L.A. real estate mogul indicted Federal grand jury accuses Ezri Namvar of wire fraud related to sheltering proceeds.
By Stuart Pfeifer and Robert Faturechi
Los Angeles real estate mogul Ezri Namvar, an Iranian immigrant who amassed and then lost billions of dollars of commercial real estate holdings, has been indicted on wire fraud charges, his attorney said.
Namvar, former owner of such high-profile properties as the Marriott hotel in downtown Los Angeles and the Cal Neva resort in Lake Tahoe, was accused of five counts of wire fraud related to a company, Namco Financial Exchange Corp., that sheltered proceeds from real estate transactions, said defense attorney Marc Harris.
Thom Mrozek, a spokesman for the U.S. attorney's office, said a grand jury indicted Namvar on Tuesday.
Namvar's exchange company held clients' money obtained from real estate sales until they needed it for new acquisitions. This helped shelter the clients from income tax.
But prosecutors allege that Namvar diverted money from five of the clients without their permission, said a source familiar with the case.
Namvar has not been arrested. Harris said he is working with federal prosecutors to set a date for Namvar to voluntarily appear in court for arraignment.
In addition to his exchange company, Namvar ran Namco Capital Group Inc., which raised hundreds of millions of dollars from private investors and used it to buy commercial real estate. Most of that money came from members of the Iranian Jewish community in Los Angeles.
Harris said that the indictment does not allege any wrongdoing related to the commercial real estate business. "The indictment did not allege any violation in relation to those investors," he said.
Laura Eimiller, a spokeswoman for the FBI in Los Angeles, declined to comment on the indictment. "Our investigation is continuing," she said.
In 2008, angry investors forced Namvar and his companies into involuntary bankruptcy, accusing him of squandering their money and attempting to hide devastating losses. Creditors of Namco Capital Group placed claims in bankruptcy court of nearly $525 million.
A court-appointed bankruptcy trustee issued a report earlier this year that accused the 59-year-old Namvar of treating investor money "as his personal family piggy bank." The report said that company money was used to pay for his brother's wedding and that "many of the remaining valuable assets seemingly belong to family members."
"The story concerning Namco [Capital Group] is one of faulty judgments of monumental proportions mingled with greed and self-interest," the report said.
