Woman Sentenced to Prison for Newport Beach Property Scam

A woman who would be out of prison if she had followed through with a plea bargain offer from prosecutors, but fought for a jury trial instead, was sentenced today to 63 months behind bars for a $2.5 million tax fraud and money laundering scheme that included two Newport Beach properties.

Safieh Fard, 52, was also ordered by U.S. District Judge Cormac Carney to pay $594,034.50 in restitution to the Internal Revenue Service.

In May 2009, Fard struck a plea deal with federal prosecutors that recommended 24 to 30 months in prison. Fard, however, changed her mind, and in January 2011, Carney allowed her to withdraw the guilty plea, based on her allegations that a prior attorney did not fully inform her about what the deal entailed and bullied her into it.

Fard was subsequently convicted last November of one count of conspiring to defraud the IRS and conspiracy to commit money laundering following a jury trial.

Carney calculated today that she was eligible for 7 1/2 to eight years in prison, but he cited multiple reasons for shaving it down to five years and three months.

Carney said the banking and mortgage industries were "unsympathetic victims" because their "underwriting requirements were ridiculous, absurd," with lack of oversight on home loans largely responsible for the economy's collapse in 2008.

"But these banks did not force (Fard) to accept these loans," the judge said, adding she did not pay any taxes on the equity she received from the properties.

The judge, however, noted the defendant has "done wonderful community service" on behalf of abused women, is the primary caregiver for her 95-year- old mother and has struggled with her own "mental health and anxiety" issues. Fard also has a "growth on her throat that needs to be looked at immediately," Carney said.

The judge noted a large group of Fard's family members were on hand for today's hearing, including her two sons, Ahmad Kikalaye and Mohsen Kikalaye. The sons and the defendant's sister, Sedigheh Bahramian, earlier pleaded guilty in the case. They were all indicted in 2007.

Fard told the judge she had a "vision" of being the "greatest citizen," but added, "I made a mistake and I'm greatly sorry."

Fard asked for "mercy" so she could continue caring for her mother.

"She is very fearful of death and does not trust anyone else," Fard said.

Federal prosecutors argued that Fard was the leader of a conspiracy that included her two sons and sister in the purchase of several valuable residential real estate properties in Southern California.

In three of the properties, Fard bought the real estate with the help of mortgages obtained by falsely inflating her income and net worth. She then drew equity in the properties by selling them to her sister and sons, who similarly obtained mortgages with falsely inflated income and net worth claims, according to prosecutors.

Fard and her relatives often did not report the sales on federal tax returns, and when they were reported, the cost was inflated to reduce or eliminate tax obligations, according to the government. In all, the family netted more than $2.5 million with the property sales, although their tax returns reflected net losses, court papers show.

The two Newport Beach properties were at 2312 and 2400 W. Oceanfront. One property in question was in Irvine and another in Escondido.

Defense attorney Correen Ferrentino argued at trial that her client would never put her children at risk and she did not realize some of the record keeping was wrong. The attorney deflected blame to a loan officer at now- defunct Washington Mutual Bank who helped Fard refinance and obtain mortgages.

Fard invested money from loans into a jewelry business, Ferrentino said.

In 1996, Fard was divorced, and found herself in a new country having to care for her four children "with no support," Ferrentino told jurors.

- City News Service