State sues Colorado 'house flipper' for lying to investors, losing their money
A Colorado man was recently indicted for fraudulently raising $4.8 million from at least 80 investors to support his home "flipping" business.
Mack Jamie Sprouse, 57, turned himself in last week to sheriff's deputies after the Colorado Division of Securities investigated his fundraising and presented its accusations to a Jefferson County grand jury.
In a press release, the Division stated Sprouse issued promissory notes to investors with a promise to repay the principal of the note and high-interest payments. Sprouse, however, was not registered to offer or sell securities in Colorado. Additionally, the investments were not secured and Sprouse lacked sufficient funds to repay investors.
Sprouse faces 11 counts of securities fraud.
Sprouse owns Urban Veneer Holdings LLC based in Lakewood. The business specializes in "house flipping," or quickly buying and re-selling homes after extensively upgrading and remodeling them.
"Sprouse made untrue statements of material fact and failed to disclose material facts to investors and engaged in business
practices that operated as fraud and deceit upon investors," as stated in the Division's press release. "Sprouse allegedly
misrepresented how he would use investor funds and his use and reliance on other sources of funding for Urban Veneer."
A search of online public records shows Urban Veneer Holdings formed and registered with the state in 2020. Six liens have been filed against the business and/owner Sprouse since 2019 in Colorado. Plus, four civil suits have been filed in Jefferson County by creditors seeking compensation from Sprouse and/or his Urban Veneer Holdings in the last two years. One of those suits claims more than $447,000 is owed to the creditor.
Sprouse paid a $50,000 personal recognizance bond Tuesday and was released from jail the same day he was arrested.
The Colorado Attorney General's Criminal Justice/Financial Fraud Unit is prosecuting the case. A hearing is scheduled for June 8.
In an unrelated matter, public records also indicate Sprouse is the father of Jordan Sprouse. The 18-year-old was killed in 2014 by a DUI driver weeks before his graduation from Lakewood High School. That driver was trying to scare his wife by speeding and running red lights on Kipling Avenue when the couple's car struck Jordan Sprouse's. Alton Kirkland is still serving a 35-year sentence in the Colorado Department of Corrections for the incident.
