John Farahi of NewPoint Financial Pleads Guilty to $20+ Million Ponzi Scheme

Attorney Advising Disclaimer

John Farahi of Beverly Hills, Califonia pled guilty to multiple felony counts including mail fraud, loan fraud, selling unregistered securities and conspiracy to obstruct justice in connection with an alleged Ponzi scheme he ran through his company, NewPoint Financial Services, Inc.

According to an SEC Complaint, Farahi and business partners Gissou Rastegar Farahi and Elaheh Amouei perpetrated their fraudulent scheme between 2003 and 2009, initially targeting the Los Angeles area Iranian-American community through a program on a local Farsi language radio station.

Serving as a hedge fund manager, Farahi offered and sold over $20 million worth of debentures to hundreds of investors with these funds transferred to Farahi's personal bank account.

Instead of investing in the fiscally responsible debentures and bonds, the SEC found that Farahi instead used several millions of dollars to construct an expensive personal residence in Beverly Hills, electing instead to invest in risky futures trading in the stock market, losing in excess of $18 million in 2008 and 2009 alone.

The SEC found that Farahi and Amouei deliberately misled investors, falsely guaranteeing full and whole returns, omitting and failing to provide investors with disclosure documents and private placement memoranda explaining the investment and risks and concealing the true nature of NewPoint's actions.

Facing a maximum of 717 years in prison if convicted in court, Farahi pled guilty in exchange for a recommended prison sentence not to exceed 10 years.

If you suspect a broker or firm has engaged in fraudulent conduct—such as a Ponzi scheme—that has proven harmful to your investments or interests, call The Law Offices of Jonathan W. Evans & Associates at 818-760-9880 for an investigation and consultation.

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