A former Beverly Hills money manager who used his Persian-language radio show to attract investors and admitted swindling them out of at least $7 million through a Ponzi scheme was sentenced Monday to 10 years in federal prison and ordered to pay restitution of more than $24 million.
John Farahi, 56, of Bel Air Estates, who operated the Beverly Hills-based New Point Financial Services Inc., was sentenced by United States District Judge Phillip S. Gutierrez at the U.S. District Court in the Roybal Federal Building on Temple Street downtown, according to Thom Mrozek, public affairs officer in the United States Attorney's Office of the Central District of California in Los Angeles.
Gutierrez ordered Farahi to pay $24,366,617 in restitution to 59 victims, Mrozek said in a news statement.
Farahi pleaded guilty in June 2012 to four felony counts—mail fraud, loan fraud, selling unregistered securities and conspiracy to obstruct justice—while collaborating with his corporate attorney to hide the fraud.
Farahi acknowledged in a plea agreement that his Ponzi scheme resulted in losses of more than $7 million. Prosecutors were able to demonstrate, however, that the actual losses were well above $24 million, Mrozek said.
The former Beverly Hills money manager, who ran a radio show on KIRN-AM, largely targeted wealthy members of the Iranian-Jewish community, promising them conservative investments in corporate bonds backed by the Troubled Asset Relief Program.
Farahi admitted in his plea agreement that he used his victims’ funds for such unauthorized purposes as paying off prior investors and subsidizing options futures trading, Mrozek said in his news statement. Farahi also acknowledged violating federal securities laws by selling unregistered securities and failing to comply with the SEC’s rules and regulations for the activity.
Farahi further admitted that he conspired with his attorney to obstruct an SEC investigation by altering documents and providing false and misleading testimony under oath to the SEC on three separate occasions.
Farahi’s attorney, David Tamman, 46, of Santa Monica, was found guilty last year of 10 counts, including obstruction of justice, altering records in a federal investigation, and being an accessory after the fact to Farahi’s crimes.
According to the evidence presented at Tamman’s trial, the lawyer conspired with Farahi to obstruct the SEC investigation into the one-time Beverly Hills money manager’s Ponzi scheme. Tamman was suspended from practicing law earlier this year by the California State Bar and is scheduled to be sentenced by Judge Gutierrez on May 20, Mrozek said.
The case against Farahi and Tamman is the result of an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Bureau of Investigation.