SEC Halts Fraudulent Scheme Targeting Iranian-American Community in Los Angeles
The SEC charged NewPoint Financial Services, its co-owners John and Gissou Rastegar Farahi, and controller Elaheh Amouei with defrauding over 100 Iranian-American investors out of $20 million by falsely marketing unregistered debentures as safe, FDIC-insured, or TARP-backed investments, while diverting funds to finance their Beverly Hills home and losing $18 million in risky trades, leading to an asset freeze and ongoing legal action.
The SEC alleged that NewPoint Financial Services and its principals—John Farahi, Gissou Rastegar Farahi, and Elaheh Amouei—conducted an unregistered securities fraud targeting the Iranian-American community in Los Angeles, raising over $20 million from more than 100 investors. They misled investors by falsely claiming the debentures were low-risk, FDIC-insured CDs, government bonds, or TARP-backed securities, when in fact most funds were siphoned to build the Farahis’ Beverly Hills mansion and lost in speculative options trading, resulting in over $18 million in losses. The SEC secured an emergency asset freeze, appointed a temporary receiver, and seeks civil penalties, disgorgement with interest, and permanent injunctions, as NewPoint lacks funds to repay all investors and the defendants made selective repayments to lull others into staying invested.
The SEC charged NewPoint Financial Services, its co-owners John and Gissou Rastegar Farahi, and controller Elaheh Amouei with orchestrating a fraudulent unregistered securities offering targeting Iranian-American investors in the Los Angeles area. Using a daily Farsi-language radio program hosted by John Farahi, the defendants lured over 100 investors into purchasing more than $20 million in debentures by falsely representing them as low-risk, FDIC-insured certificates of deposit, government bonds, or corporate bonds backed by TARP funds. In reality, the majority of investor funds were diverted to finance the construction of the Farahis’ multi-million-dollar Beverly Hills residence and were lost in risky options futures trading, which resulted in over $18 million in losses during 2008 and early 2009. By June 2009, Farahi and Amouei began making further false assurances to investors that their money was safe and guaranteed to be returned, while selectively repaying some to create the illusion of solvency and discourage others from demanding their money back. The SEC obtained an emergency court order freezing the assets of NewPoint, the Farahis, and Triple 'J', appointing a temporary receiver, preventing document destruction, and requiring detailed accountings. The agency is seeking preliminary and permanent injunctions, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest, as NewPoint lacks sufficient funds to make investors whole. A hearing on the preliminary injunction and receiver appointment was scheduled for January 15, 2010, to prevent further dissipation of remaining assets.
Exhibits & Attached Documents (1)
Extracted insights
- $20.00M $20 million $10M–$100M
- $18.00M $18 million $10M–$100M
- court complaint in u.s. district court for central district of california
- person elaheh amouei
- person gissou rastegar farahi
- person john farahi
- company newpoint financial services, inc.
- agency Securities and Exchange Commission
- person unregistered offering fraud
- SEC charged NewPoint Financial Services, Inc.
- SEC charged John Farahi
- SEC charged Gissou Rastegar Farahi
- SEC charged Elaheh Amouei
- NewPoint Financial Services, Inc. conducted Unregistered Offering Fraud
- John Farahi hosts Daily Finance Radio Program on Farsi Language Radio Station
- NewPoint Financial Services, Inc. misled More Than 100 Investors
- NewPoint Financial Services, Inc. sold More Than $20 Million Worth of Debentures
- The Farahis transferred Investor Funds to Personal Accounts
- The Farahis funded Construction of Multi-Million Dollar Personal Residence in Beverly Hills
- The Farahis lost More Than $18 Million in Options Futures Trading
- John Farahi made Misrepresentations to Investors Since June 2009
- SEC obtained Emergency Court Order to Freeze Assets
- SEC filed Complaint in U.S. District Court for Central District of California
- Hearing on Preliminary Injunction scheduled for January 15, 2010 at 10:00 a.m.
