Principal Financial head gets a 10-year jail term

Elwyn R. Jacobs has been found guilty of fraud and sentenced to 10 years in prison, court sources said. There was no official announcement of the verdict.

Jacobs is the former president of Principal Services S.A. The operation was one of the many high-interest firms that ran without much regulation at the turn of the century. The trial began in mid-August.

The verdict most certainly will be appealed and moved up to the Sale III high criminal court. But Jacobs remains in prison.

Jacobs is one of two men who had been sought on fraud allegations related to the firm. Jacobs is in his 80s, but one investor denies he had a passive role in the company. Jacobs signed the introductory letter back in 2000, and he signed the promissory notes to repay the investments, said one Canadian investor who was in town to testify.

Not on trial is Gerard Latulippe, who also had been arrested in the United States. He is reported to be ill.

Principal closed its doors in March 2003. Investors had been promised a 4 percent monthly return on investments. They were told that their money would be used for venture capital projects. Some investors had put more than $1 million in the business.

A salesman, Michael James Forrest, was acquitted in an earlier trial in which a judicial panel placed the bulk of the blame on the company and its officers.

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