A Colorado house flipper was indicted by a grand jury on 11 counts of securities fraud.
According to the charges brought against him, Mack Jamie Sprouse solicited approximately $4.8 million from at least 80 investors in his house-flipping business, Urban Veneer Holdings LLC. Sprouse raised investor funds through the issuance of promissory notes with a promise to repay the principal of the note and high-interest payments.
Sprouse, who is not registered to offer or sell securities in Colorado, allegedly misrepresented how he was using the investors’ funds, and he also reportedly lied about his reliance on other sources of funding for Urban Veneer. The indictment alleged that Sprouse falsely led investors to believe their investments would be secured by either Urban Veneer or collateralized by specific real estate assets. However, the investments were not secured and Sprouse lacked sufficient funds to repay investors.
Sprouse was arrested on June 3. A trial has not been scheduled. The Colorado Division of Securities investigated this matter, and the Colorado Attorney General’s Criminal Justice/Financial Fraud Unit is prosecuting the case.
Sounds like he was trying to get big, but may have been over his skis.