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Los Angeles - SEC Shuts Down Ponzi Scheme Targeting Persian-Jewish Community

Published on: April 14, 2012 10:31 PM
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Los Angeles - The Securities and Exchange Commission today obtained an emergency court order to halt an ongoing Ponzi scheme that targeted members of the Persian-Jewish community in Los Angeles.

The SEC alleges  that for the past two years, Shervin Neman raised more than $7.5 million from investors by claiming to be a hedge fund manager. Neman told investors that his purported hedge fund ” Neman Financial L.P. ” invested in foreclosed residential properties that would be quickly flipped for profit as well as in Facebook shares obtained in private transactions and other highly anticipated initial public offerings including Groupon, LinkedIn, and Angie’s List. 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.

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“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 Honorable Jacqueline H. Nguyen for the U.S. District Court for the Central District of California granted the SEC’s request for a temporary restraining order and asset freeze against Neman and the entities he controlled.

According to the SEC’s complaint, Neman raised funds from at least 11 investors in the fraudulent securities offering. Most of the investors are members of the Los Angeles Persian-Jewish community along with Neman, who lives in the Century City area of Los Angeles. More than 99 percent of the money Neman raised was used either to pay existing investors or fund his lavish lifestyle. Neman spent nearly $1.6 million of investor funds to buy jewelry and high-end cars as well as to finance his wedding and honeymoon, other vacations, and VIP tickets to sporting events.

The SEC’s investigation was conducted by Cindy Eson of the Los Angeles Regional Office. Molly White will lead the litigation. Joshua Bauder, Harden Sooper, and Yanna Stoyanoff conducted the SEC examination that prompted the investigation.

Judge Nguyen has scheduled a court hearing for April 23 at 2 p.m. on the SEC’s motion for a preliminary injunction.


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Read Comments (17)  —  Post Yours »

1

 Apr 14, 2012 at 10:54 PM ShmutzVesh Says:

What a jerk. Hang him to dry.let him be an example for anyone else who wants to steal from their fellow people.

2

 Apr 14, 2012 at 11:09 PM bigwheeel Says:

Thanks to the SEC and other government agencies for doing the job they were meant to do. But this, latest Goniff is unimpressive as an investment fund organizer. In Two years, he only raised 7 Million Dollars. As P.T. Barnum (Of Barnum and Bailey circus fame.) said. "A sucker is Born every Minute". After all the bad experience that people had with those "Get rich Quick" schemes they still don't learn. The fact that this thief still found people who invested money with him shows that some people are driven by greed and naivete.

3

 Apr 14, 2012 at 11:42 PM Moshe Says:

Isn't this mesira?

4

 Apr 14, 2012 at 11:49 PM BeKind Says:

Reply to #2  
bigwheeel Says:

Thanks to the SEC and other government agencies for doing the job they were meant to do. But this, latest Goniff is unimpressive as an investment fund organizer. In Two years, he only raised 7 Million Dollars. As P.T. Barnum (Of Barnum and Bailey circus fame.) said. "A sucker is Born every Minute". After all the bad experience that people had with those "Get rich Quick" schemes they still don't learn. The fact that this thief still found people who invested money with him shows that some people are driven by greed and naivete.

You don't know what you're talking about. Persian Jews have had to trust each other for hundreds of years in order to survive. There has never been a need for contracts or other paperwork. Only lately have we heard of such breaches to this age-old honor code.

5

 Apr 15, 2012 at 07:06 AM Avreich1 Says:

Reply to #3  
Moshe Says:

Isn't this mesira?

I have never understood how Jewish people, who have been ripped off and robbed of their hard-earned money by a fellow Jew, can be stigmatized when they attempt to obtain redress.

Perhaps someone who is more learned in these matters will explain the logic of protecting such criminals from דינא דמלכותא, thus enabling them to rob yet more Jews?

6

 Apr 15, 2012 at 09:01 AM shredready Says:

Reply to #3  
Moshe Says:

Isn't this mesira?

I guess you rather keep this secret so the guy can rip off more people


mesira, the weapon of choice for Jewsh crimnals

7

 Apr 15, 2012 at 09:55 AM PaulinSaudi Says:

P.J.O'Rourke, the American philosopher, pointed out that in the post-war era two were born every minute.

