City Council Candidate Accused of Embezzlement, Received Bankruptcy Forgiveness on $900,000 In Tax Delinquencies

  • July 28, 2024, 9:03 am America/Los_Angeles

Mayor Farrah Khan’s newest Planning Commission appointee and endorsed candidate for Irvine City Council, Parrisa Yazdani, had $900,000 in State and Federal back taxes and fines forgiven through Chapter 7 Bankruptcy on April 12, 2024. Yazdani, an active Great Park resident since 2018, is also defending allegations of fraud and embezzlement by a small business loan creditor. According to publicly available records, Yazdani’s tax delinquencies began accruing as far back as 2011.

In total, the Bankruptcy Court discharged (forgave) $1,875,167 in personal debt accrued by Yazdani leading up to her City Council campaign candidacy. See Discharge Notice.

Yazdani’s Petition lists various types of unsecured personal debt including $23,715 owed to Bloomingdales, $22,157 to a Wells Fargo credit card, $17,396 to Nordstrom, and $40,000 in attorney fees to Brea based attorney, Evan L. Ginsburg, Esq.

Yazdani reaffirmed a car lease in order to retain use (and continue payments) on a $62,000 BMW X7 M50, and listed her Great Park residence, valued at $1.3 million, as exempt primary residence real estate. Based on the Bankruptcy Petition, Yazdani claimed less than $40 cumulatively held in any personal checking or savings bank accounts. She also listed income deriving primarily from hairdressing.

Although her Bankruptcy case was successful in relieving her $1.8 million dollar personal debt, presently, there is an ongoing dispute with business loan company, Kapitus Servicing, Inc. (Plaintiff). The Plaintiff sued Yazdani by way of an “adversary proceeding” within the Bankruptcy case. In Bankruptcy Court, an “adversary proceeding” is sometimes referred to as the case within the case. If successful, the Court may allow Plaintiff to proceed with collection efforts on the business loan and damages amounting to roughly $172,000. Although rare, a creditor in a bankruptcy case can initiate adversary proceedings usually based on allegations of fraud to collect on a debt which would have otherwise been discharged or uncollectable. 

Based on the creditor’s court Complaint, the Plaintiff alleges that in 2020 and 2021 Yazdani submitted business loan applications with them, representing herself to be the sole owner and operator of Quality Roofing of Colorado, LLC (Company), a roofing company based in Colorado. They further allege Yazdani made other misrepresentations in the loan application to procure the loan proceeds. For instance, Plaintiff claims that within the first month payment came due, the Company defaulted. There are also allegations that Yazdani misrepresented that she was the sole owner and operator of the Company, that in 2023 she transferred 100 percent of the business to her father for $10, that she represented she had no unpaid tax obligations when, in fact, she did, and other allegedly false representations. Ultimately, the Plaintiff alleged Yazdani committed fraud, embezzlement, larceny, and misappropriation of funds. On page 14 of the Complaint, Plaintiff writes, “…Defendant’s debt to Plaintiff is one for money obtained by fraud or defalcation while acting in a fiduciary capacity or embezzlement, and is nondischargeable.” Yazdani filed an Answer to the Complaint, denying allegations of impropriety. This case is currently pending and awaiting trial.

Little is known about this Colorado based roofing company. However, in her Answer to the Complaint, Yazdani admits that she was the sole owner and operator of the business until she transferred it to her father in 2023 (Answer, pgs. 2-3). According to ProPublica, a Colorado company holding the same name took out two Covid-era Paycheck Protection Program (PPP) loans in the amount of $107,000 ($79,500 of which was forgiven) and $31,000, respectively. It’s unclear what the current status of the Company is and who currently owns it. It also appears the Company does not operate in California.

This November, the City of Irvine will conduct its first ever districted City Council election. Last March, Irvine voted overwhelmingly to support Measure D, a bid to establish City Council districts in Irvine and expansion of Council from five members to seven. There will now be six Irvine districts with the mayor’s seat remaining at-large. Approximately 53,500 residents live in District 2.

District elections, in theory, cost less for the candidate to campaign as they will only need to campaign within their district instead of the entirety of Irvine. To find a list of all candidates for Irvine City Council, click here for the city’s Campaign Public Portal. 

Yazdani, endorsed by Irvine Mayor Farrah Khan and former Council Member Anthony Kuo, is a well-known public figure in her community. She is often quoted by the Orange County Register and Voice of OC when seeking an opinion from a representative of the Great Park. In spring of 2022, City Council Member Tammy Kim, appointed her to the Great Park Task Force (Task Force) and she served until the City Council voted to not renew the Task Force’s operation. The Task Force was known to have internal struggles among Great Park residents. 

The Voice of OC reported that Yazdani referred to some departing Great Park Task Force members as “lazy”, “playing politics”, and using “the victim card.” Despite the Task Force’s tumultuous tenure, a Great Park Framework Plan was eventually approved and incorporated some of the recommendations from the residents. 

Yazdani’s conduct has come under fire due to her hostile behavior and frequent use of curse words during Great Park Task Force meetings and while making public comments. An example of this can be heard from the April 23, 2023 Great Park Board meeting. 

Click here to listen to Yazdani’s stirring public comment. 

Despite Yazdani’s history of quarrelsome behavior, Mayor Farrah Khan appointed Yazdani to the city’s Planning Commission on July 19, 2024, adding yet another change to our city’s Commissions before the November election. Nine candidates for City Council have been given a political appointment to one of Irvine’s Commissions in anticipation of the election in the last few weeks:

  • Three of the five Community Services Commission seats are recent appointees.
  • Three of the five Finance Commission seats are recent appointees.
  • Two of the five Transportation Commission seats are recent appointees.
  • One of the five Planning Commission seats is a recent appointee.

Read: Why Is the Musical Chairs Game Being Played at Irvine Commissions

As of this writing, based on this publication’s limited public record access, no other City Council candidate has a bankruptcy or pending lawsuit. Watchdog will continue to monitor developments on the pending fraud proceedings and other developments as they occur.