SEC v. NEWPOINT FINANCIAL SERVICES, INC.; JOHN FARAHI; GISSOU RASTEGAR FARAHI; and ELAHEH AMOUEI, Central District of California (Jan. 11, 2010) — Complaint

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JOHN 
M. MCCOY III, Cal Bar. No. 166244 
. 
~f~~~Lf[Oll~~rAN, Cal. Bar No. 180681 . 
Email: [email protected] 
JESSICA 
R. PUATBASNANON, Cal. Bar No. 208074 
Email:I!uE-thasnan01!f·@sec.
g
ov 
BERNARD 
B. SMY RIll, Cal. BarNo. 217741 
Email: [email protected] 
Attorneys for Plaintiff
 
Securities and Exchange Commission

Rosalind 
R. Ty.son, Region~l Director .!
 
Andrew G. PetI1lon, ASSOCiate RegIOnal DIrector
 
5670 Wilshire 
Boulevar~ 11 th Floor
 
Los Angeles, California 
~0036
 
Telephone: (323) 965-3998
 
Fat:;simile: (323) 965-3908
 
UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 
SECURITIES AND EXCHANGE 
COMMISSION, 
Plaintiff, 
vs. 
NE\VPOINT FINANCIAL SERVICES, 
INC.; JOHN FARAHI' GISSOU 
RASTEGAR F
ARAHI; and ELAHEH 
AMOUEI, . 
Defendants, 
and 
TRIPLE 
"J" PLUS, LLC, 
Relief Defendant. 
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Plaintiff Securities and Exchange Commission ("Commission") alleges as 
follmvs: 
JURISDICTION AND VENUE 
1. This Court has jurisdiction over this action pursuant to Sections 20(b), 
20(.1)(1) and 22(a) 
of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 
~\lNl.O 0124~~~ 
COMPLAINT FOR VIOLATIONS OF 
·THE SECURITIES LAWS 

