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Tag: Shervin Neman

  • FBI: Affinity Fraudster Sued By SEC Launched Follow-Up Scam; Shervin Neman Allegedly Paid Law Firm, Earlier Victims With Money From New Mark — And Then Wrote A Bad Check For $2.35 Million

    ponzinews1Shervin Neman, the alleged affinity fraudster sued by the SEC last year in a Ponzi scheme targeted at the Persian-Jewish community, now has been arrested by the FBI in Los Angeles.

    Neman, 31, also is known as Shervin Davatgarzadeh, the FBI said. The Century City resident was arrested today on a three-count indictment charging him mail fraud and wire fraud, amid allegations he hatched a new fraud scheme after the SEC brought its civil charges in April 2012.

    The SEC described Neman last year as the operator of a “purported hedge fund” that married a real-estate flipping scheme involving purported foreclosures to purported opportunities to profit from IPOs conducted by Facebook, Groupon, LinkedIn and Angie’s List.

    “The month after the SEC filed its lawsuit, Neman solicited $2 million from another victim with false promises that Neman could obtain pre-IPO shares in Facebook, according to the indictment,” the FBI said. “Neman allegedly used the funds obtained from the new victim to pay, among other things, most of his earlier victims and the law firm representing him in the SEC action. Neman then had victims who had been ‘paid back’ write e-mails saying that Neman did not owe them money, according to the indictment, which goes on to say that Neman used these e-mails as part of his defense in the SEC case. In June 2012, Neman sent to the later victim a $2,235,800 check that purported to be the return on the Facebook investment, but that check bounced, according to the indictment.”

     

  • URGENT >> BULLETIN >> MOVING: SEC Charges Shervin Neman In Alleged Ponzi Scheme Targeted At Los Angeles Persian-Jewish Community; Federal Judge Issues Emergency Asset Freeze

    URGENT >> BULLETIN >> MOVING: The SEC has gone to federal court in Los Angeles, alleging that a California man was operating a $7.5 million Ponzi scheme targeted at the Persian-Jewish community.

    U.S. District Judge Jacqueline H. Nguyen has issued an emergency asset freeze.

    Charged in the alleged affinity-fraud caper was Shervin Neman, 30, of the Century City area of Los Angeles. Neman, according to the SEC, formerly was known as Shervin Davatgarzadeh. He presided over an entity known as Neman Financial LP, which the agency described as a “purported hedge fund.”

    It was the second major affinity-fraud case announced by the SEC in the past 24 hours. The agency said yesterday that Ephren W. Taylor II, 29, of New York, was operating an $11 million Ponzi scheme targeted at African American church congregations. Taylor was charged in Atlanta.

    The Scheme Aimed At The Persian-Jewish Community

    “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.”

    The Neman Ponzi married a real-estate flipping scheme involving purported foreclosures to purported opportunities to profit from IPOs conducted by Facebook , Groupon, LinkedIn and Angie’s List, the SEC said.

    “Although Neman promised investors exorbitant returns resulting from his investing acumen and access to pre-IPO shares of well-known companies, what they actually received was simply other investors’ money in hallmark Ponzi scheme fashion,” the agency said.

    Named a relief defendant in the case was Neman’s wife, Cassandra C. Neman, 33. She is not charged with wrongdoing, but the SEC said she received gifts from her husband, including a $60,000 ring, that were paid for from Ponzi proceeds.

    Neman’s investors also were paying for his wife’s personal expenses, the SEC said. The Nemans  wed in October 2010. The fraud scheme may date back to June  2010. It allegedly raised at least $7.54 million from investors in California, Florida and Texas, the agency said.

    More than 99 percent of investors’ funds were directed either to Ponzi payments or to prop up Neman’s tony lifestyle, the SEC said.

    “Specifically,” the agency said, “of the $7.54 million raised from investors since June 2010, Neman has used more than $5.4 million to make Ponzi payments to existing investors, and has spent another nearly$1.6 million to support a lavish lifestyle and maintain the appearance of an upscale
    business operation. Due to recent investments from new and existing investors,Neman owes nearly $2.7 million in principal payments alone to his investors.”

    Neman filled his personal bank account with investors’ money, the SEC said.

    “In most instances, Neman directed investors to wire their funds to a personal bank account held in Neman’s name or to write checks to him personally, which he then deposited into his personal account,” the SEC charged. “Neman commingled investor funds in his personal account.”

    As was the case yesterday in the SEC’s allegations against Taylor in the alleged affinty-fraud scheme targeted at Christians, the agency said today that Neman’s fraud involved promissory notes.

    Neman was operating a straightforward scam, the SEC said.

    “Among other things, Neman used investor funds to pay for his wedding and honeymoon, his wife’s engagement ring, luxury cars, VIP tickets to entertainment venues, jewelry, hotels, and restaurants,” the SEC charged. “Neman also used investor funds to lease and redecorate a new office in an upscale building in the Century City area of Los Angeles, hire two administrative assistants, and pay legal and other professional expenses . . .”

    Read the Neman complaint.