The top two executives of the failed Boileau & Johnson real estate investment firm were each found guilty Monday of 171 counts of grand theft and corporate securities violations.
The seven-man, five-woman jury deliberated five days before finding Paul Boileau, 45, of El Cajon, and Lillian Stagliano, 44, of Coronado, guilty on all charges brought by the San Diego County district attorney's office.
Boileau and Stagliano each face 10 years in state prison when they are sentenced March 3 by Superior Court Judge Paul E. Overton.
After the verdict, both were remanded to county jail and held without bail. The two were charged in January, 1985, and the trial began in early September.
Authorities alleged that the firm bilked 55 people out of nearly $1 million during 1982 in what they claimed was a Ponzi-type scheme, whereby new investor funds are used to pay off existing investors.
Investors lost about $20 million of the total $50 million that was invested in the firm by about 1,800 people, according to Deputy Dist. Atty. Cliff Dobrin.
Boileau was reportedly warned that his company was selling unregistered securities by two former business partners who had become concerned after an audit revealed that Boileau had commingled investors' and operating funds.
Authorities claimed that Boileau ignored the warning.
The company, founded in the late 1960s, was forced into bankruptcy in 1982.
The company rode the crest of the Southern California real estate boom, offering real estate investments and second, third and fourth trust deeds. The company also sold unsecured promissory notes.
The notes were unregistered securities, Dobrin said, and some of the trust deeds were of much lower priority than stated. One trust deed was in the 24th priority position.