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§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(I), 21(d)(3)(A), 21(e) and 27 of 
the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(1), 
78u(d)(3)(A), 78u(e) 
& 78aa. Defendants have, directly or indirectly, made use of 
the means or instrumentalities ofinterstate commerce, ofthe mails, or ofthe 
facilities 
of a national securities exchange, in connection with the transactions, 
acts, practices, and courses 
ofbusiness alleged in this Complaint. 
2. Venue is proper in this district pursuant to Section 22(a) 
of the 
Securities Act, 
15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. 
§ 78aa, because certain 
ofthe transactions, acts, practices, and courses ofconduct 
constituting violations 
ofthe federal securities laws occurred within this district, 
Defendants John Farahi, Gissou Rastegar Farahi, and Elaheh Amouei reside in this 
district, and Defendant NewPoint Financial Services, Inc. (''NewPoint'') transacts 
or has transacted business in this district. 
SUMMARY 
3. This matter involves an unregistered offering fraud primarily targeting 
the Los Angeles Iranian-American community. Since 
atleast 2003, Defendant 
NewPoint, a Beverly Hills based corporation controlled 
by Defendants John Farahi 
and Gissou Rastegar Farahi, has offered and sold more than $20 million worth 
of 
debentures to more than one hundred investors. The vast majority of the money 
raised was transferred to accounts held 
by Defendants John and Gissou Farahi. 
Defendants John and Gissou Farahi, in tum, used the investor funds to, among 
other things, construct a multi-million dollar personal residence in Beverly Hills, 
California·and to engage in risky options futures trading in the stock market in 
which Defendants John and Gissou Farahi lost more than $18 million in 2008 and 
the beginning 
of 2009. 
4. Most investors learned 
ofNewPoint through a daily finance radio 
program that Defendant John Farahi hosts on a Farsi language radio station in the 
Los Angeles area. Investors were typically solicited 
to invest in the debentures by 
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1 the Farahis and/or Defendant Elaheh Amouei, NewPoint's controller, after making 
2 an appointment 
to discuss investment opportunities offered by NewPoint. 
3 
5. Defendants John and Gissou Farahi and Defendant Amouei misled 
4 investors who purchased NewPoint debentures in several ways. Defendants John 
5 and Gissou Farahi and Defendant Amouei falsely told investors that the NewPoint 
6 debentures were low-risk. Many investors were also falsely told that they were 
7 investing in FDIC insured certificates 
of deposit, government bonds, and/or 
8 corporate bonds issued by companies backed by funds from the Troubled Asset 
9 Relief Program ("TARP"). Additionally, although NewPoint at some point created 
lOa private placement memorandum ("PPM") that disclosed some risk associated 
11 with the debenture investment, most investors claim that they did not receive it. 
12 Finally, Defendants John and Gissou Farahi and Defendant Amouei failed to 
13 disclose to investors that their money would be provided to the Farahis and used 
14 for risky trading in options futures and transferred to Relief Defendant Triple "J" 
15 Plus,LLC("ReliefDefendantTriple"J") tobeusedfortheconstruction ofthe 
16 Defendants John and Gissou Farahi's multi-million dollar personal residence. 
17 6. Since approximately June 2009, Defendant NewPoint, Defendants 
18 John and Gissou Farahi, and Defendant Amouei (collectively, "all Defendants") 
19 have made further misrepresentations to investors in an effort to lull them into 
20 keeping their money with NewPoint. Investors have been told that their money 
is 
21 safe and that they are guaranteed to get the entirety of their investment back -­
22 despite the fact that Defendant NewPoint lacks sufficient funds to make all 
23 investors whole. Defendant John Farahi has also paid back some investors on a 
24 selective basis while failing to return money to other investors who have asked for 
25 a return oftheir investment. Defendant Amouei has falsely told some ofthe 
26 investors who have not received a return oftheir investment that NewPointwas 
27 unable to return their money because the Commission has frozen Defendant 
28 NewPoint's financial accounts. 
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7. The Defendants have violated and are violating Sections 5(a) and 5(c) 
oftheSecuritiesAct, 15U.S.C.§§77e(a)and77e(c),Section17(a) ofthe . 
Securities Act, 
15 U.S.C. § 77q(a), and Section 10(b) ofthe Exchange Act, 15 
U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. By this action, 
the Commission seeks a temporary restraining order and preliminary and 
permanent injunctions prohibiting future such violations as to all Defendants, 
appointment 
of a receiver over Defendant NewPoint and Relief Defendant Triple 
"J", an order freezing the assets 
of Defendants NewPoint, Defendants John and 
Gissou Farahi, and Relief Defendant Triple "J", an order requiring accountings 
from Defendants NewPoint, Defendants John and Gissou Farahi, and Relief 
I?efendant Triple "J", and an order prohibiting the destruction 
ofdocuments by all 
Defendants and Relief Defendant Triple 
"1". The Commission also seeks an order 
requiring disgorgement 
of ill-gotten gains with prejudgment interest thereon, 
obtained by Defendant NewPoint, Defendants John and Gissou Farahi, and Relief 
Defendant Triple "J", and civil penalties against all Defendants. 
THE DEFENDANTS AND RELIEF DEFENDANT 
8. NewPoint Financial Services, Inc. ("NewPoint") is  a Nevada 
corporation registered with 
the Nevada Secretary of State since 1999, and operates 
from offices located in Beverly Hills, California. No registration statement has 
been filed with the Commission or has been in effect with respect 
to the securities 
offering by NewPoint alleged in this Complaint. 
9. John Farahi, age 52, resides in Beverly Hills, California, and is 
married to Defendant Gissou RastegarFarahi. Defendant John Farahi is the co­
owner, president, secretary and treasurer 
ofNewPoint and has been associated with 
NewPoint Securities, LLC since September 1999. He holds Series 4, 7, 24, and 
63 
licenses with FINRA. Defendant John Farahi also has control over several entities 
affiliated with NewPoint, including Relief Defendant Triple "J". Defendants John 
and Gissou Farahi are the sole trustees and beneficiaries 
ofthe Farahi Family 
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1 Trust, to which investor funds have been transferred.
 
