Tuesday, October 18, 2011

'Qualified' Intermediary For 1031 Exchange Deals Gets 7 Years In $20M+ Escrow Ripoff; Confederate To Serve 21 Months For Role In R/E Investor Ripoff

From the Office of the U.S. Attorney (Los Angeles, California):

  • Ezri Namvar, a prominent Los Angeles businessman and real estate developer, was sentenced [] to seven years in federal prison for stealing approximately $21 million from four clients who allowed his “qualified intermediary” company to hold their money in safekeeping before it was reinvested in real estate.

  • Namvar, 59, of Brentwood, was sentenced this morning by United States District Judge Percy Anderson, who also ordered Namvar to pay $20,930,648 in restitution. In May, a federal jury found Namvar guilty of four wire fraud charges.

  • A second defendant also found guilty of the four wire fraud charges – Hamid Tabatabai, 63 of Agoura Hills, who was Namvar’s right-hand man at the qualified intermediary company – was also sentenced [] and received a 21-month prison sentence.

  • The evidence presented at trial showed that four victims entered into agreements to have approximately $25 million deposited with Namvar’s company, Namco Financial Exchange Corp. (NFE), which held itself out as a qualified intermediary for real estate transactions commonly called “like-kind exchanges,” “tax-free exchanges” or “1031 exchanges.”

  • Under exchange agreements with NFE, the money belonging to the victims was to be held in safekeeping so the money would be available upon demand to effectuate 1031 exchanges.

  • However, instead of holding the money as promised, Namvar, with the assistance of Tabatabai, used the victims’ money for a variety of unauthorized and undisclosed purposes, including paying off creditors and investors of Namvar’s investment company, Namco Capital Group, Inc. (NCG).

For the U.S. Attorney press release, see Prominent L.A. Businessman Sentenced to Seven Years in Federal Prison for Stealing Nearly $21 Million Entrusted to His Company.

No comments: