Orinda Man Sentenced To 40 Months For Bank Fraud, Wire Fraud, Money Laundering

SAN FRANCISCO – Alan Safahi, 62, of Orinda, is headed to federal prison after being sentenced to 40 months for a brazen fraud scheme that left a bank holding $2.7 million in unfunded liabilities. The sentencing, handed down today by Senior U.S. District Judge Susan Illston, marks the culmination of a four-week bench trial that exposed Safahi’s elaborate deception.

Safahi was convicted on June 30, 2022, of one count of bank fraud, four counts of wire fraud, and one count of money laundering. The scheme revolved around his company, CardEx, which sold prepaid debit cards. Safahi collected full payment from clients for the cards but falsely reported only the *spent* portion of the balance to the supporting bank – a practice dubbed a “funding on demand” scheme. This allowed him to siphon off the remaining, unspent funds for his own use. For example, a $100 card with only $10 spent would be reported to the bank as having a $10 balance, netting Safahi an illegal $90.

The house of cards came tumbling down on September 25, 2014, when Safahi, while shutting down CardEx, directed an employee to finally report the *true* balances to the bank. The discrepancy was staggering: Safahi had falsely reported a total card balance of $93,734, while the actual balance soared to $2,774,953 – a nearly $2.7 million shortfall. He’d been systematically pilfering funds, using the proceeds to fund a lavish lifestyle and pay off debts.

Evidence presented at trial revealed Safahi didn’t just defraud the bank; he betrayed the trust of his clients. They believed their money was secure, while Safahi was quietly lining his pockets. Adding insult to injury, just two days before revealing the true balance, Safahi issued an $80,000 cashier’s check to himself from CardEx, funds he then used to purchase an Orinda home – a key piece of evidence in his money laundering conviction. The government’s sentencing memo described Safahi as having “tricked both his bank and his clients.”

Beyond the 40-month prison sentence, Senior U.S. District Judge Illston imposed a $100,000 fine and three years of supervised release upon Safahi’s eventual release from prison. He is ordered to surrender on May 4, 2023, to begin serving his sentence. A hearing to determine the amount of restitution Safahi must pay to cover the losses is scheduled for March 31. The case was prosecuted by Assistant U.S. Attorneys Robert David Rees and Benjamin Kurtis Kleinman, with support from several other attorneys. The investigation was conducted by the IRS-Criminal Investigation (IRS-CI).

This case serves as a stark reminder that financial fraud, no matter how elaborate, will be pursued and punished by federal authorities. Safahi’s attempt to build a fortune on deception ultimately landed him where he belongs: behind bars.

RELATED: Orinda Man Gets 40 Months for $2.7M Card Fraud