higher liens against them and that other creditors had priority security interests on these properties.
Even after all that has occurred and all the fallout and talk, many cash-strapped Iranian Jews told The Journal they still believe their community members are genuinely honest and hard working.
Perhaps this persistent faith comes from a deeper sense of commitment to maintaining harmony within this particular culture. After the lawsuits finally are settled and the financial chaos resolved for the hundreds of local Iranian Jews involved, there is fear that longer-term damage could persist, and that the community’s once stellar reputation in the business world has been forever scarred.
For ongoing coverage on this and other aspects of the L.A. Iranian Jewish community, as well as a video interview, visit Karmel Melamed’s Iranian American Jews blog: jewishjournal.com/iranianamericanjews.