(JTA) — A Ponzi scheme targeting the Persian-Jewish community in Los Angeles was shut down by the US Securities and Exchange Commission.
The SEC obtained an emergency court order on April 13 to stop the scheme.
According to the SEC, Shervin Neman, also known as Shervin Davatgarzadeh, allegedly raised more than $7.5 million from investors in the Persian-Jewish community, of which he is a member, by posing as a hedge fund manager.
Neman, 30, of Los Angeles, told investors that he had a hedge fund called Neman Financial L.P., which invested in foreclosed residential properties that would be quickly flipped for profit, as well as in Facebook shares and other high-profile initial public offerings, according to the SEC.
Instead he allegedly used the investors’ money to pay off other investors and finance his extravagant 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, according to the SEC.
Judge Jacqueline Nguyen of 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.
“By exploiting investors’ trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle,” Michele Wein Layne, associate regional director of the SEC’s Los Angeles office, said in an SEC statement.