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10. Gissou Rastegar Farahi, age 50, resides in Beverly Hills, California, 
3 and 
is married to Defendant John Farahi. Defendant Gissou Farahi is  the co-owner 
4 and former vice president 
ofNewPoint. 
11. Elaheh Amouei, age 54, resides in Thousand Oaks, California. 
6 Amouei is NewPoint's controller and the personal bookkeeper for Defendants John 
7 and Gissou Farahi. 
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12. Triple "J"Plus, LLC ("Triple 'J"'), is an active limited liability 
9 company organized in Nevada. Defendant John Farahi is  the controlling owner 
and managing member 
of the entity. Defendants John and Gissou Farahi have 
11 control over the Triple "J" bank accounts. 
12 THE FRAUDULENT SCHEME 
13 A. The·Offering of NewPoint Debentures 
·14 13. In May 2003, Defendant NewPoint began offering and selling its 
debentures to investors. Defendant John Farahi is NewPoint's co-owner and 
16 president. He has a daily, finance-related program on a local Farsi language radio 
17 station, formerly had a show on a Farsi language satellite television station, and 
18 gives frequent public talks regarding finance in the region. In his public 
19 appearances, Defendant John Farahi touts his and Defendant NewPoint's 
conservative investment philosophy. Most 
ofDefendant NewPoint's investors 
21 learned of NewPoint through Defendant John Farahi's radio program and made an 
22 appointment 
to meet with him at NewPoint's offices in order to discuss investment 
23 opportunities. 
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14. In general, potential investors interested in learning more about 
investment opportunities that NewPoint had 
to offer met with Defendants John and 
26 Gissou Farahi and/or Defendant Amouei at NewPoint's offices. During these 
27 meetings, Defendants John and Gissou Farahi and/or Defendant Amouei solicited 
28 investors to purchase debentures issued by NewPoint. 
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15. Investors interested in purchasing the NewPoint debentures filled out 
a subscription agreement, but were provided with little other material in connection 
with their investment. Although DefendantNewPoint at  some point created 
private placement memoranda ("PPM") explaining the investment and some risks, 
most investors claim they never received 
it. In addition, Defendants John and 
Gissou Farahi and/or Defendant Amouei failed to provide investors with audited or 
unaudited financial information regarding NewPoint prior to their investment. 
Approximately 40 
ofthe more than 100 purchasers ofNewPoint debentures did not 
qualify 
as accredited investors and many had little or no prior investment 
experience. Most 
oftheNewPointinvestorsareresidents ofCalifomia;however, 
atleast one was a resident ofthe state ofWashingtonat the time sheinvested. 
B.	 The Defendants Made Material Misrepresentations About the NewPoint 
Debentures 
and Misappropriated Investor Funds 
16. In connection with the offer and sale ofNewPoint's debentures, all 
Defendants materially misrepresented the investment anqomittedmaterial facts. 
When investors met with Defendants John and Gissou Farahi and/or Defendant 
Amouei to discuss investmentopportunities, they were told that theNewPoint 
investment was low-risk. In fact, Defendants John and Gissou Farahi and/or 
Defendant Amouei falsely told many investors that they were investing in FDIC 
insured CDs, government bonds, and/or corporate bonds issued by companies 
backed by TARP funds. Defendants John and Gissou Farahi and/or Defendant 
Amouei never disclosed to investors that their money would 
be used for risky 
options futures trading 
ina brokerage account held by Defendant Gissou Farahi or 
transferred to other entities controlled by the Farahis, such 
as transfers to Relief 
Defendant Triple "J" to be used to build a multi-million dollar home for 
Defendants John and Gissou Farahi. 
17. The various PPMs describing the NewPoint debentures included 
disclosures stating that investing in the debentures was high-risk. The PPMs also 
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disclosed that approximately 27% to 30% of the money raised from the sale of the 
debentures would 
be loaned to the Farahis. However, not only did Defendants 
John and Gissou Farahi and/or Defendant Amouei fail to provide the PPMs to most 
investors, it appears that they only added the disclosure regarding loans to 
Defendant John Farahi in 2009, 
after the offering ceased. 
18. In total, Defendant NewPoint, through the efforts 
ofDefendants John 
and Gissou Farahi and Defendant Amouei, raised more than $20 million from May 
2003 until April 2009 when it ceased offering its debentures. Investor funds were 
initially deposited into a NewPoint bank account controlled 
by Defendants John 
and Gissou Farahi to which Defendant Amouei had access. 
19. The vast majority 
of investor funds were then transferred either to 
ReliefDefendant Triple "J"or to Defendants John and Gissou Farahi's family trust 
account. Funds transferred to Triple 
"J" were primarily used to construct a multi­
million dollar personal residence for Defendants John and Gissou Farahi in 
Beverly Hills, California. The majority 
of investor funds that were transferred to 
Defendants John 
and Gissou Farahi's family trust account were later transferred to 
a brokerage account held 
by Defendant Gissou Farahi at Interactive Brokers and 
invested in risky options futures. Defendant John Farahi made most 
of the trading 
decisions 
inthis brokerage account. This risky trading by Defendant John Farahi 
. resulted 
in more than $18 million in losses throughout the end of2008 and the 
beginning
of 2009. 
.  C. 
The Defendants Continue to Mislead Investors and Dissipate Investor 
Funds 
20. Beginning around June 2009 and continuing through the present, 
investors have been contacting Defendant NewPoint and asking Defendant John 
Farahi and Defendant Amouei about their investment. These questions stemmed 
from investors becoming aware 
ofthe Commission's investigation into NewPoint's 
debenture offering. Some investors sought an update 
onthe status oftheir 
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investment, while others began asking to cash-out oftheir investment entirely. 
21. In response to these inquiries, Defendant John Farahi and Defendant 
Amouei have made a number 
of misrepresentations. Defendant Amouei falsely 
told investors that the Commission's investigation was merely a "routine audit" 
of 
NewPoint. Defendant John Farahi and Defendant Amouei assure.d several 
investors that their money was safe. ,Defendant John Farahi guaranteed 
at least one 
investor that he would receive his investment in full 
ifhe would keep his money 
with NewPoint for several more months. Indeed, 
at least one investor who has 
asked for, but not yet received, a return 
ofhis investment, was falsely told by 
Defendant Amouei that he could not get his money back because the Commission 
had frozen Defendant NewPoint's financial accounts; 
22. DefendantNewPoint,at the direction 
ofDefendantJohn Farahi, 
continues to dissipate investor funds by refunding money to certain favored 
investors, at the expense 
of other investors whom NewPoint has refused to repay. 
FIRST CLAIM FOR RELIEF
 
Unregistered Offer And Sale Of Securities
 
Violations 
of Sections 5(a) and 5(c) of the Securities Act
 
(Against All Defendants)
 
