Another member of the local Iranian community has been arrested for allegedly operating a Ponzi scheme.
Shervin Neman, also known as Shervin Davatgarzadeh, a 31-year-old Iranian man, has been accused of defrauding nearly a dozen people — most of them local Iranian Jews — of more than $3 million. He was arrested by the FBI on April 26 in his Century City home after three criminal charges were brought against him for allegedly operating a Ponzi scheme.
The three fraud charges in the indictment each carry a statutory maximum sentence of 20 years in federal prison, according to an FBI press release.
According to the federal indictment, from June 2010 to June 2012, Neman claimed to be a hedge fund manager and lured primarily Iranian Jewish investors into giving him $7.5 million on promises of investing their money in foreclosed residential properties and stocks, including pre-initial public offering shares.
In April 2012, the Securities and Exchange Commission (SEC) filed a civil complaint against Neman, his firm, Neman Financial Inc., and his wife, Cassandra Neman, in allegedly operating a Ponzi scheme whereby Neman took his investors’ money and used it to pay back his earlier victims or on a lavish lifestyle for himself and his wife.
The civil complaint against Neman alleges that he spent nearly $1.6 million of his victims’ money to pay for his wedding and honeymoon, his wife’s $60,000 engagement ring, luxury cars, VIP tickets to entertainment venues, jewelry, hotels and restaurants, as well as to lease and redecorate a new office in a high-end Century City office building.
The complaint alleges that in most instances Neman had his victims wire their funds to his personal bank account or to write checks to him personally, which he deposited into his personal account.
A federal court judge also issued a restraining order freezing Neman’s assets and shutting down his Ponzi scheme last year, according to an SEC press release. Yet in May 2012, Neman again allegedly solicited $2 million from another investor — with false promises that Neman could obtain pre-IPO shares in Facebook, according to the indictment — to pay for his attorneys and pay back other earlier victims of his Ponzi scheme in violation of his restraining order. In June 2012, Neman sent a later victim a check for more than $2 million that purported to be the return on the Facebook investment, but that check bounced, the criminal indictment states.
The criminal charges brought against Neman are not unique for Southern California’s tight-knit Iranian-Jewish community, which has been devastated in recent years by Ponzi schemes perpetrated by members of its community.
In March, John Farahi, a popular 56-year-old Iranian-Jewish radio talk-show host and investment adviser, was sentenced by a U.S. District Court to 10 years in federal prison for operating a multimillion-dollar Ponzi scheme against local Iranian-Americans. Farahi was ordered by the court to pay more than $24 million in restitution to close to 60 victims.
Prior to that, Ezri Namvar, 62, a longtime leading Iranian-Jewish businessman and philanthropist in Los Angeles, was sentenced in October 2011 to seven years in federal prison for stealing $21 million from four clients. Namvar also was ordered by the court to pay back $21 million in restitution to his victims, yet he is believed to have allegedly bilked investors — who put money into his $2.5 billion real estate portfolio before the 2008 market crash — out of hundreds of millions of dollars.
Iranian-Jewish community leaders and victims have kept quiet about Farahi and other Iranian-Jewish investors charged in recent years with running Ponzi schemes, in keeping with a long-standing community taboo against publicly discussing potentially embarrassing incidents. Iranian-Jewish community leaders at the Beverly Hills-based Nessah Synagogue and West Hollywood-based Iranian American Jewish Federation did not return calls seeking comment.