LOS ANGELES (CN) - Creditors who lost hundreds of millions of dollars to a real estate developer known as the "Madoff of Beverly Hills" won an $8.1 million judgment against his four children.
A federal jury in 2011 convicted Ezri Namvar of wire fraud. U.S. Judge Percy Anderson sentenced him to 7 years in prison and ordered the Brentwood resident to pay $20,930,648 in restitution.
Prosecutors said Namvar defrauded four investors in his Iranian-Jewish community of almost $21 million in a Ponzi real estate scheme. The investors only saw a combined $4 million return on their investment.
Namvar put their money into his Namco Financial Exchange Corp., and transferred some to the Namco Capital Group.
His scheme began to unravel in 2008, when creditors forced Namvar and Namco Capital into involuntary bankruptcy, claiming the amount owed to investors had topped $600 million.
After starting life in bankruptcy court, the claims ended up in U.S. District Judge Gary Feess' courtroom in the summer of 2011.
In an amended federal complaint, Namco Capital Group's bankruptcy trustee Bradley Sharp alleged that families had placed hundreds of millions of dollars into Namco, only for Namvar to place the money in his "family piggy bank."
In one instance, Namvar used investors' money to pay for his brother's $200,000 wedding, the lawsuit stated.
Seeking to recover their losses and avoid the fraudulent transfers of Namco property, the court filing named Ezri's brothers Mousa, Hooshang, Homayoun and Ramin, as well as Ezri's sons Daniel, Benjamin, and daughters Malka and Shirah, and several related business entities.
In the Nov.4 judgment, Feess ordered Ezri's sons and daughters to pay back the millions of dollars transferred from Namco Financial Exchange Corp. to Namco Capital Group and then to Ezri's children.
"Here the transfers were undocumented, with no collateral, written terms, or even verbal repayment promise and were made at times when each of the defendants owed in excess of $50 million to Namco," Feess wrote.
Namco was insolvent at the time of the transfers and at least one creditor had tried to recover money before the transfers were made, Feess added.
From the spring of 2006 until early 2008, Feess said, Namco Capital had transferred millions of dollars to the U.S. Treasury or Franchise Tax Board on behalf of his children.
Namco was never repaid after the transfers were made, according to court records. Including the value of the transfers and prejudgment interest, Feess ordered Daniel Namvar to pay $1,860,498; Benjamin Namvar to pay $2,563,167; Malka Namvar to pay $1,868,138; and Shirah Namvar $1,871,064.32.
"The total amount of unsecured claims asserted in the Namco case exceeds $1 billion, with in excess of $238 million of claims to be allowed in the Namco case," Feess wrote in his ruling.
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