Los Angeles real estate investor Ezri Namvar, the former owner of such high-profile properties as the Marriott hotel in downtown Los Angeles and the Cal Neva hotel and casino near Lake Tahoe, was convicted on wire fraud charges stemming from allegations that he stole $21 million from investment clients.
A federal jury in Los Angeles convicted him Thursday on four wire fraud charges related to his company, Namco Financial Exchange Corp., which held proceeds from real estate sales until clients needed the money for new transactions.
Prosecutors alleged that Namvar diverted money from four clients without their permission. Exchange companies such as the one Namvar operated are set up to let investors shelter proceeds from real estate sales until they reinvest the money, enabling them to avoid paying capital gains taxes.
Namvar, 59, is scheduled to be sentenced Aug. 22. The four charges combined carry a maximum sentence of 80 years in prison.
Jurors also convicted Namvar's top assistant, Hamid Tabatabai, on the same charges. He is scheduled to be sentenced the same day.
Namvar's attorney, Marc Harris, said he was "extremely disappointed" in the jury's verdict. He said he would appeal. Harris had moved for a mistrial after the court declined to let him present evidence that Namvar had intended to sell properties to repay his clients.
"We strongly feel that we were not permitted to put extremely critical information before the jury and that the government took improper advantage of that," Harris said.
Namvar remains free on bond until sentencing.
"He's very disappointed, but he's confident he'll ultimately be vindicated," Harris said.
In addition to the exchange company, the Iranian-born Namvar ran Namco Capital Group Inc., which raised hundreds of millions of dollars from private investors and used it to buy commercial real estate. Many of those investors were Iranian immigrants who said they had felt comfortable doing business with one of their own.
Near the end of 2008, angry clients forced Namvar's companies into bankruptcy. The clients said they were owed more than $525 million.
Last year, a court-appointed bankruptcy trustee issued a report that accused Namvar of treating investor money "as his personal family piggy bank." The report said that company money was used to pay for his brother's wedding and that "many of the remaining valuable assets seemingly belong to family members."
Los Angeles attorney A. David Youssefyeh, who helped organize the investors' bankruptcy case, said his clients were thrilled with Thursday's verdicts.
"For the people that did business with Mr. Namvar, his conviction is not a big surprise. They all knew he was a crook. To have 12 independent people come in and validate what they knew all along is a nice feeling," Youssefyeh said. "We hope he gets the maximum sentence of 80 years in light of the size of the crimes and that the judge makes sure justice is done."
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