Yesterday, Jacques Poujade, Orange County real estate finance business owner, was sentenced to 63 months in federal prison. He was found guilty of defrauding investors of nearly $6.2 million through unregistered securities sales and false assurances about his company's supposed Nasdaq initial public offering (IPO), as reported by the U.S. Attorney's Office, Central District of California. The case underscored the importance of trust and thorough due diligence in investing, as investors suffered significant losses due to what was revealed as a scam.
Poujade, owner of the Lake Forest-based Tri-Emerald Financial Group, a mortgage lender, sold unregistered securities to an investor from February 2015 to May 2020. His deceptive assurances included the looming IPO and the potential share price, convincing the investor to purchase Tri-Emerald shares at $10 per share, with prospects of a tenfold increase post-IPO.
Contrary to Poujade's claims, Tri-Emerald had not come close to launching an IPO. Money raised was in fact used for Tri-Emerald's expenses, personal costs, and to pay previous investors. According to prosecution findings, Poujade illegitimately gained approximately $5,255,600 from the investor as per the U.S. Attorney's Office.
Poujade performed a similar scheme in July 2016, exploiting another investor group by selling 30-day promissory notes from LendPlus Holdings, another of his companies. Claiming that the funds would bolster Tri-Emerald's warehouse line of credit to back more mortgages, he repeatedly rolled the funds into every following month, assuring investors the money was safe. Poujade ultimately stole around $915,000 from this group of investors.
