Ex-Loan Processor Gets 6 1/2-Year Term for SBA Fraud
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A ringleader in a network that defrauded the Small Business Administration out of $7 million--the most in agency history--has been sentenced to 6 1/2 years in prison, federal officials said.
Faramarz Javidzad, 36, was sentenced Monday in U.S. District Court in Los Angeles after assisting officials in their investigations. He pleaded guilty in January to felony criminal charges stemming from fraudulent loans he worked on as a loan processor for victims of the 1994 Northridge earthquake, the 1993 Malibu fires and the 1992 Los Angeles riots.
The sentence sends “a strong deterrent message to others who might desire to profit from the tragedy of others,” said Assistant U.S. Atty. Nathan J. Hochman of the Los Angeles Disaster Fraud Task Force, which prosecuted the case.
According to Hochman, Javidzad and his brother Fariborz, 33, now a fugitive in Iran, helped individuals in the Persian community obtain SBA disaster loans. The Javidzads created false tax documents to secure the loans and in return received up to 40% of the loan proceeds as their fees, Hochman said.
In a separate scheme, Faramarz Javidzad also pleaded guilty to using false documents to obtain more than $11.4 million in commercial and real estate loans and credit from Bank of America and Sanwa Bank.
Javidzad is one of 79 people prosecuted by the fraud task force since March 1994, including four Federal Emergency Management Agency inspectors. More than $17 million has been returned to the federal government from individuals who improperly received federal assistance, Hochman said.
The task force is continuing to investigate disaster loans disbursed after the 1995 floods.
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