A federal judge ordered a California real estate developer and its manager to pay $5.9 million in penalties for misleading municipal bond investors about the prospective value of a project, the Securities and Exchange Commission announced Friday.
U.S. District Judge Cormac J. Carney ordered Pacific Golf Community Development and its manager, Manoucher Sarbaz, to pay $4.9 million and $980,000, respectively.
The SEC, which filed a civil lawsuit against the developer in February 2003, accused Sarbaz of deceiving investors who purchased municipal bonds that were used to finance part of a housing development and golf course in Lucerne Valley in the Mojave Desert.
The land bought with proceeds of the municipal bond sale and pledged as security for repayment was worth less than the $28,000-per-acre value listed in documents given to investors, the SEC said. Sarbaz acquired the land for $1,812 an acre, on average, according to the agency.