People in L.A.’s Iranian-Jewish community believe there’s a high-rolling crook in their midst. Elizabeth Segal investigates how $500 million disappeared without a trace.
In the close-knit community of L.A.’s Iranian-American Jews, anger simmers beneath the surface.
More than $500 million has disappeared, according to a Department of Justice trusteeship report, yet, Ezri Namvar the real-estate agent, banker, and money-lender at the heart of the dramatic, two-year story of the missing millions, has not been indicted, nor has he been stripped of his real-estate licence, despite allegations that he bilked hundreds of families out of their savings in an elaborate Ponzi-like scheme.
Described by his critics as “the West Coast Bernie Madoff,” Namvar still lives in his luxurious mansion in Brentwood, and travels freely in and out of the country.
“Why is this man not in jail? At this point in his case, Madoff was,” says David Youssefyeh, an attorney who represents 20 families in a contentious bankruptcy case involving Namvar and his investment company, Namco Capital Group Inc.
Despite the scale of the bankruptcy, and the number of people involved, the case has received scant notice beyond the Iranian community in Los Angeles—a generally affluent community that numbers in the tens of thousands. At one point, the Los Angeles Times reported that nearly one out of every five students in the Beverly Hills Unified School District hailed from Iran and, three years ago, Beverly Hills became the first American city to elect an Iranian-born mayor.
Within this community, Namvar has become a notorious—and divisive—figure since late 2008, when the prominent businessman was put into involuntary bankruptcy by the Department of Justice.
While there is no pending criminal case against Namvar, and the Justice Department hasn’t delivered a criminal indictment, Youssefyeh and some creditors say they believe that the DOJ is trying to trace Namvar’s funds through more than 400 limited liability corporations that the businessman established. Justice Department representatives refused to comment on the case, and emails to Namvar went unanswered. Namvar’s lawyer, Timothy Neufeld, also declined to comment.bAvi Hakim, a Namvar friend and supporter, however, insists the businessman isn’t guilty, describing Namvar as a selfless man; someone who will always “drop everything he was doing to help everyone.”
The story of Namvar’s rise is, in the beginning at least, a classic rags-to-riches immigrant story.
Ambitious and hardworking, Namvar arrived in the U.S. in 1969, and, having finished university, quickly began to pursue a career in business. By the late 1990s, he had begun to buy up property and, within a decade, the businessman owned more than 150 residential and office buildings in California, New York, Nevada, and Arizona, according to trusteeship documents. Among his holdings was the downtown Los Angeles Marriott hotel, and—with his three children and three sisters—a majority share of L.A.’s Security Pacific Bank, according to reports in the Los Angeles Business Journal.
After the Iranian revolution in 1979, many Iranian Jews had made their way to the West Coast, and while many of the wealthier expats had made their mark on L.A., buying up property in the tony enclaves of Beverly Hills and Brentwood, others, less prosperous, had settled in the San Fernando Valley. Some of the newcomers, especially among the elderly, found it hard to adapt in their new land and Namvar represented familiarity in an unfamiliar world. “They looked to him to help them,” says Abraham Assil, a real-estate investor who settled in Beverly Hills in 1980.
Arash Hakamian wasn’t rich. But Hakamian’s parents, who had also fled Iran, advised him to invest his savings with Namvar, whom they had known for years. Hakamian, a dentistry student at the University of Southern California, had worked hard to save up for his education—making juice at Robeks, and delivering fur coats to well-off Iranian-Americans, eventually scraping together $45,000. His parents told him Namvar offered 6.5 per cent return over the bank’s 3.5 per cent, and so, in 2007, the young student entrusted his money with the businessman, receiving a promissory note in return.
By this time, Namvar had become a prominent figure in the Iranian-Jewish community, not just through his money lending, but through his ties to Jewish causes, and the state of Israel. Youssefyeh says that Namvar and his family contributed $5 million toward a military housing centre south of Tel Aviv, and also owned valuable land near the old city in Jerusalem, as well as a stake in the Nam Tower—a multimillion-dollar luxury apartment building in Tel Aviv.
Namvar also sat on the board of the orthodox Nessah Temple in Beverly Hills “He pretended to be religious,” says Assil. “He would do things like wear a kippah,” the Jewish skullcap, “touch the mezuzah,” the parchment with Torah verses, “or say a brachot,” a blessing, “every time he drank water.” Membership in the temple leant Namvar further respect in the community, and became an affiliation that critics say he used when raising money.
But the business had begun to unravel and Namvar tried to cover his mounting losses, using creditors’ funds as “his personal piggy bank,” according to trusteeship documents. Still, the FDIC closed his bank in November 20008.
