Phan

INTRODUCTION

Mark Yazdani, a Stanford-educated economist and licensed real estate broker, is the president and sole owner of Meridian Financial Services, Inc.

(Meridian).1 Over the span of a year, Yazdani made a series of investments totaling $5,079,000 in an international gold-trading scheme run by a loan broker, Lananh Phan, who promised him “guaranteed” returns of 5 or 6 percent per month. He conducted no due diligence into the legality or legitimacy of the investment. It turned out to be a Ponzi scheme and when it collapsed, Yazdani lost most of his money. In exchange for some of his investments, Yazdani demanded “collateral” from Phan. For an initial investment of $500,000, Phan offered a promissory note secured by a deed of trust in Meridian’s favor on her personal residence. For a subsequent investment of $900,000, Phan offered two more promissory notes of $650,000 and $250,000 to be secured by deeds of trust in Meridian’s favor on the personal residences of unwitting third parties ensnared in Phan’s fraudulent scheme (the Meridian deeds of trust). All of the collateral on Yazdani’s investments were set up as “loans” and facilitated through escrow at Chicago Title Company…