Cobb judge awards woman $2.25 million in fraud suit

A Cobb County Superior Court judge on Monday awarded a woman $2 million in punitive damages for money a now-closed California company took from her.

Judge Mary Staley had ruled in favor of Susan Farhadi of Peachtree City on Jan. 6, finding against Vesta Strategies on civil claims of fraud, breach of fiduciary duties and violating the state’s RICO act. Farhadi also got $250,000 in actual damages.

According to news accounts and Farhadi’s lawyer, William Ney, she is one of several people nationwide to fall victim to Vesta, which had an office in Cobb County until the business closed last summer.

Vesta’s attorney in Chicago, Eugene Murphy, could not be reached for comment on Monday.

Farhadi’s attorneys described how Vesta Strategies took the money Farhadi had made from selling a house that she planned to use to purchase another house. According to the complaint, early last summer Farhadi sold a house on North Decatur Road in Atlanta and placed the profits with Vesta, which acted as a middle man in a popular real-estate-investment strategy that sheltered the profits from taxes. Federal capital gains taxes are not applied if profits from a real estate sale are reinvested within 180 days.

Farhadi was 90 minutes away from closing on a house in Macon when Vesta notified her that the money was gone.

A California prosecutor has opened a criminal investigation into Vesta. The San Jose, Calif, company was reportedly holding $10 million to $30 million for clients at one time. And court papers say the FBI also is looking into the company’s practices.

“She spoke with the FBI. There is an active investigation going on, I understand,” Ney said.

FBI spokesman Steve Lazarus said the agency does not comment on possible on-going investigations.