Lender admits guilt in fraud case involving bogus IPO

An Orange County, California, correspondent lender pleaded guilty to fraud this week after bilking an investor of $5.3 million with promises his company was headed for an initial public offering.

Jacques Poujade, owner and chief financial officer of Tri-Emerald Financial Group pleaded guilty on July 24 to one count of securities fraud in California Central District Court. In a five-year span from 2015 to 2020, Poujade sold securities to his victim for $10 a share, claiming Tri-Emerald was on course for a listing on the Nasdaq stock exchange. He also said equity value would likely be more than 10 times higher by the time of its IPO.

In reality, Poujade had neither registered the company nor its stock with the Securities and Exchange Commission. The Lake Forest, California-based lender also did not engage with the investment banks Poujade said were underwriting the IPO, but erroneously claimed one of them "was super excited about moving forward." According to the plea agreement, Tri-Emerald's owner also had promoted the opportunity with a false prediction from that investment bank that Tri-Emerald would "be a billion-dollar company in under 16 months." 

Instead of applying the victim's money to IPO costs, Poujade used it to fund Tri-Emerald operating expenses as well as to pay amounts owed to former investors, which included previous litigation settlement charges. 

The total amount Poujade claimed from the victim approached $5.3 million. The confessed scammer, who previously marketed himself as an entrepreneur as well as a finance and real estate expert, is scheduled to be sentenced on Oct. 30 and faces up to 20 years in federal prison. 

In his plea deal, Poujade also admitted to defrauding another victim and his investment group in transactions involving LendPlus Holdings, an affiliated direct lending business. As owner and managing partner of LendPlus, Poujade convinced an investor in that case to purchase 30-day promissory notes issued by the business in 2016, claiming they would be used to increase Tri-Emerald's warehouse line of credit.  

Instead, Poujade used the monies to pay Tri-Emerald investors, as well as for operating expenses and his personal housing costs.

Rather than paying back the investor at the end of the promissory-note term, Poujade rolled over the funds into the next month, offering assurances they were safe in a reserve account and were intended to expand Tri-Emerald's mortgage funding capabilities. The victim in this case lost $915,000.

Lawyers and officials from both the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development helped bring the charges in this case.  

Poujade himself has been no stranger to the California courts. In unrelated 2020 litigation involving the Federal Trade Commission, he was found in contempt for failing to turn over communications between him and the owners of Redwood Scientific Technologies, who were later found to have falsely promoted claims of the effectiveness of smoking cessation, weight-loss and sexual-performance products it offered. While not a defendant in that case, Poujade was previously listed as Redwood Scientific's director and chief financial officer, who allegedly transferred the owners' financial assets in violation of court orders.