The Madoff of Beverly Hills

According to US reports, Jews in Los Angeles fell victim to Ponzi-like scheme by one of community's members Ezri Namvar. Some $500 million go missing as banker, real estate agent allegedly used clients' investments to fund his collapsing businesses schemes

Reuters | Published: 09.01.10, 14:03

LOS ANGELES - Has another Bernard Madoff been lurking in Beverly Hills? This is the question nagging the Iranian-Jewish community. The Daily Beast website on Tuesday published a profile of Jewish businessman Ezri Namvar, who is suspected of a Ponzi-like scheme in which he bilked his clients out of $500 million.

Most of his alleged victims are members of the Iranian-Jewish community in Los Angeles and are suing Namvar and his company, Namco Capital Group, for fraud.

Namvar, a well-known businessman in the Iranian-Jewish community, is currently under extensive investigation, which has stretched on for two years. According to a US Department of Justice trusteeship report, more than $500 million have disappeared in connection with Namvar's dealings as a real estate agent, banker, and money-lender.

However, Namvar has yet to be arrested or formally indicted and continues to live in his luxurious villa in Brentwood.

"Why is this man not in jail? At this point in his case, Madoff was,” says David Youssefyeh, an attorney who represents 20 Iranian-Jewish families in a bankruptcy case against Namvar.

Mounting pressure

Namvar was the director of Namco Capital Group, which was put into involuntary bankruptcy by the Department of Justice two years ago. Some of the families are claiming that they lost all of their savings as a result of Namco's bankruptcy, granting Namvar the dubious title of "the West Coast Bernie Madoff."

Namvar came to Los Angeles from Iran in 1969 and became a well-known and esteemed businessman over the years. He keeps Jewish tradition and prays at one of the community's main Orthodox synagogues. Over time, he bought stake in over 150 properties throughout California. According to the Daily Beast report, he also owns stake in luxury property in Tel Aviv and next to the Old City in Jerusalem.

Namvar would promise his clients a 6.5% return over the 3.5% being offered by the banks.

According to the Justice Department report, when Namvar encountered financial difficulties, he used a "private savings account" to bail out his businesses. Once his company went bankrupt, $500 million of his clients' money went missing.

Documents from the Justice Department show that shortly before going bankrupt, Namvar distributed gifts worth $50 million each to his family members. Until now, only $13 million have been returned to his investors.

Among the victims of his alleged scheme is a Holocaust survivor who gave Namvar more than $2 million of his savings.

In recent weeks, pressure has mounted against Namvar within the community, forcing him to resign from his synagogue's board and even receiving threats.