23. The Commission realleges and incorporates byreference paragraphs 1 
through 22 above. 
24. All Defendants, and each 
of them, by engaging in the conduct 
described above, directly or indirectly, made use 
ofmeans or instrumentalities of 
transportation or communication in interstate commerce or ofthe mails, to offer to 
sell or 
to sell securities, or to carry or cause such securities to be carried through 
the mails or 
in interstate commerce for the purpose of sale or delivery after sale. 
25. No registration' statement has been filed with the Commission or has 
been in effect with respect to the offering alleged herein; By engaging in the 
conduct described above, each 
of the Defendants violated, and unless restrained 
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land enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act, 
15 U.S.C. §§ 77e(a) and 77e(c). 
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SECOND CLAIM FOR RELIEF
 
FRAUD IN THE OFFER OR SALE OF SECURITIES
 
Violations of Section 17(a) of the Securities Act
 
(Against All Defendants) ­
7 26. The Commission realleges and incorporates by reference paragraphs 1 
8 through 22 above. 
-9 27. All Defendants, and each 
ofthem, by engaging in the conduct 
described above, directly or}ndirectly, in the offer or sale 
ofsecuritiesby the use 
11 ofmeansorinstruments oftransportationorcommunicationininterstate 
12 commerce or by use of the mails: 
13 a. with scienter, employed devices, schemes, or artifices to 
14 defraud; 
b. obtainedmoneyorpropertybymeans ofuntruestatements ofa 
16 material fact or by omitting to state a material fact necessary in 
17 -order to make the statements made, in light ofthe 
18 circumstances under which they were made, not misleading; or 
19 c. engaged in transactions, practices, or courses ofbusiness which 
- operated or would operate as a fraud or deceit upon the 
21-purchaser. 
22 28. By engaging in the conduct described above, all Defendants violated, 
23 -  and unlessrestrairied and enjoined will continue to violate, Section 17(a) of the 
24 St(curities Act, 
15 U.S.C. § 77q(a). 
III 
26 III 
27 III 
28 III 
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SECOND CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF
 
SECURITIES
 
Violations of Section 1 O(b) of the Exchange Act and Rule 10b-S Thereunder
 
(Against All Defendants)
 
29. The Commission realleges and incorporates by reference paragraphs 1 
through 
22 above. 
30. All Defendants, and each 
of them, by engaging in the conduct 
described above, directly or indirectly, in connection with the purchase or sale 
of a 
security, by the use 
of means or instrumentalities of interstate commerce, of the 
mails,or 
ofthefacilities ofa nationalsecuritiesexchange,withscienter: 
a. employed devices, schemes, or artifices to defraud; 
b. made untrue statements of a material fact or omitted to state a 
material fact necessary in order 
to make the statements made, 
in the light 
of the circumstances under which they were made, 
not misleading; or 
c. engaged in acts, practices, or courses of business which 
operated or would operate 
as a fraud or deceit upon other 
persons. 
By engaging in the conduct described above, all Defendants violated, and unless 
restrained and enjoined will continue 
to violate, Section 10(b) ofthe Exchange 
Act, 
15 U.S.C. § 78j(b), and RulelOb-5 thereunder, 17 C.F.R. § 240.IOb-5. 
PRAYER FOR RELIEF 
WHEREFORE, the Commission respectfully requests that the Court: 
. L 
Issue findings 
of fact and conclusions of law that all Defendants committed . 
the alleged violations. 
III 
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1 II.
 
2 Issue judgments, in forms consistent with Fed. R. Civ. P. 65(d), temporarily, 
3 preliminarily and permanently enjoining the Defendants and their officers, agents, 
4 servants, employees, and attorneys, and those persons in active concert 
or 
participation with any ofthem, who receive actual notice ofthe judgment by 
6 personal service or otherwise, and each ofthem, from violating Sections 5(a), S(c), 
7 and 17(a) 
of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c), and 77q(a), and 
8 Section 10(b) 
ofthe Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 
9 17 C.F.R. 
§ 240.10b~5 . 
. 
III. 
11 . Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 
12 order and a preliminary injunction freezing the assets of Defendants NewPoint, 
13 Defendants John and Gissou Farahi, and Relief Defendant Triple "J" and any entity 
14 affiliated with any 
of them, appointing areceiver over Defendant NewPoint and 
Relief Defendant Triple "J", requiring accountings from Defendants NewPoint, 
16 Defendants 
John and Gissou Farahi, and ReliefDefendant Triple "J", and 
17 . prohibiting all Defendants and 
Relief Defendant Triple "J" from destroying
 
18 documents.
 
