Owner of Alliance Group Entertainment Convicted for Securities Fraud
According to an article in the Orange County Register, Mahmoud Karkehabadi (also known as “Mike Karkeh”) has been convicted of securities fraud and theft for an alleged Ponzi scheme that tricked hundreds of investors out of their cash. Karkehabadi, of Laguna Niguel, now faces a potential 30 years in prison for his role in the scheme, and sentencing in the case is scheduled for March 25.
Karkehabadi owned Alliance Group Entertainment, which was based in Burbank and dealt in mostly B-list films that were largely unsuccessful. Prosecutors say that Karkehabadi lured investors in with promises of big returns for financing the company’s films. Unfortunately, prosecutors allege that Karkehabadi instead:
- Misled investors with promises of fast and high returns on his movie investments
- Paid off earlier investors with money brought in from new investors
- Failed to disclose a previous 2003 civil judgment for credit card fraud
It is believed that hundreds of investors lost millions dollars in the Ponzi scheme.
Timothy Cho, a co-defendant in the case, was found not guilty in relation to the Ponzi scheme after a three-week trial. Cho was accused of misrepresentation and omissions for soliciting money for the movies as president of Newport Coast Entertainment but was acquitted of all counts. Cho and several members of his family apparently also reportedly lost money in Karkehabadi’s scheme.
If you or a loved one has lost money in a Ponzi scheme, a securities fraud lawyer can provide valuable legal guidance and explain your options for recovering your losses. Reach out to Meyer Wilson today to learn more and schedule a free and confidential initial consultation.