SEC Halts Fraudulent Scheme Targeting Iranian-American Community in Los Angeles FOR IMMEDIATE RELEASE 2010-3 Washington, D.C., Jan. 11, 2010 — The Securities and Exchange Commission today announced that it has charged Beverly Hills, Calif.-based NewPoint Financial Services, Inc. and its co-owners and controller for conducting an unregistered offering fraud aimed at Iranian-Americans in the Los Angeles area. The SEC obtained an emergency court order to freeze their assets and preserve remaining funds that were collected from investors. Additional Materials Litigation Release No. 21369 SEC Complaint The SEC’s complaint, filed in U.S. District Court for the Central District of California, alleges that NewPoint, co-owners John Farahi and Gissou Rastegar Farahi, and its controller Elaheh Amouei targeted investors in the Iranian-American community by touting New Point on a daily finance radio program that John Farahi hosts on a Farsi language radio station in the Los Angeles area. The SEC alleges that the Farahis or Amouei would then make appointments with interested listeners to discuss investment opportunities offered by NewPoint, and misled more than 100 investors into purchasing more than $20 million worth of debentures that they falsely told them were low-risk. Many investors also were falsely told that they were investing in FDIC-insured certificates of deposit, government bonds, or corporate bonds issued by companies backed by funds from the Troubled Asset Relief Program (TARP). The SEC alleges that most of the money raised was instead transferred to accounts controlled by the Farahis to, among other things, fund construction of their multi-million dollar personal residence in Beverly Hills. “They lured victims with false promises of investment safety while secretly enriching themselves and diverting investor funds for their personal use,” said Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office. The SEC’s complaint further alleges that investor funds were used to engage in risky options futures trading in the stock market in which the Farahis lost more than $18 million in 2008 and the beginning of 2009. Since approximately June 2009, John Farahi and Amouei have made further misrepresentations to investors in an effort to lull them into keeping their money with NewPoint, saying that their money is safe and that they are guaranteed to get the entirety of their investment back. According to the SEC’s complaint, NewPoint lacks sufficient funds to make all investors whole, and John Farahi has been paying back some investors on a selective basis while failing to return money to other investors asking for a return of their investment. The SEC has obtained a court order (1) freezing the assets of NewPoint, the Farahis, and Triple “J”; (2) appointing a temporary receiver over NewPoint and Triple “J”; (3) preventing the destruction of documents; (4) requiring accountings from NewPoint, the Farahis, and Triple “J”; and (5) temporarily enjoining NewPoint, the Farahis, and Amouei from future violations of the registration and antifraud violations of the federal securities laws. The SEC also seeks preliminary and permanent injunctions and civil penalties against the defendants and disgorgement with prejudgment interest against NewPoint, the Farahis, and Triple “J.” A hearing on whether a preliminary injunction should be issued against the defendants and whether a permanent receiver should be appointed is scheduled for Jan. 15, 2010, at 10:00 a.m. # # # For more information about this enforcement action, contact: Andrew G. Petillon Associate Regional Director, SEC’s Los Angeles Regional Office (323) 965-3214 Finola H. Manvelian Assistant Regional Director, SEC’s Los Angeles Regional Office (323) 965-3980 John M. McCoy III Regional Trial Counsel, SEC’s Los Angeles Regional Office (323) 965-4561 http://www.sec.gov/news/press/2010/2010-3.htm Home | Previous Page Modified: 01/11/2010
SEC Halts Fraudulent Scheme Targeting Iranian-American Community in Los Angeles FOR IMMEDIATE RELEASE 2010-3 Washington, D.C., Jan. 11, 2010 — The Securities and Exchange Commission today announced that it has charged Beverly Hills, Calif.-based NewPoint Financial Services, Inc. and its co-owners and controller for conducting an unregistered offering fraud aimed at Iranian-Americans in the Los Angeles area. The SEC obtained an emergency court order to freeze their assets and preserve remaining funds that were collected from investors. Additional Materials Litigation Release No. 21369 SEC Complaint The SEC’s complaint, filed in U.S. District Court for the Central District of California, alleges that NewPoint, co-owners John Farahi and Gissou Rastegar Farahi, and its controller Elaheh Amouei targeted investors in the Iranian-American community by touting New Point on a daily finance radio program that John Farahi hosts on a Farsi language radio station in the Los Angeles area. The SEC alleges that the Farahis or Amouei would then make appointments with interested listeners to discuss investment opportunities offered by NewPoint, and misled more than 100 investors into purchasing more than $20 million worth of debentures that they falsely told them were low-risk. Many investors also were falsely told that they were investing in FDIC-insured certificates of deposit, government bonds, or corporate bonds issued by companies backed by funds from the Troubled Asset Relief Program (TARP). The SEC alleges that most of the money raised was instead transferred to accounts controlled by the Farahis to, among other things, fund construction of their multi-million dollar personal residence in Beverly Hills. “They lured victims with false promises of investment safety while secretly enriching themselves and diverting investor funds for their personal use,” said Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office. The SEC’s complaint further alleges that investor funds were used to engage in risky options futures trading in the stock market in which the Farahis lost more than $18 million in 2008 and the beginning of 2009. Since approximately June 2009, John Farahi and Amouei have made further misrepresentations to investors in an effort to lull them into keeping their money with NewPoint, saying that their money is safe and that they are guaranteed to get the entirety of their investment back. According to the SEC’s complaint, NewPoint lacks sufficient funds to make all investors whole, and John Farahi has been paying back some investors on a selective basis while failing to return money to other investors asking for a return of their investment. The SEC has obtained a court order (1) freezing the assets of NewPoint, the Farahis, and Triple “J”; (2) appointing a temporary receiver over NewPoint and Triple “J”; (3) preventing the destruction of documents; (4) requiring accountings from NewPoint, the Farahis, and Triple “J”; and (5) temporarily enjoining NewPoint, the Farahis, and Amouei from future violations of the registration and antifraud violations of the federal securities laws. The SEC also seeks preliminary and permanent injunctions and civil penalties against the defendants and disgorgement with prejudgment interest against NewPoint, the Farahis, and Triple “J.” A hearing on whether a preliminary injunction should be issued against the defendants and whether a permanent receiver should be appointed is scheduled for Jan. 15, 2010, at 10:00 a.m. # # # For more information about this enforcement action, contact: Andrew G. Petillon Associate Regional Director, SEC’s Los Angeles Regional Office (323) 965-3214 Finola H. Manvelian Assistant Regional Director, SEC’s Los Angeles Regional Office (323) 965-3980 John M. McCoy III Regional Trial Counsel, SEC’s Los Angeles Regional Office (323) 965-4561 http://www.sec.gov/news/press/2010/2010-3.htm Home | Previous Page Modified: 01/11/2010