8

 Apr 15, 2012 at 10:02 AM ben dover Says:

Not only that #6, he was a big ba'll tzedaka, and such an honerable man.
Since he is Persian we must also not wait for all the facts to come out ,and instead convict him here on VIN. After all said and done - he did not wear the same black suit and white shirt that I wear.

9

 Apr 15, 2012 at 10:56 AM MidwesternGuy Says:

Reply to #8  
ben dover Says:

Not only that #6, he was a big ba'll tzedaka, and such an honerable man.
Since he is Persian we must also not wait for all the facts to come out ,and instead convict him here on VIN. After all said and done - he did not wear the same black suit and white shirt that I wear.

I'm not judging him, but people have had enough with the "ba'al tzedaka" line. Everyone knows that if it's with stolen money it's a total Mitzvah Ha'bah B'Aveirah.

If the charges are true, then it's Nemen who, in the words of your screen name, had the Persian community Ben Dover, if you know what I mean.

10

 Apr 15, 2012 at 10:56 AM shredready Says:

Reply to #8  
ben dover Says:

Not only that #6, he was a big ba'll tzedaka, and such an honerable man.
Since he is Persian we must also not wait for all the facts to come out ,and instead convict him here on VIN. After all said and done - he did not wear the same black suit and white shirt that I wear.

my comment is simply if it is true, I did not convict him. In addition if there is enough suspicion to bring an indictment it should be publicized so if he approaches other people they can precede with caution

I never said he was guilty

and yes misra is the weapon of choice for criminals and their protectors

11

 Apr 15, 2012 at 12:27 PM bigwheeel Says:

Reply to #4  
BeKind Says:

You don't know what you're talking about. Persian Jews have had to trust each other for hundreds of years in order to survive. There has never been a need for contracts or other paperwork. Only lately have we heard of such breaches to this age-old honor code.

You, on the other hand who DOES know what they're talking about would agree that the best "Prospective" or contract would have been worthless in a Ponzi scheme. This has nothing to do with "Trusting each other for survival".

12

 Apr 15, 2012 at 12:32 PM bigwheeel Says:

Reply to #8  
ben dover Says:

Not only that #6, he was a big ba'll tzedaka, and such an honerable man.
Since he is Persian we must also not wait for all the facts to come out ,and instead convict him here on VIN. After all said and done - he did not wear the same black suit and white shirt that I wear.

All the necessary facts came out already. Fact #1; People trusted him and invested in his fund; Fact #2; He ran a Ponzi Scheme; Fact #3; The SEC shut him down. (B"H).

13

 Apr 15, 2012 at 12:35 PM bigwheeel Says:

Reply to #10  
shredready Says:

my comment is simply if it is true, I did not convict him. In addition if there is enough suspicion to bring an indictment it should be publicized so if he approaches other people they can precede with caution

I never said he was guilty

and yes misra is the weapon of choice for criminals and their protectors

The word is "Proceed" with caution. Rather than "Precede".

14

 Apr 15, 2012 at 01:19 PM ben dover Says:

Mid-Western Guy,
You got it right !
I could not resist the handle.

15

 Apr 15, 2012 at 03:27 PM BeKind Says:

Reply to #11  
bigwheeel Says:

You, on the other hand who DOES know what they're talking about would agree that the best "Prospective" or contract would have been worthless in a Ponzi scheme. This has nothing to do with "Trusting each other for survival".

Again, you're showing your lack of knowledge. You give investors a prospectus not a prospective. And, you have to file the prospectus with the SEC, for their review. Nevertheless, scammers will exploit religious/cultural affinity for their illicit aims.

16

 Apr 15, 2012 at 06:08 PM bigwheeel Says:

Reply to #15  
BeKind Says:

Again, you're showing your lack of knowledge. You give investors a prospectus not a prospective. And, you have to file the prospectus with the SEC, for their review. Nevertheless, scammers will exploit religious/cultural affinity for their illicit aims.

Thank you for your kindness (Be kind, my foot.) So I mistakenly used the wrong term for prospectus. But the message is the same. Asenda me Tu est un sfacime. (Uttered by the great Bob Grant.) @#$%^&* The words that replace these symbols, I'll leave for you to figure out.

17

 Apr 16, 2012 at 10:23 AM Anonymous Says:

He is a family man and should not go to jail for long.

18

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