19 
IV.
 
Order Defendants NewPoint, Defendants John and Gissou Farahi, and Relief 
.21 Defendant Triple 
"J" to disgorge all ill-gotten gains from their illegal conduct, 
22 together with prejudgment interest thereon. 
23 
V. 
24 Order all Defendants to pay civil penalties under Section 20(d) ofthe 
Securities Act, 
15 U.S.C. § 77t(d), and Section 21(d)(3) ofthe Exchange Act, 
26 15 U.S.C. § 78u(d)(3). 
27 III 
28 III 
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';. 
VI. 
Retainjurisdiction ofthis actioninaccordancewiththeprinciples ofequity 
and the Federal Rules 
ofCivil Procedure in order to implement and carry out the 
tenns 
ofall orders and decrees that may be entered, or to entertain any suitable 
application 
or motion for additional relief within the jurisdiction ofthis Court. 
VII. 
Grant such other and further relief as-this Court may detennine to 
be just and 
necessary. 
DATED: January 
7,2010	 
J? -.-f r.M.
 
Bernard B. Smyth ­
John M. McCoy III
 
Attorneys for Plaintiff 
Securities and Exchange-Commission 
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JOHN M. MCCOY III, Cal Bar. No. 166244 

. ~f~~~Lf[Oll~~rAN, Cal. Bar No. 180681 . 
Email: [email protected] 
JESSICA R. PUATBASNANON, Cal. Bar No. 208074 
Email:I!uE-thasnan01!f·@sec.gov 
BERNARD B. SMY RIll, Cal. BarNo. 217741 
Email: [email protected] 

Attorneys for Plaintiff
 
Securities and Exchange Commission

Rosalind R. Ty.son, Region~l Director .!
 

Andrew G. PetI1lon, ASSOCiate RegIOnal DIrector
 
5670 Wilshire Boulevar~ 11 th Floor
 
Los Angeles, California ~0036
 
Telephone: (323) 965-3998
 
Fat:;simile: (323) 965-3908
 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

vs. 

NE\VPOINT FINANCIAL SERVICES, 
INC.; JOHN FARAHI' GISSOU 
RASTEGAR FARAHI; and ELAHEH 
AMOUEI, . 

Defendants, 

and 

TRIPLE "J" PLUS, LLC, 

Relief Defendant. 

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Plaintiff Securities and Exchange Commission ("Commission") alleges as 

follmvs: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this action pursuant to Sections 20(b), 

20(.1)(1) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 

~\lNl.O 0124~~~ 
COMPLAINT FOR VIOLATIONS OF 
·THE SECURITIES LAWS 



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§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(I), 21(d)(3)(A), 21(e) and 27 of 

the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e) & 78aa. Defendants have, directly or indirectly, made use of 

the means or instrumentalities of interstate commerce, of the mails, or of the 

facilities of a national securities exchange, in connection with the transactions, 

acts, practices, and courses ofbusiness alleged in this Complaint. 

2. Venue is proper in this district pursuant to Section 22(a) of the 

Securities Act, 15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. 

§ 78aa, because certain of the transactions, acts, practices, and courses of conduct 

constituting violations of the federal securities laws occurred within this district, 

Defendants John Farahi, Gissou Rastegar Farahi, and Elaheh Amouei reside in this 

district, and Defendant NewPoint Financial Services, Inc. (''NewPoint'') transacts 

or has transacted business in this district. 

SUMMARY 

3. This matter involves an unregistered offering fraud primarily targeting 

the Los Angeles Iranian-American community. Since at least 2003, Defendant 

NewPoint, a Beverly Hills based corporation controlled by Defendants John Farahi 

and Gissou Rastegar Farahi, has offered and sold more than $20 million worth of 

debentures to more than one hundred investors. The vast majority of the money 

raised was transferred to accounts held by Defendants John and Gissou Farahi. 

Defendants John and Gissou Farahi, in tum, used the investor funds to, among 

other things, construct a multi-million dollar personal residence in Beverly Hills, 

California·and to engage in risky options futures trading in the stock market in 

which Defendants John and Gissou Farahi lost more than $18 million in 2008 and 

the beginning of 2009. 

4. Most investors learned ofNewPoint through a daily finance radio 

program that Defendant John Farahi hosts on a Farsi language radio station in the 

Los Angeles area. Investors were typically solicited to invest in the debentures by 

2
 



1 the Farahis and/or Defendant Elaheh Amouei, NewPoint's controller, after making 

2 an appointment to discuss investment opportunities offered by NewPoint. 

3 5. Defendants John and Gissou Farahi and Defendant Amouei misled 

4 investors who purchased NewPoint debentures in several ways. Defendants John 

5 and Gissou Farahi and Defendant Amouei falsely told investors that the NewPoint 

6 debentures were low-risk. Many investors were also falsely told that they were 

7 investing in FDIC insured certificates of deposit, government bonds, and/or 

8 corporate bonds issued by companies backed by funds from the Troubled Asset 

9 Relief Program ("TARP"). Additionally, although NewPoint at some point created 

lOa private placement memorandum ("PPM") that disclosed some risk associated 

11 with the debenture investment, most investors claim that they did not receive it. 

