SEC claims LA radio show host took part in $20 million fraud targeting Iranian-Americans

SEC says LA radio host took part in $20M scam

LOS ANGELES — The Securities and Exchange Commission said Monday it has filed civil charges against the host of a Persian-language business radio show who is accused of targeting his Iranian-Americans listeners in a $20 million investment fraud.

The SEC sued NewPoint Financial Services Inc.; its president and co-owner John Farahi, who hosts the show on Los Angeles radio station KIRN; his wife and company co-owner Gissou Rastegar Farahi; and NewPoint Controller Elaheh Amouei.

The lawsuit, filed Friday, alleges fraud and the unregistered sale of securities. It seeks to have the defendants give up any “ill-gotten gains” and pay unspecified civil penalties.

The SEC obtained an emergency federal court order freezing company assets, but authorities contend most of the money was lost to risky investments in 2008 and early 2009.

John Farahi’s attorney, Gary Lincenburg, said he was reviewing the filing and declined to comment. A call to lawyer Sylvia M. Scott, who represents NewPoint and the three executives, was not immediately returned.

The SEC suit claims that from mid-2003 to mid-2009, the defendants persuaded about 100 people to invest more than $20 million in NewPoint debt instruments.

According to the lawsuit, investors initially were told the investments were low-risk. Many were falsely told they were investing in government bonds, insured certificates of deposit and companies backed by federal bailout money, the SEC said.

Instead, most of the money was transferred into accounts controlled by the NewPoint executives, where some was spent to build a Beverly Hills mansion for the Farahis and more than $18 million was lost through risky options futures trading, the SEC suit contends.

NewPoint is registered in Nevada but has offices in Beverly Hills, according to the SEC.

John Farahi, 52, has been the unpaid host of “The Economy Today” for eight years. The hour-long Persian language show discusses stock market trends and real estate issues each weekday and takes callers’ financial questions, said John Paley, KIRN’s general manager.

However, the afternoon show was canceled Monday. Listeners were told the program would be off the air indefinitely, and the station played Persian pop music instead.

“He did not go on the air today and will not go on the air until further notice,” Paley said without elaborating.

Paley added that he spoke with Farahi but declined to discuss their conversation.

Farahi is not an employee of the station, Paley said.

“He originally used to buy advertising from us, and at some point we needed a host of his magnitude, so we stopped taking his money and made him an unpaid host,” Paley said.

Most of the investors learned about NewPoint through Farahi’s program and were persuaded to invest after making appointments with the Farahis or Amouei to discuss investment opportunities, the lawsuit claims.

However, Paley said that to his knowledge, Farahi had not actively promoted NewPoint investments during the show, and he had not received any listener complaints.

“His name is up there. He’s identified as a businessman, and it doesn’t stop a listener from calling,” Paley said. “He has been very circumspect about not airing anything he shouldn’t air.”

The SEC suit claims that John Farahi has selectively repaid some investors but not others.

“Investors have been told that their money is safe and that they are guaranteed to get the entirety of their investment back” even though NewPoint lacks the funding to do so, according to the lawsuit.

Associated Press Writer Shaya Tayefe Mohajer contributed to this report.