Ezri Namvar, a Los Angeles businessman whose hotel and investment companies filed for bankruptcy protection, was indicted on charges of stealing about $23 million from clients who allowed his firm to hold their money before it was reinvested in real estate, the U.S. said.
The federal grand jury indictment alleges that five people agreed to have their money deposited with Namvar's Namco Financial Exchange Corp., which held itself out to be a “qualified intermediary” for real estate transactions called 1031 exchanges, the Los Angeles U.S. Attorney's Office said today in an e-mailed statement.
Namvar, 59, and another defendant used the money to pay off creditors and investors in Namvar's investment company, Namco
Capital Group Inc., according to the statement. He was charged with five counts of wire fraud. Each count carries a maximum sentence of 20 years in federal prison.
Marc Harris, Namvar's attorney, didn't immediately return a phone message left at his office.
Through his attorney, Namvar agreed to surrender on the morning of Sept. 27, prosecutors said.
Namvar owned LA Hotel Venture LLC, owner of the downtown Los Angeles Marriott Hotel. The company filed for bankruptcy in April 2009. Namvar and Namco Capital were forced into bankruptcy after investors filed involuntary petitions against them in December 2008.
Namvar is also being sued for hundreds of millions of dollars owed investors in Los Angeles' Persian Jewish community and banks that guaranteed loans to him, said A. David Youssefyeh, a lawyer representing 20 clients with claims against Namvar. Investors gave Namvar amounts ranging from $10,000 to millions on promises that they would receive above-market returns, said Youssefyeh in a telephone interview today.