12 Finally, Defendants John and Gissou Farahi and Defendant Amouei failed to 

13 disclose to investors that their money would be provided to the Farahis and used 

14 for risky trading in options futures and transferred to Relief Defendant Triple "J" 

15 Plus, LLC ("Relief Defendant Triple "J") to be used for the construction of the 

16 Defendants John and Gissou Farahi's multi-million dollar personal residence. 

17 6. Since approximately June 2009, Defendant NewPoint, Defendants 

18 John and Gissou Farahi, and Defendant Amouei (collectively, "all Defendants") 

19 have made further misrepresentations to investors in an effort to lull them into 

20 keeping their money with NewPoint. Investors have been told that their money is 

21 safe and that they are guaranteed to get the entirety of their investment back -­

22 despite the fact that Defendant NewPoint lacks sufficient funds to make all 

23 investors whole. Defendant John Farahi has also paid back some investors on a 

24 selective basis while failing to return money to other investors who have asked for 

25 a return oftheir investment. Defendant Amouei has falsely told some of the 

26 investors who have not received a return of their investment that NewPointwas 

27 unable to return their money because the Commission has frozen Defendant 

28 NewPoint's financial accounts. 

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7. The Defendants have violated and are violating Sections 5(a) and 5(c) 

of the Securities Act, 15 U.S. C. §§ 77e(a) and 77e(c), Section 17(a) of the . 

Securities Act, 15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act, 15 

U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. By this action, 

the Commission seeks a temporary restraining order and preliminary and 

permanent injunctions prohibiting future such violations as to all Defendants, 

appointment of a receiver over Defendant NewPoint and Relief Defendant Triple 

"J", an order freezing the assets of Defendants NewPoint, Defendants John and 

Gissou Farahi, and Relief Defendant Triple "J", an order requiring accountings 

from Defendants NewPoint, Defendants John and Gissou Farahi, and Relief 

I?efendant Triple "J", and an order prohibiting the destruction ofdocuments by all 

Defendants and Relief Defendant Triple "1". The Commission also seeks an order 

requiring disgorgement of ill-gotten gains with prejudgment interest thereon, 

obtained by Defendant NewPoint, Defendants John and Gissou Farahi, and Relief 

Defendant Triple "J", and civil penalties against all Defendants. 

THE DEFENDANTS AND RELIEF DEFENDANT 

8. NewPoint Financial Services, Inc. ("NewPoint") is a Nevada 

corporation registered with the Nevada Secretary of State since 1999, and operates 

from offices located in Beverly Hills, California. No registration statement has 

been filed with the Commission or has been in effect with respect to the securities 

offering by NewPoint alleged in this Complaint. 

9. John Farahi, age 52, resides in Beverly Hills, California, and is 

married to Defendant Gissou RastegarFarahi. Defendant John Farahi is the co­

owner, president, secretary and treasurer ofNewPoint and has been associated with 

NewPoint Securities, LLC since September 1999. He holds Series 4, 7, 24, and 63 

licenses with FINRA. Defendant John Farahi also has control over several entities 

affiliated with NewPoint, including Relief Defendant Triple "J". Defendants John 

and Gissou Farahi are the sole trustees and beneficiaries of the Farahi Family 

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1 Trust, to which investor funds have been transferred.
 

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 10. Gissou Rastegar Farahi, age 50, resides in Beverly Hills, California, 

3 and is married to Defendant John Farahi. Defendant Gissou Farahi is the co-owner 

4 and former vice president ofNewPoint. 

11. Elaheh Amouei, age 54, resides in Thousand Oaks, California. 

6 Amouei is NewPoint's controller and the personal bookkeeper for Defendants John 

7 and Gissou Farahi. 

8 12. Triple "J"Plus, LLC ("Triple 'J"'), is an active limited liability 

9 company organized in Nevada. Defendant John Farahi is the controlling owner 

and managing member of the entity. Defendants John and Gissou Farahi have 

11 control over the Triple "J" bank accounts. 

12 THE FRAUDULENT SCHEME 

13 A. The·Offering of NewPoint Debentures 

·14 13. In May 2003, Defendant NewPoint began offering and selling its 

debentures to investors. Defendant John Farahi is NewPoint's co-owner and 

16 president. He has a daily, finance-related program on a local Farsi language radio 

17 station, formerly had a show on a Farsi language satellite television station, and 

18 gives frequent public talks regarding finance in the region. In his public 

19 appearances, Defendant John Farahi touts his and Defendant NewPoint's 

conservative investment philosophy. Most ofDefendant NewPoint's investors 

21 learned of NewPoint through Defendant John Farahi's radio program and made an 

22 appointment to meet with him at NewPoint's offices in order to discuss investment 

23 opportunities. 

24 14. In general, potential investors interested in learning more about 

investment opportunities that NewPoint had to offer met with Defendants John and 

26 Gissou Farahi and/or Defendant Amouei at NewPoint's offices. During these 

27 meetings, Defendants John and Gissou Farahi and/or Defendant Amouei solicited 

28 investors to purchase debentures issued by NewPoint. 

