L.A. Radio Host Charged With $20 Million Ponzi Scheme

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L.A. Radio Host Charged With $20 Million Ponzi Scheme An Iranian-American businessman who hosted a popular Persian language radio show called Economy Today has been indicted on charges that he robbed investors of $20 million in a Ponzi scheme than ran for six years.

Los Angeles-based John Farahi, 54-who lives in the opulent Bel Air Estates neighborhood-offered listeners investment advice and promoted his company, New Point Financial Services, which he claimed made conservative investments in low-risk assets like certificates of deposit, TARP-backed corporate bonds, and deeds of trust. Instead, Farahi used the money he solicited to support his family's luxurious lifestyle, make payments to earlier investors, and engage in high-risk options trading. Farahi lost at least $15 million through his actual investments, the indictment alleges -- something he failed to disclose to clients.

Farahi's talk show was broadcast daily on L.A.'s KIRN-AM (670) for eight years, ending in January 2010, when the Securities and Exchange Commission filed a lawsuit accusing him, his wife and an employee of defrauding investors. During the show, Farahi explained the news coming out of the financial markets and took questions from callers.

"It's troubling," the station's general manager told the Los Angeles Times when the lawsuit was announced. "We immediately discontinued the program. We had no choice -- until there's a resolution."

Also indicted was New Point's corporate counsel, Santa Monica attorney David Tamman, who stands accused of conspiring with Farahi to obstruct the SEC investigation. According to the indictment, Farahi and Tamman altered documents to make it look as though New Point's investors had been fully informed about the firm's investments. Tamman faces a maximum of 190 years behind bars if convicted on all counts; Farahi's maximum sentence could be 717 years.

Farahi is said to have targeted members of L.A.'s close-knit Iranian-American Jewish community, who made up most of his more than 100 investors. At the time of the original SEC complaint, Karmel Melamed, a freelance journalist who writes about Iranian-American affairs, told The New York Times, "Sadly, I think this scandal will wake all Iranian Americans up to the reality that they can no longer trust those from amongst their community with just a handshake, as was the case in Iran when it came to doing business. They will now more than likely become more savvy by doing their research and investigating financial advisers who will be handling their money."

He added that "a few rotten apples" had turned to illegal means to make back the money they forfeited by leaving Iran for the United States in the wake of the 1979 Islamic Revolution.

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36 Comments

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vampyreincubus

coincidence or not? ive heard more about cracking down on corrupt businesses in the last 3 years than in my lifetime. does this mean republicans just let businesses take advantage of people day after day , not caring enough about us to look into it and protect us. have to say at the very least Obama has done that , like he said he was going to. went after wall street and its corrupt business practices.

December 12 2011 at 7:44 PM Report abuse rate up rate down Reply
1 reply to vampyreincubus's comment
thomgrisso

You are confused .. No it does not mean that you get to trash and blame republicans nor falslly give cudos to OBAMA you are just paying more attention .. Madoff was a Democrat and so were his partners in crime ....
There is much to do to clean house ... There are huge money deals that were put into action in the Clinton years that are responsible for much of the bank losses ...It is not that easy to say oh my things are better ... NO they are not and he never went after wall street except with his hand out for more campain money

June 25 2012 at 3:16 PM Report abuse +1 rate up rate down Reply
charpist5

Hope that temporary lavish life style was worth it to those involved. Because life will....kind of...change...in prison.

December 12 2011 at 6:01 PM Report abuse rate up rate down Reply
mulepick

Why don't people just look at what the DOW has done over the past 8 years? No one is making money anywhere.

December 12 2011 at 5:52 PM Report abuse rate up rate down Reply
cold

What a piker! In Florida we don't start counting until the number starts with "B" as in
"B"illions.

December 12 2011 at 4:50 PM Report abuse rate up rate down Reply
Tracie

IS STUPID!!!!

December 12 2011 at 4:41 PM Report abuse rate up rate down Reply
Tracie

WHY would ANYONE invest money with an Iranian?!!! THAT

December 12 2011 at 4:41 PM Report abuse +1 rate up rate down Reply
2 replies to Tracie's comment
larger fontss

What a racist comment Tracie.

December 13 2011 at 12:56 AM Report abuse -1 rate up rate down Reply
Roy

Couldn't agree with you more Tracie. He wasall about his country.

June 25 2012 at 1:29 PM Report abuse +1 rate up rate down Reply
clembarry

This world-wide economics recession has exposed a lot of fakes. Wake up people! before you hand over your money to an "Investor", look at the documentary, "American greed". Nobody will get you rich overnight.

December 12 2011 at 4:24 PM Report abuse +1 rate up rate down Reply
alpambuena

the government does the same thing, but instead of a ponzi scheme, they call it a stimulus.

December 12 2011 at 3:47 PM Report abuse +5 rate up rate down Reply
1 reply to alpambuena's comment
bildaws

Or taxes.

December 12 2011 at 4:14 PM Report abuse +3 rate up rate down Reply
luddite00

Well, there's one 1%er being held to account. How many more are on the chopping block. A little justice is nice.

December 12 2011 at 3:31 PM Report abuse -1 rate up rate down Reply
Alan Wallace

Anyone who gives their money to an "investor" is an idiot who deserves to lose every dime. You work for your money, then hand it over to some Wall Street snake oil salesman and you're shocked and appalled when he loses your money.
These people don't exist to make you rich. They exist to get rich off you. Do your own investing, or better yet, just put your money in the mattress. With the dog laying on it. At least then, when you go to get it, it will still be there.
Trusting professional investors not to bankrupt you is like trusting your rapist not to kill you.

December 12 2011 at 3:20 PM Report abuse +1 rate up rate down Reply