A former investment fund manager who admitted to defrauding investors out of millions of dollars by falsely promising to purchase corporate bonds backed by the Troubled Asset Relief Program (TARP) was sentenced on March 18 to 120 months in federal prison.

John Farahi, 56, of Bel Air Estates, who operated the Beverly Hills-based New Point Financial Services, Inc., was also ordered to pay $24,366,617 in restitution to 59 victims.

Farahi pleaded guilty last June to four felony counts — mail fraud, loan fraud, selling unregistered securities and conspiracy to obstruct justice while collaborating with his corporate counsel to cover-up the fraud. In a plea agreement filed in United States District Court, Farahi acknowledged that the scheme caused losses of more than $7 million. However, prosecutors successfully demonstrated that the actual losses were well over $24 million.

Farahi also admitted that he engaged in a long-running scheme that defrauded victims by using their funds for unauthorized purposes, such as paying off prior investors and subsidizing options futures trading. The defendant acknowledged that he drew from personal lines of credit based upon false statements to Bank of America, Sun West Bank and U.S. Bank, and admitted that he violated federal securities laws by selling unregistered securities and failing to comply with the SEC’s rules and regulations. He also acknowledged that he conspired with his

attorney, David Tamman, to obstruct an SEC investigation by altering documents and providing false and misleading testimony under oath.

Tamman, 46, of Santa Monica, was found guilty following trial last year of 10 counts of obstruction of justice, altering records in a federal investigation, and being an accessory to Farahi’s crimes. He is scheduled to be sentenced on May 20.