An Aliso Viejo man was arrested Thursday in connection with an alleged $2.4-million embezzlement and money laundering scheme involving the fraudulent purchase of a commercial bakery and sale of bakery equipment.
Mehrdad Shah Mohammad Tabrizi, 54, was charged with grand theft, using untrue statements in the purchase/sale of a security, 11 felony counts of money laundering and various related charges. His arraignment is set for Friday at the Central Jail in Santa Ana.
If convicted, he faces a maximum sentence of 25 years.
The district attorney's office said Tabrizi, who is being held on $2.4-million bail, must prove any money posted as bond is from a legal and legitimate source.
Authorities allege that, in 2008, Tabrizi entered into an agreement to buy Coast to Coast Bakeries Inc. of Santa Ana, which supplies baked goods to retail businesses. The D.A.'s office said he agreed to pay $25,000 per month toward the $2.4-million purchase price as well as $30,000 per month for the building and land lease. The $2.4 million included $2.1 million in bakery equipment. Tabrizi agreed to maintain all the equipment until the $2.4 million was paid in full, authorities said.
But immediately after entering into the purchase agreement, Tabrizi allegedly defaulted on both the purchase payments and lease payments.
He is accused of fraudulently accessing Coast to Coast’s $85,000 line of credit without authorization, canceling all existing contracts with retailers and firing Coast to Coast employees. Tabrizi is accused of fraudulently selling or damaging beyond repair all of the bakery equipment, worth $2.1 million. The original owner of Coast to Coast sued Tabrizi in June 2009 to regain possession of the bakery.
Between June and August 2009, Tabrizi allegedly met with three separate investors under the pretext of being the outright owner of Coast to Coast and all of the bakery equipment. He is accused of offering them investment contracts and failing to disclose that he had multiple civil judgments against him and was in default for the purchase of the bakery.
He took $300,000 from the investors and provided them with promissory notes and checks dated three months in the future in the amount of their original investments plus 20 percent as a return on their investment, said prosecutors, who allege he never returned the money and instead spent it.
In February 2010, the original owner of Coast to Coast regained possession and discovered the bakery equipment had been sold or damaged beyond repair.
The case was reported by one of the alleged victims to a private investigator, who brought the case to the district attorney's office.