Century City Man Arrested for Allegedly Running Ponzi Scheme

FBI special agents arrested a Century City man Friday for allegedly running a Ponzi scheme and cheating a victim out of millions of dollars.

A three-count fraud indictment alleges Shervin Neman, whose given name is Shervin Davatgarzadeh, 31, "caused victims to suffer losses of more than $3 million," according to a news release from the U.S. Attorney's Office.

Under the indictment, Neman is charged with two counts of wire fraud and one count of mail fraud.

According to the indictment, Neman allegedly "operated a Ponzi scheme from the summer of 2010 through last June by soliciting funds from investors with false claims that their money would be used to purchase foreclosed real estate and stocks," the release said. The indictment alleges that Neman used the funds for "personal expenditures and to repay other victims."

A lawsuit filed by the Securities and Exchange Commission in April of 2012 against Neman and his Century City-based company, the Neman Financial, Inc., "alleged that Neman was operating a multi-million dollar Ponzi scheme that was targeting primarily members of the Persian-Jewish community in Los Angeles."

After the SEC filed its lawsuit, Neman allegedly took $2 million from another victim and used it to pay back earlier victims, in addition to the law firm that represented him during the lawsuit, according to the release. 

Neman faces a maximum sentence of 20 years in federal prison for each of the charges.

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