Nearly a year after the SEC filed civil charges against former KIRN-AM Los Angeles financial talk host John Farahi, a federal grand jury has indicted him on criminal charges as well. Farahi and his associates are accused of bilking investors of $20 million.
Farahi allegedly used his Farsi-language radio show to get listeners, primarily from LA’s wealthy Iranian-Jewish community, to invest money with New Point Financial Services. They were promised conservative investments in bonds backed by the Troubled Asset Relief Program, but instead Farahi and his wife diverted cash to their own use and lost lots in risky investments, as well as returning cash to early investors to make it appear that the investments were profitable – a classic Ponzi scheme.
Farahi now faces numerous counts that add up to a potential sentence of over 700 years in prison, if convicted on all counts.
The grand jury also indicted Farahi’s former attorney, accusing him of trying to obstruct justice when the SEC began to investigate.