Manoucher Sarbaz is a Real Estate Fraudster Launching a New Project?

Originally Syndicated on May 13, 2024 @ 1:44 pm

Manoucher Sarbaz is a real estate developer who was recently sued by the Securities and Exchange Commission for fraud.

Now, the real estate developer is launching a new project called Rancho Lucerne.

Would people work with someone who was convicted of real estate fraud just a few months ago? That’s for you to answer once you read the whole story:

When the SEC Sued Manchour Sarbaz for Fraud

The SEC announced that on September 23, 2004, a U.S. District Judge found a Southern California real estate developer and its manager guilty of securities fraud, ordering them to pay $5.9 million in penalties. The developer, Pacific Golf Community Development LLC, and its manager, Manoucher Sarbaz, misled investors in a municipal bond offering for a housing development project, overvaluing land and making unfounded sales projections.

Judge Carney, in a 24-page ruling, determined that Pacific Golf and Sarbaz were aware that the land acquired using the bond proceeds and used as collateral for repayment was not valued at $28,000 per acre, as indicated in the bond offering paperwork. The Court determined that Sarbaz, via many businesses under his control, purchased the land at an average cost of $1,812 per acre. The Court further determined that Pacific Golf and Sarbaz lacked a justifiable foundation for their forecasts of being able to sell several lots inside the development on an annual basis. The Court noted that, thus far, no lots had been sold and the construction of the golf course had not been finished. The Court determined that an amount over $53 million in bonds had defaulted.

The Court issued a decision mandating Pacific Golf to pay a civil penalty of $4,900,000 and mandating Sarbaz to pay a civil penalty of $980,000. The Court further imposed an injunction that mandated both parties to abstain from engaging in any deceitful conduct in the future.

Where is Manoucher Sarbaz Now?

Currently, Manoucher Sarbaz is working on a housing project in California called Rancho Lucerne. He has given interviews to publications recently and it seems he is trying to move on from his criminal past.

There are several press releases talking about how Manoucher Sarbaz is a corporate executive who dabbles in the real estate industry. Clearly, his promotional articles are aimed at buying any mention of his previous real estate fraud case.

He has had a long past of lawsuits and legal battles. Here are some screenshots of his past lawsuits:

The above is a snippet of a lawsuit filed in 2018. Here, Sarbaz Manoucher had filed a lawsuit for contractual fraud against Shahram Elyaszadeh.

Below is a lawsuit that was filed against him. Farshid Hekmat filed a lawsuit regarding contracts against Manoucher Sarbaz in 2020. Both of these lawsuits were filed in the Los Angeles court.

The Rising Securities Fraud Cases In California

Recent securities fraud cases in California have highlighted various schemes ranging from sophisticated market manipulations to affinity fraud targeting specific communities. Here are some notable cases:

1. Pump-and-Dump and Passport Fraud: In March 2023, two men from California were indicted for participating in a complex $150 million securities fraud scheme that included pump-and-dump tactics. One of the defendants also allegedly attempted to acquire a fraudulent Ukrainian passport to evade prosecution.
2. Affinity Fraud Cases: Several cases have involved affinity fraud, where fraudsters target specific ethnic or social groups. Notable among these is a case where a Las Vegas resident was charged with crypto fraud targeting the Filipino community in California. Another case involved a Los Angeles individual charged with a $47 million scheme targeting the Orthodox Jewish community.
3. Artificial Intelligence-Related Fraud: The California Department of Financial Protection and Innovation (DFPI) issued desist and refrain orders against entities involved in investment frauds claiming ties to artificial intelligence. These schemes often promised high returns from AI-driven trading of crypto assets.
4. International Pump-and-Dump and Money Laundering: Four individuals were indicted for their roles in an international pump-and-dump scheme that involved securities fraud and money laundering, related to a company based in Quebec but manipulated from California.
5. Ponzi Scheme Targeting Elders: California’s Attorney General announced an indictment against an individual for running a Ponzi scheme that caused about $8 million in losses, predominantly affecting elderly victims. The scheme involved investments in development projects that were non-profitable, and the funds were used to pay earlier investors.

