A federal judge has issued a permanent injunction banning three Southern California businessmen from operating future scams to dupe investors with false claims of extraordinary returns as high as “60 percent or better.”
Officials at the U.S. Securities and Exchange Commission (SEC) claim Michael J. Stewart of San Clemente, John J. Packard of Long Beach and Randall A. Smith of Long Beach “engaged in a scheme to defraud potential investors through the offer of unregistered securities” at Irvine-based Apartments America, LLC.
According to the SEC lawsuit, Stewart and Packard told investors they were financial wizards with a proven track record of success when, in fact, they'd driven their previous company, Pacific Property Assets, LLC., into bankruptcy by defaulting on $91.6 million in loans from 647 investors.
]
In 2009–three months after that bankruptcy, the men created Apartments America and solicited investors without mentioning their prior financial collapse and by making fraudulently misrepresentations about having more than “$200 million” in net equity, according to court records.
None of the defendants admitted any wrongdoing, but U.S. District Court David O. Carter studied the case and sided with the SEC on March 27 in Orange County's Ronald Reagan Federal Courthouse.
Stewart, 64, is a licensed attorney and a real estate broker in California and Arizona.
Smith, 50, is a California licensed real estate broker.
According to court records, the California Department of Corporations issued desist and refrain orders in 2002 and 2006 against Stewart and Packard, 61, for financial shenanigans.
Three officials at the SEC's Los Angeles office–Jennifer Therese Purpero, John B, Bulgozdy and Sam P. Puathasnanon–handled the case.
The Orange County Business Journal once hailed the defendant's Pacific Property Assets as a “Top 25” business in the county and Inc. magazine named it to its “prestigious” list of privately owned companies.
CNN-featured investigative reporter R. Scott Moxley has won Journalist of the Year honors at the Los Angeles Press Club; been named Distinguished Journalist of the Year by the LA Society of Professional Journalists; obtained one of the last exclusive prison interviews with Charles Manson disciple Susan Atkins; won inclusion in Jeffrey Toobin’s The Best American Crime Reporting for his coverage of a white supremacist’s senseless murder of a beloved Vietnamese refugee; launched multi-year probes that resulted in the FBI arrests and convictions of the top three ranking members of the Orange County Sheriff’s Department; and gained praise from New York Times Magazine writers for his “herculean job” exposing entrenched Southern California law enforcement corruption.
One Reply to “SEC Wins Injunction Against Orange County Businessmen For 60% Investment Return Claim”