Brentwood real estate investor Ezri Namvar was found guilty of federal wire fraud charges back in May, but his defense team is waging a battle to overturn the conviction that could drag on for another year.
A big step in the case, which has been called L.A.’s version of the Bernie Madoff scandal, will be a Monday court hearing of two defense motions – one for a new trial and another that seeks to overturn the jury verdict against Namvar and co-defendant Hamid Tabatabai, an officer at several Namvar companies.
“We’ve gone through in excruciating detail the issues we think caused Mr. Namvar to not get a fair trial,” said his attorney, Marc Harris.
If both motions are denied, it still would be far from the final word, even though sentencing for the two men is set for Sept. 26. Federal prosecutors have not publicly indicated how long a sentence they are seeking, but the defense plans to challenge the conviction even if it’s on the low side.
The charges carry up to 80 years in prison, but federal sentences must follow guidelines that take multiple factors in consideration and often are significantly lower than the maximum.
Namvar and Tabatabai were found guilty of stealing $21 million from four clients who had given money to Namvar’s Namco Financial Exchange company to facilitate a 1031 exchange, a transaction in which property sellers defer paying taxes by parking the proceeds with an intermediary until they find another property to buy.
Those clients represent just a small fraction of the hundreds of investors – many of them fellow Jewish refugees from Iran who lived in Beverly Hills and its environs – who lost hundreds of millions of dollars after Namvar’s real estate portfolio collapsed after the 2008 market crash.
However, the defense claims Namvar did not get a fair trial because evidence proving his intent to repay and not defraud his clients was excluded at trial. It’s also alleged by the defense that prosecutors made inaccurate statements in their closing arguments and the defense’s exhibits were inadvertently left out of the jury room during deliberations.
Prosecutors declined to comment, citing the pending case. But they have filed responses in court, saying the evidence the defense was prevented from presenting in trial wasn’t relevant and that the defendants “cannot establish a real concern that they were wrongfully convicted.”
The response to the complaint about the defense’s exhibits has been filed under seal.
James W. Spertus, the attorney who represents Tabatabai, said he expects both defense motions to be denied Monday, but is sure the defense will later triumph in appeals court.
“Based on the government’s misconduct, it’s impossible that these convictions can stand up on appeal,” he said. “Mother Theresa could spend time in jail under a system that operates as the trial in this case operated.”
Job hunting
Namvar, who is free on $300,000 bail but has been placed under house arrest, has already suffered one court loss since May’s conviction. He has been looking for work to support his family and pay off creditors, but last month, Judge Percy Anderson denied Namvar’s request to accept a job offer with an L.A. company called Palisades Capital LLC.
According to the employment offer, Namvar’s job would have been to identify and negotiate real estate investments and loan transactions on a commission basis.
Tabatabai, who is not under house arrest, has been allowed to continue working for a company run by Reid Breitman, who owns Palisades Capital and offered to employ Namvar.
While it’s unclear from court records whether Namvar and Tabatabai would be working at the same Breitman company, prosecutors balked at the idea of the pair working in close circles again – and at the prospect of Namvar again working with real estate transactions.
“In short, defendant Namvar, a convicted fraudster, will once more be in a prime position to defraud others if the Court grants his application,” prosecutors stated in an objection.
Namvar’s attorneys argued that the work “is entirely legitimate, and poses no threat to anyone” because he would not be directly handling clients’ money.
Reached by phone by the Business Journal, Breitman declined to comment.
Namvar was not made available for comment by his attorney.
It wasn’t the first time Namvar was prevented from taking a job. In October, not long after his arraignment, he was asked by the developers of a stalled shopping center project in Orange County to help them find financing. The job would have earned him a commission of approximately $100,000, but a court officer didn’t allow him to take the position.
The jobs are important to Namvar because he is involved in active bankruptcy court cases, both as an individual and as the owner of his primary investment vehicle, Namco Capital Group.
There are nearly 250 creditors with $1.1 billion in claims in Namvar’s individual bankruptcy case. In the related Namco bankruptcy, there are about 540 creditors with $764 million in claims.
Melissa Davis, an attorney at Irvine firm Shulman Hodges & Bastian LLP who represents the creditors’ committee in the personal bankruptcy, said that creditors would be happy if he could find work, given how they are likely only to be compensated for a fraction of their losses.
“The one caveat the creditors have is that it would depend on what the job is. They don’t want him to go out and do the same things he’s done in the past,” she said.
The bankruptcy cases are much further away from a conclusion than the criminal one. Davis said many of the claims in the two bankruptcy cases overlap, and will also likely get winnowed down as the trustees of Namvar’s estate file objections.
The creditors’ committees and the trustees have filed competing reorganization plans, and it doesn’t look like a plan will even be settled on until next year.
“It’s going to be fairly contentious, and take some time to sort out,” Davis said.
