LOS ANGELES — A former investment manager in Beverly Hills has been indicted on multiple charges of fraud for bilking millions of dollars from investors and then lying to banks to try to obtain loans to cover the losses. His attorney has also been indicted for trying to cover up the scheme.
John Farahi, 54, the owner of New Point Financial Services in Beverly Hills is charged with selling more than $20 million in fraudulent investments between 2005 and 2010.
He sold investments he called debentures to more than 100 investors, most of whom were part of his Iranian Jewish community. Farahi is a former Reno, Nevada, city council member and was a Farsi-language radio investment advisor. Many of his clients came from his radio audience.
His radio show touted a conservative investment philosophy and he told investors he was putting their money in low-risk investments like certificates of deposit, TARP-backed corporate bonds and deeds of trust backed by substantial amounts of equity, according to the U.S. Attorney for the Central District of California.
Instead he used the money to support his family's lavish lifestyle and to make Ponzi-style payments to early investors and to trade in high-risk future options. He lost at least $15 million of the money. In the face of trading losses, he tried to draw down extensive lines of credit at banks by lying to the banks about his financial situation.
When the SEC opened an investigation into New Point Financial Services, Farahi's attorney, David Tamman, 44, of Santa Monica, allegedly helped him cover-up the fraud. They are both charged with conspiracy to obstruct justice and Farahi is charged with mail fraud, wire fraud, offering to sell unregistered securities and other charges.
The SEC previously obtained a permanent injunction against Farahi conducting business and freezing his assets. Farahi has surrendered to authorities and Tamman is expected to appear in court in January.
I think the feds should move out of our lives. People make wrong decisions, lose money etc. If the feds would step out, they wouldn't make these decisions. People have to take responsibility for their actions. Not every time a partner or manager scams someone, does the feds have the responsibility to investigate. No these people didn't make wise decisions to invest with madof, or any of the other thieves. they did the most foolish thing, now they should be more careful not rely on the feds prosecuting.
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