The owner of mortgage firm Tri-Emerald Financial Group has pleaded guilty to fleecing an investor of more than $5 million in a fraudulent IPO scheme.
Jacques Poujade, 63, of Irvine, pleaded guilty to securities fraud for obtaining more than $5 million from an investor by falsely claiming that shares of his OC real estate finance business would be publicly traded on the Nasdaq stock exchange, the Orange County Register reported.
He’s slated to be sentenced on Oct. 30 and faces up to 20 years in federal prison.
Poujade, the owner and chief financial officer of the Lake Forest-based mortgage lender, sold unregistered securities by lying about an impending initial public offering by the company he claimed would boost the stock’s value from $10 a share to $100 a share, according to his plea agreement.
Instead, federal prosecutors say, the funds Poujade raised were poured into Tri-Emerald’s operating expenses to settle lawsuits from previous investors, and for his personal use.
Prosecutors say Poujade set up Tri-Emerald to fund loans as a mortgage banker with the apparent aim to sell the loans to financial institutions as investments.
But neither Tri-Emerald nor its securities were ever registered with the U.S. Security & Exchange Commission.
Despite Poujade’s promise of high returns when the company went public, Tri-Emerald never completed the steps needed for such status, including filling out SEC paperwork or engaging with investment banks he falsely claimed agreed to underwrite the IPO.
Poujade told one unidentified investor that an investment bank was “super excited about moving forward” with an IPO, estimating that Tri-Emerald would be “a billion dollar company in under 16 months,” prosecutors said.
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In all, Poujade bilked $5.2 million from the investor based on his false promises, according to the plea deal.
Tri-Emerald Financial, founded in 2007, has “achieved recognition in the industry by taking a role of helping customers professionally manage their financial needs and fulfill their financial ambitions,” according to its LinkedIn page.
— Dana Bartholomew