LOS ANGELES (CBS) — The so-called "Bernie Madoff of Beverly Hills" is behind bars in a federal penitentiary Wednesday for his role in a $21 million wire fraud scheme.
KNX 1070's Ron Kilgore reports prosecutors say clients of Los Angeles real estate developer Ezri Namvar, 59, may have lost up to $1 billion in all.
Namvar, 59, of Brentwood, and 63-year-old Hamid Tabatabai of Agoura Hills were convicted in May of multiple counts of wire fraud by a Los Angeles federal jury that deliberated for about three hours after an eight-day trial.
Tabatabai was sentenced to nearly two years — 21 months — in federal prison and also ordered to pay a share of the $21 million, the prosecutor said.
U.S. District Judge Percy Anderson sentenced Namvar — former owner of the Marriott in downtown Los Angeles — to seven years behind bars and ordered him to pay restitution of $21 million, according to the U.S. Attorney's office.
"It's a company that held money in trusts while people were in the midst of real estate deals," said U.S. Attorney's Office spokesman Thom Mrozek. "Once you sold one piece of property, you could avoid certain tax liabilities if you purchased a new property within a certain period of time."
"His company was the guy in the middle that held that money to keep the IRS happy," Mrozek added.
Evidence showed that four victims deposited around $25 million with Namvar's Namco Financial Exchange Corp. to be placed in trust accounts for tax purposes.
Instead, Namvar and Tabatabai, the firm's controller, used the money to meet the company's payroll or transferred it to family members, according to prosecutors, who said the four victims received only about $4 million back from their deposits with Namvar's firm.
"He has ruined our lives...we worked very hard for our money," one elderly couple told CBS 2's Suraya Fadel on the condition of anonymity. "We're at an age now where we can't recoup or reearn the money that we've lost."
Defense attorneys argued that the case was not a fraud scheme but a contract dispute between the victims and the defendants.
Both defendants were told to surrender to authorities on Nov. 8.
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