SEC Halts $47 Million Investment Fraud at Utah-Based Pay Day Loan Organizations
FOR IMMEDIATE LAUNCH
Washington, D.C., March 28, 2011 – The Securities and Exchange Commission today announced so it has acquired a court purchase freezing the assets of two pay day loan organizations and their owner faced with perpetrating a $47 million providing fraudulence and Ponzi scheme.
The SEC alleges that John Scott Clark of Hyde Park, Utah, promised investors astronomical yearly comes back of 80 per cent to their assets in his organizations
– Influence Cash LLC and Influence Payment Systems LLC. Investors had been told their cash could be held in split bank records and utilized to invest in loans that are payday other facets of the firms’ operations. Nevertheless, Clark rather commingled investor funds into just one pool and utilized them which will make unauthorized investments, pay fictitious earnings to previous investors, and fund his or her own lifestyle that is lavish.
- SEC Problem
- Litigation Release No. 21903
“Investors had been guaranteed extraordinary returns while Clark ended up being really diverting their funds to produce such extraordinary personal acquisitions as a totally restored classic 1963 Corvette Stingray, ” said Ken Israel, Director regarding the SEC’s Salt Lake Regional workplace. “Clark recruited brand new investors through recommendations from earlier in the day investors whom thought the Ponzi payments they received had been actual comes back on the investments and sought to share the opportunity that is lucrative family members and company associates. ”
The SEC alleges that as well as purchasing multiple costly automobiles and snowmobiles, Clark took investor funds to buy a house theater, bronze statues along with other art for himself.
In accordance with the SEC’s problem filed in U.S. District Court when it comes to District of Utah, Clark lured at the least 120 investors into their scheme. Besides word-of-mouth referrals from previous investors, Clark also recruited investors by attending trade events in a variety of states, attending loan that is payday, and spending salespeople to find prospective investors to meet up with Clark. He paid one salesperson significantly more than a half-million dollars more than a multi-year duration to find prospective investors and attend cash advance conferences and trade shows.
The SEC alleges that from at the least March 2006 to September 2010, Clark while the effect businesses raised funds from investors when it comes to reported purposes of funding payday advances, buying listings of leads for pay day loan customers, and having to pay operating that is impact’s. Effect would not circulate a placement that is private or other document disclosing the type for the investment or perhaps the dangers included to investors. The SEC’s grievance charges Impact and Clark with fraudulently attempting to sell unregistered securities.
In line with the SEC’s problem, Clark regularly changed investor account statements offered to him by Impact’s accounting department to produce artificially high annual prices of return. The account that is altered with purported profits had been then provided for investors. Account statements to customers showed annualized returns varying from 30 % to a lot more than 200 per cent.
Aside from the asset freeze approved late Friday, the court has appointed a receiver to protect and marshal assets for the advantage of investors.
The SEC’s problem seeks an initial and permanent injunction since well as disgorgement, prejudgment interest and economic charges from Impact and Clark.
This matter had been examined by Jennifer Moore, Justin Sutherland and Marie Elliott associated with SEC’s Salt Lake Regional workplace, together with litigation will be led by Tom Melton. The SEC appreciates the assistance of the Utah Division of Securities in this matter.
To learn more concerning this enforcement action, contact:
Kenneth D. Israel, Regional Director
Karen Martinez, Assistant Director
SEC’s Salt Lake Regional Office
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