Sacramento financial services industry professionals may be interested to hear that a 54-year-old ex-investment manager has been accused of running a Ponzi scheme. The Los Angeles resident was indicted on Dec. 8 by a federal grand jury on 41 counts of alleged white collar crimes involving fraud. The man is well-known in the Iranian-Jewish community for hosting a Farsi language radio show about investing.
Until 2010, the radio host operated an investment advisory firm out of Beverly Hills, through which he allegedly sold in excess of $20 million worth of investment products to over 100 investors (mostly Iranian-Jewish residents he attracted through his radio program). Allegedly, the man falsely told investors that his company made highly secure investments that were in line with the safe strategies he recommended on his radio show. But the indictment alleges that he used investor money to engage in high-risk option trading strategies to finance payouts to earlier investors, and to finance his own living expenses. But he purportedly didn't inform investors in 2008 when he lost more than $15 million of their money on bad option trades.
The indictment claims the radio host took out loans from banks to satisfy obligations and pay investors to extend the scheme while funds were dwindling. It is also said that he lied to lending banks about his company's financial status in order to obtain those loans. In addition to the radio host, a 44-year-old Santa Monica securities attorney has been charged with helping him cover up evidence of the fraud in order to obstruct the SEC's investigation.
If convicted of all 41 counts, the investment manager could face a federal prison sentence of more than 700 years. The attorney could face more than 100 years. Without a doubt, this case highlights the risk for Californians facing federal white collar crimes allegations. But whether in Sacramento or Los Angeles or anyplace else, individuals accused of white collar crimes must always be presumed innocent until proven otherwise in court, and a vigorous and well-organized legal defense can often reveal holes in the prosecution's case. The intention of such a strong and meaningful defense would be an acquittal or a significant reduction of charges.
Source: loansafe.com, "A Former Investment Fund Manager From LA Charged on Federal Financial Scam Charges," Alex Ferreras, Dec. 9, 2011