6 Get Probation in Riot Aid Fraud Case

Five men who took part in a scheme to defraud the government of millions of dollars in disaster loan money after the 1992 Los Angeles riots were sentenced to probation Tuesday after agreeing to cooperate in the prosecution of two other defendants.

Babek Nehmadi, 23, of Beverly Hills; Behdad Jadidolahi, 28, of Los Angeles; Mohammad Javad Kashani Rafye, 47, of Santa Monica; Samuel Dadbin, 39, of West Los Angeles and Daniel Ahdoot, 43, of Los Angeles pleaded guilty Feb. 7 to charges that they participated in what prosecutors describe as the largest disaster loan fraud case in U.S. history.

Assistant U.S. Atty. Nathan Hochman, who heads local disaster-loan prosecutions in Los Angeles Federal Court, said the six have agreed to help in the prosecution of the ringleaders, whom he identified as Faramarz (Frank) Javidzad, 34, and his brother, Fariborz Javidzad, 32, both of Beverly Hills.

Faramarz Javidzad has pleaded not guilty. Fariborz Javidzad is believed to have fled the country to avoid prosecution, Hochman said.

The brothers are Iranian immigrants who systematically recruited other members of the local Iranian community to take part in the loan fraud scheme, the prosecutor said.

According to the indictments in the case, the defendants applied for $2.6 million in low-interest, federally subsidized disaster aid from the Small Business Administration to repair business properties that were said to have been damaged in the 1992 riots. About $900,000 actually was disbursed to them, Hochman said.

The Javidzads are accused of instructing the other defendants in how to submit fraudulent applications. They also are accused of supplying phony income tax returns, invoices and other financial documents to support the applications.

In return for packaging the fraudulent applications, the Javidzads charged huge fees, which they collected by improperly listing their business as a creditor of the applicants’ companies, according to the indictments.

Hochman said the five defendants sentenced to probation on Tuesday have paid back all but about $150,000 of the money lent to them and have promised to pay back the remainder as soon as possible.

In addition to the five-year probation sentences, U.S. District Judge Manuel Real fined Nehmadi, Jadidolahi, Rafye, Dadbin and Ahdoot $2,500 apiece and ordered each of them to perform 1,500 hours of community service.