Federal authorities are conducting a criminal investigation of Ezri Namvar, the bankrupt Brentwood businessman who has been accused of running a Ponzi scheme, the Business Journal has learned.
Sources who were either interviewed by the FBI or were present for questioning of others this year and last fall said that discussions largely focused on Namvar's bankrupt Namco Financial Exchange Corp., which is named in several lawsuits accusing the businessman of running a Ponzi scheme and stealing money to prop up his failing ventures.
A prosecutor in the United States Attorney's Office in Los Angeles, which typically works in conjunction with the FBI, confirmed his involvement in the investigation.
"I am the attorney who is handling the investigation," said Jeremy Matz, an assistant U.S. attorney in the major frauds section. He declined further comment.
Such investigations, of course, can be dropped entirely or they can lead to settlements. But they also can result in indictments.
Namvar, 57, had a local real estate empire valued at $2.43 billion last summer, but it collapsed during the real estate bust late last year.
His situation is remarkable partly because of the size of the losses, but also because of the unusual way he raised money. Namvar solicited personal investments from immigrants, many of whom are Jewish and fled Iran because of the country's 1979 Islamic revolution.
Bankrupt Namco Capital Group Inc., his main investment company, owes more than a half-billion dollars to 464 creditors, mostly Persian Jews like Namvar who live in and around Beverly Hills. It is believed he personally owes a large amount as well.
Namvar in December was forced into Chapter 11 involuntary bankruptcy along with Namco Capital amid concerns that he was disposing of assets to pay back some creditors preferentially.
It is not known whether a grand jury has been convened in the matter and sources interviewed by the FBI said they had not been subpoenaed to testify or supply evidence. But, Laurie Levenson, a former assistant U.S. attorney, said that because the case is in the hands of an assistant U.S. attorney, it has passed a screening process and is seen as a case that could result in criminal charges.
"They are pretty serious," said Levenson, a professor at Loyola Law School in downtown Los Angeles, who learned of the investigation from the Business Journal. "I don't know if even they have decided if they will seek an indictment, who they will indict or the scope of the charges. There are plenty of cases that make it to this point and are resolved with a deal, but you don't want to be on the short list."
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