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15. Investors interested in purchasing the NewPoint debentures filled out 

a subscription agreement, but were provided with little other material in connection 

with their investment. Although DefendantNewPoint at some point created 

private placement memoranda ("PPM") explaining the investment and some risks, 

most investors claim they never received it. In addition, Defendants John and 

Gissou Farahi and/or Defendant Amouei failed to provide investors with audited or 

unaudited financial information regarding NewPoint prior to their investment. 

Approximately 40 of the more than 100 purchasers ofNewPoint debentures did not 

qualify as accredited investors and many had little or no prior investment 

experience. Most of the NewPoint investors are residents of Califomia; however, 

at least one was a resident of the state ofWashington at the time sheinvested. 

B.	 The Defendants Made Material Misrepresentations About the NewPoint 

Debentures and Misappropriated Investor Funds 

16. In connection with the offer and sale ofNewPoint's debentures, all 

Defendants materially misrepresented the investment anqomittedmaterial facts. 

When investors met with Defendants John and Gissou Farahi and/or Defendant 

Amouei to discuss investmentopportunities, they were told that theNewPoint 

investment was low-risk. In fact, Defendants John and Gissou Farahi and/or 

Defendant Amouei falsely told many investors that they were investing in FDIC 

insured CDs, government bonds, and/or corporate bonds issued by companies 

backed by TARP funds. Defendants John and Gissou Farahi and/or Defendant 

Amouei never disclosed to investors that their money would be used for risky 

options futures trading ina brokerage account held by Defendant Gissou Farahi or 

transferred to other entities controlled by the Farahis, such as transfers to Relief 

Defendant Triple "J" to be used to build a multi-million dollar home for 

Defendants John and Gissou Farahi. 

17. The various PPMs describing the NewPoint debentures included 

disclosures stating that investing in the debentures was high-risk. The PPMs also 

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disclosed that approximately 27% to 30% of the money raised from the sale of the 

debentures would be loaned to the Farahis. However, not only did Defendants 

John and Gissou Farahi and/or Defendant Amouei fail to provide the PPMs to most 

investors, it appears that they only added the disclosure regarding loans to 

Defendant John Farahi in 2009, after the offering ceased. 

18. In total, Defendant NewPoint, through the efforts ofDefendants John 

and Gissou Farahi and Defendant Amouei, raised more than $20 million from May 

2003 until April 2009 when it ceased offering its debentures. Investor funds were 

initially deposited into a NewPoint bank account controlled by Defendants John 

and Gissou Farahi to which Defendant Amouei had access. 

19. The vast majority of investor funds were then transferred either to 

ReliefDefendant Triple "J"or to Defendants John and Gissou Farahi's family trust 

account. Funds transferred to Triple "J" were primarily used to construct a multi­

million dollar personal residence for Defendants John and Gissou Farahi in 

Beverly Hills, California. The majority of investor funds that were transferred to 

Defendants John and Gissou Farahi's family trust account were later transferred to 

a brokerage account held by Defendant Gissou Farahi at Interactive Brokers and 

invested in risky options futures. Defendant John Farahi made most of the trading 

decisions inthis brokerage account. This risky trading by Defendant John Farahi 

. resulted in more than $18 million in losses throughout the end of2008 and the 

beginningof 2009. 

. C. The Defendants Continue to Mislead Investors and Dissipate Investor 

Funds 

20. Beginning around June 2009 and continuing through the present, 

investors have been contacting Defendant NewPoint and asking Defendant John 

Farahi and Defendant Amouei about their investment. These questions stemmed 

from investors becoming aware of the Commission's investigation into NewPoint's 

debenture offering. Some investors sought an update onthe status of their 

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investment, while others began asking to cash-out of their investment entirely. 

21. In response to these inquiries, Defendant John Farahi and Defendant 

Amouei have made a number of misrepresentations. Defendant Amouei falsely 

told investors that the Commission's investigation was merely a "routine audit" of 

NewPoint. Defendant John Farahi and Defendant Amouei assure.d several 

investors that their money was safe. ,Defendant John Farahi guaranteed at least one 

investor that he would receive his investment in full ifhe would keep his money 

with NewPoint for several more months. Indeed, at least one investor who has 

asked for, but not yet received, a return ofhis investment, was falsely told by 

Defendant Amouei that he could not get his money back because the Commission 

had frozen Defendant NewPoint's financial accounts; 

22. DefendantNewPoint,at the direction ofDefendantJohn Farahi, 

continues to dissipate investor funds by refunding money to certain favored 

investors, at the expense of other investors whom NewPoint has refused to repay. 

FIRST CLAIM FOR RELIEF
 

Unregistered Offer And Sale Of Securities
 

Violations of Sections 5(a) and 5(c) of the Securities Act
 

(Against All Defendants)
 

23. The Commission realleges and incorporates byreference paragraphs 1 

through 22 above. 