That fall, when Hakamian tried to claim his investment to finish paying for dental school, he was given nothing but promises. After a series of futile calls, he decided to visit Namvar’s offices where he found “a waiting room full of people,” he says. “Some were crying—all were very upset—and you could hear doors slamming. And then either Ezri or Mousa, one of his brothers, would walk out, screaming.” After six visits to Namvar’s offices, Hakamian says he was finally handed $1,000 in cash, along with a stern warning not to tell anyone what had happened.
But other creditors, such as Assil, had already sounded the alarm, and in December 2008, the DOJ forced Namvar and his Namco Company into an involuntary bankruptcy in the U.S. Bankruptcy Court for the Central District of California
At first, Namvar seemed to cooperate, meeting creditors in public meetings, promising he would make good on what had been lost. Some creditors went along, embarrassed by their losses; others, especially the less wealthy in the community, felt it was important to stay silent in order to stay in Namvar’s good and powerful graces.
Today, the creditors include an 88-year-old German Holocaust survivor who gave Namvar $2 million to invest as well as a middle-aged woman, who had to move into her parents’ garage, and a widowed man in his fifties, who lost everything he had. (The bank is now foreclosing on the condo he shares with his 13-year-old daughter.)
And within the community, patience with Namvar—and the Justice Department—is wearing thin, many say. Bankruptcy cases as complex as this one can take years to unravel but some creditors fear that justice may never arrive
Since the bankruptcy, only $13 million has been disbursed to creditors. And, complicating matters, the DOJ recently requested that any funds already returned from Namvar should be handed back, so that the trusteeship might disburse them pro rata, proportionally to each creditor, as is standard practice in bankruptcy cases—a request that has been met with disbelief among some of the creditors who no longer have the money, and fear that they’ll now get sued in a case where, they believe, they are in fact the victims.
Creditors are also disturbed by trusteeship documents that show that just before the bankruptcy filing, Namvar transferred his ownership of his Nam5 LLC to his brother in Israel. Other documents show Namvar gifted four members of his immediate family with $50 million some time before the bankruptcy.
In a community that prides itself on discretion and the handling of its own affairs, confrontations between Namvar and his creditors have lately become very public. Earlier this month, someone sent an anonymous email to Namvar, containing a blurry mobile phone snap of one of Namvar’s family members, with a text that read: “YOU ARE NOT UNTOUCHABLE.” And just two weeks ago, police had to be called to intervene during an altercation between Namvar and an irate creditor at a community meeting.
According to Hakamian, Namvar also threatened his life, during an earlier bankruptcy hearing, telling the young creditor that he would make sure he never saw his money again—a threat Namvar later denied on the stand. Youssefyeh claims that he, too, was threatened – but in Farsi, by people working for Namvar. “I don’t speak Farsi, but it didn’t sound good!” the lawyer jokes.
Although Namvar resigned under pressure from the board of Nessah temple, a group known as the Namvar Creditors Group this year contacted Nessah’s rabbi, David Shofet (and a another prominent elder), suggesting in a letter that, according to the code of Jewish law, the rabbis had “an obligation and duty to directly be involved in resolving this dispute.”
After several months’ deliberation, Rabbi Shofet stated this month that the Namvars should repay what they owed in full, according to a letter from the group that went on to describe the creditors’ mounting frustration: “The Namvars refuse to voluntarily return the assets they have fraudulently hidden. The members of our community are SUFFERING and we all have a duty to participate in bringing their pain to the attention of the authorities and [demand that] the U.S. Attorneys’ office expeditiously prosecute these criminals to the full extent of the law.”
Assil is one of the many who says that justice has been slow-coming. “We are hardworking, tax-paying citizens—loyal to the U.S. and the state of Israel,” he says. “In the community, we walked around very proud. When you walked into a bank, and the bankers knew that you were Persian, they would look at you and consider you trustworthy; your background provided for that.” He paused to reflect. “Now most of us who do business outside of the community are ashamed because of what this man has done. It is a shame that he is not in jail; it’s a shame the Justice Department is not pursuing him. The community is hurt.”
Hakamian, for his part, is also growing increasingly frustrated. As the case drags on, he has yet to see the rest of the $45,000 he gave to Namvar. “If he’s so sincere, then why doesn’t he sell his mansion in Brentwood?,” Hakamian says. “Why doesn’t he change his life, like the rest of us have had to? He and his family are like the Mafia—the new American Mafia. They’ll stop at nothing to do what they want to do; to get what they want.”
Elizabeth Segal is a freelance journalist living in Los Angeles. This post originally appeared at the Daily Beast and is republished here with permission.