Ponzi Targeted Persian Jews, SEC Claims
Ponzi Targeted Persian Jews, SEC Claims
By DEE MOORE
By DEE MOORE
(CN) - The Securities and Exchange Commission obtained an emergency court order against a man whose ponzi scheme targeted the Persian-Jewish communities in Los Angeles, Florida and Texas.
The commission claims that Shervin Neman and Neman Financial raised more than $7 million "offering purported investment opportunities, through Neman Fund, in 1.) foreclosed residential properties; 2.) Facebook shares in private transactions; and 3.) various highly-anticipated initial public offerings." These claims included initial public offerings for General Motors, Groupon, LinkedIn and Angie's List, according to the complaint.
"Neman deceived members of his own community to raise money in this fraudulent Ponzi scheme," said Michele Wein Layne, Associate Regional Director of the SEC's Los Angeles Office. "By exploiting investors' trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle."
SEC investigations found that Neman had told investors that he bought foreclosed residential properties and flipped them to committed buyers at a profit. He also told investors that they would see a 10-18% return on their investments within 30 to 180 days.
"In reality, Neman is operating a Ponzi scheme, and has used more than 99% of the funds raised from investors to either make Ponzi payments to investors or to pay his personal and business expenses," the complaint states.
Neman allegedly used more than $5.4 million to pay principal and purported profits to existing investors using funds from new investors or new investments from other existing investors. Except for a single $66,000 investment in General Motors' IPO in November 2010, Neman has not used investor funds in the manner he said he would.
"While Neman used the bulk of investor funds to perpetrate a Ponzi scheme, he used another nearly $1.6 million to support a lavish lifestyle for himself and his wife, and to pay business and other expenses.," the complaint states.
Investor funds were used to pay for his wedding, honeymoon, his wife's $60,000 engagement ring, luxury cars, VIP tickets to entertainment venues, jewelry, hotels and restaurants. He also used funds to lease and redecorate a new office in an upscale building in Century City, hire two administrative assistants and pay legal and other professional expenses.
Neman Financial LP is a California limited partnership formed by Neman in June 2010 and located at the same address as Neman Adviser. Neither Neman Fund nor its securities offering are registered with the commission in any capacity, the commission claims.
The complaint was filed in the U. S. District Court of the California Central District by Molly White and J. Cindy Eson.
Copyright Courthouse News Service 2012
No comments:
Post a Comment