These cases reflect a range of fraudulent activities and the aggressive stance taken by various regulatory and law enforcement agencies to combat securities fraud in California.

How Cases Like Manoucher Sarbaz Could’ve Been Prevented

Preventing securities fraud involves a combination of regulatory oversight, public education, and diligent practices by investors and companies. Here are some key measures that could help prevent such fraudulent activities:

1. Strengthening Regulatory Frameworks: Regulatory bodies like the SEC, FINRA, and state regulators should continue to enhance their surveillance and enforcement mechanisms. Regular audits, stricter compliance requirements, and proactive investigations can deter potential fraudsters.
2. Enhancing Transparency: Companies should be required to provide more comprehensive disclosures about their financial health, business operations, and ownership. Transparent reporting can help investors make better-informed decisions and reduce the risk of fraud.
3. Educating Investors: Providing investors with the tools and knowledge to recognize signs of fraud is crucial. Workshops, online resources, and educational campaigns about the risks associated with certain investments and how to spot potential scams can empower investors.
4. Promoting Whistleblower Programs: Encouraging individuals to report unethical practices by offering protections and incentives for whistleblowers can lead to earlier detection of fraud. Regulatory bodies often rely on tips from insiders to initiate investigations.
5. Implementing Stronger Due Diligence Requirements: Financial institutions and investment firms should be required to perform rigorous due diligence before offering or promoting any investment products. This includes verifying claims made by issuers of securities.
6. Using Technology to Monitor and Detect Fraud: Leveraging advanced technologies like artificial intelligence and machine learning can help in analyzing trends and spotting irregularities that may indicate fraudulent activities.
7. International Cooperation: Since many securities fraud schemes operate across borders, international cooperation among regulatory bodies is essential for tracking and prosecuting offenders.
8. Legal and Financial Penalties: Imposing hefty fines and severe legal consequences for fraud can serve as a deterrent. Ensuring that penalties are not just a cost of doing business, but are substantial enough to discourage fraud, is vital.

By integrating these strategies, regulators, companies, and investors can work together to create a more secure investment environment and reduce the prevalence of securities fraud.

How To Report Securities Fraud In California

Reporting securities fraud is a crucial step in protecting yourself and others from potential financial harm. Here are general steps and specific avenues to report such activities:

1. Securities and Exchange Commission (SEC): The SEC handles violations involving securities. If you suspect a case of securities fraud, you can file a tip or complaint through the SEC’s online forms available at their official tips and complaints page.
2. Financial Industry Regulatory Authority (FINRA): If the fraud involves a brokerage firm or broker, you can file a complaint with FINRA. They regulate brokerage firms and their brokers. You can file a complaint online through the FINRA Complaint Center.
3. State Securities Regulators: Each state has its own securities regulator who deals with state-specific securities issues. You can contact your state’s securities regulator; contact details can be found on the North American Securities Administrators Association (NASAA) website at nasaa.org.
4. Federal Trade Commission (FTC): For broader types of fraud that may not be specifically about securities but involve deceptive business practices, you can report to the FTC through their online complaint assistant at ReportFraud.ftc.gov.
5. The Internet Crime Complaint Center (IC3): If the fraud involves online activities or transactions, you can file a complaint with the IC3, which is a partnership between the FBI and the National White Collar Crime Center, at IC3’s official site.
6. Local Law Enforcement: If the fraud involves a local business or individual, you might also consider reporting it to your local police department, especially if the amount of money involved is substantial.

It’s important to gather as much information as possible about the fraudulent activity, including names, dates, the nature of the fraud, how you and others have been affected, and any communications or documents that support your claims. This information will be crucial in helping the authorities investigate and potentially prosecute the offenders.