24. All Defendants, and each of them, by engaging in the conduct 

described above, directly or indirectly, made use ofmeans or instrumentalities of 

transportation or communication in interstate commerce or of the mails, to offer to 

sell or to sell securities, or to carry or cause such securities to be carried through 

the mails or in interstate commerce for the purpose of sale or delivery after sale. 

25. No registration' statement has been filed with the Commission or has 

been in effect with respect to the offering alleged herein; By engaging in the 

conduct described above, each of the Defendants violated, and unless restrained 

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land enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act, 

15 U.S.C. §§ 77e(a) and 77e(c). 

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SECOND CLAIM FOR RELIEF
 

FRAUD IN THE OFFER OR SALE OF SECURITIES
 

Violations of Section 17(a) of the Securities Act
 

(Against All Defendants) ­

7 26. The Commission realleges and incorporates by reference paragraphs 1 

8 through 22 above. 

-9 27. All Defendants, and each of them, by engaging in the conduct 

described above, directly or}ndirectly, in the offer or sale ofsecuritiesby the use 

11 of means or instruments of transportation or communication in interstate 

12 commerce or by use of the mails: 

13 a. with scienter, employed devices, schemes, or artifices to 

14 defraud; 

b. obtained money or property by means ofuntrue statements of a 

16 material fact or by omitting to state a material fact necessary in 

17 - order to make the statements made, in light of the 

18 circumstances under which they were made, not misleading; or 

19 c. engaged in transactions, practices, or courses ofbusiness which 

- operated or would operate as a fraud or deceit upon the 

21- purchaser. 

22 28. By engaging in the conduct described above, all Defendants violated, 

23 - and unlessrestrairied and enjoined will continue to violate, Section 17(a) of the 

24 St(curities Act, 15 U.S.C. § 77q(a). 

III 

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SECOND CLAIM FOR RELIEF 

FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF
 

SECURITIES
 

Violations of Section 1 O(b) of the Exchange Act and Rule 10b-S Thereunder
 

(Against All Defendants)
 

29. The Commission realleges and incorporates by reference paragraphs 1 

through 22 above. 

30. All Defendants, and each of them, by engaging in the conduct 

described above, directly or indirectly, in connection with the purchase or sale of a 

security, by the use of means or instrumentalities of interstate commerce, of the 

mails, or of the facilities of a national securities exchange, with scienter: 

a. employed devices, schemes, or artifices to defraud; 

b. made untrue statements of a material fact or omitted to state a 

material fact necessary in order to make the statements made, 

in the light of the circumstances under which they were made, 

not misleading; or 

c. engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon other 

persons. 

By engaging in the conduct described above, all Defendants violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange 

Act, 15 U.S.C. § 78j(b), and RulelOb-5 thereunder, 17 C.F.R. § 240.IOb-5. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court: 

. L 

Issue findings of fact and conclusions of law that all Defendants committed . 

the alleged violations. 

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1 II.
 

2 Issue judgments, in forms consistent with Fed. R. Civ. P. 65(d), temporarily, 

3 preliminarily and permanently enjoining the Defendants and their officers, agents, 

4 servants, employees, and attorneys, and those persons in active concert or 

participation with any of them, who receive actual notice of the judgment by 

6 personal service or otherwise, and each of them, from violating Sections 5(a), S(c), 

7 and 17(a) of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c), and 77q(a), and 

8 Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 

9 17 C.F.R. § 240.10b~5 . 

. III. 

11 . Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 

12 order and a preliminary injunction freezing the assets of Defendants NewPoint, 

13 Defendants John and Gissou Farahi, and Relief Defendant Triple "J" and any entity 

14 affiliated with any of them, appointing areceiver over Defendant NewPoint and 

Relief Defendant Triple "J", requiring accountings from Defendants NewPoint, 

16 Defendants John and Gissou Farahi, and Relief Defendant Triple "J", and 

17 . prohibiting all Defendants and Relief Defendant Triple "J" from destroying
 

18 documents.
 

19 IV.
 

Order Defendants NewPoint, Defendants John and Gissou Farahi, and Relief 

.21 Defendant Triple "J" to disgorge all ill-gotten gains from their illegal conduct, 

22 together with prejudgment interest thereon. 

23 V. 

24 Order all Defendants to pay civil penalties under Section 20(d) of the 

Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 

26 15 U.S.C. § 78u(d)(3). 

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VI. 

Retain jurisdiction of this action in accordance with the principles of equity 

and the Federal Rules of Civil Procedure in order to implement and carry out the 

tenns ofall orders and decrees that may be entered, or to entertain any suitable 

application or motion for additional relief within the jurisdiction of this Court. 

VII. 

Grant such other and further relief as-this Court may detennine to be just and 

necessary. 

DATED: January 7,2010	 J? -.-f r.M.
 
Bernard B. Smyth ­
John M. McCoy III
 
Attorneys for Plaintiff 
Securities and Exchange-Commission 

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