Former Boileau & Johnson real estate executive Lillian Stagliano was sentenced Monday to five years in state prison for her role in the collapse of the fraudulent investment firm.
Stagliano, along with Paul Boileau, was convicted last month of 171 counts of grand theft and corporate securities violations. Stagliano, 44, of Coronado and Boileau, 45, of El Cajon have been in jail since their conviction Feb. 3.
Superior Court Judge Paul E. Overton ignored arguments from both the county Probation Department and Deputy Dist. Atty. Cliff Dobrin that Stagliano be sentenced to the maximum 10 years.
William Apgar, Stagliano's attorney, argued for probation.
Boileau was scheduled to be sentenced Monday, but his case was continued until March 17. The county Probation Department also recommends that Boileau serve the maximum 10 years in prison.
Boileau & Johnson allegedly bilked 55 people out of nearly $1 million during 1982 alone in what authorities said was a Ponzi-type scheme, in which new investors' money is used to pay off existing investors.
Over the life of the firm investors lost about $20 million of the total $50 million that was invested in the firm by about 1,800 people, authorities claim.
Boileau reportedly was warned that his company was selling unregistered securities by two former business partners in 1982. The partners became concerned about the company after an audit revealed that Boileau had commingled investors' and operating funds.
Boileau ignored the warning, authorities have said.
The investment firm, founded in the late 1960s and forced into bankruptcy in 1982, rode the coattails of the Southern California real estate boom, offering second, third and fourth trust deeds. But its unsecured promissory notes were actually unregistered securities, authorities alleged, and some of the trust deeds were of much lower priority than stated.