Washington, DC, March 28, 2011 – The Securities and Exchange Commission today announced that it has obtained a court order freezing the assets of two payday loan companies and their owner facing the $ 47 million fraud and scheme of Ponzi.
Washington, DC, March 28, 2011 – The Securities and Exchange Commission today announced that it has obtained a court order freezing the assets of two payday lenders and their owners facing fraud and a $ 47 million Ponzi scheme. The SEC alleges that John Scott Clark of Hyde Park, Utah, promised investors astronomical annual revenues from 80% of their opportunities in their businesses – Impact money LLC and Impact Payment Systems LLC. Investors had been told that their funds could be held in split bank reports and used to fund payday advances and other areas of business activity. Nonetheless, Clark alternately shuffled investor funds into a single pool and used them to help make unauthorized investments, pay fictitious income to previous investors, and fund their own luxury lifestyle.
“Investors were guaranteed extraordinary returns when Clark was in effect diverting their funds to make personal acquisitions as extraordinary as a fully restored 1963 Corvette Stingray,” said Ken Israel, director of the Salt Lake regional office. of the SEC. Clark recruited brand new investors through referrals from previous investors who believed that the Ponzi payments they had received had been real returns on their investment and were looking to generally share the opportunity which is lucrative associates of households and companies.” SEC alleges that in addition to purchasing many high-priced cars and snowmobiles, Clark used investor funds to acquire a movie theater, bronze statues and other artwork for himself .
Pursuant to the SEC’s problem filed in the United States District Court with respect to the District of Utah, Clark lured at least 120 investors into their scheme. In addition to word of mouth recommendations from previous investors, Clark has also recruited investors by attending industry events in multiple states, attending payday loan seminars, and spending sellers finding investors. potentials to meet Clark. He paid a salesperson well over half a million dollars over a period of several years to find potential investors and attend cash advance conferences and trade events.
The SEC alleges that from at least March 2006 to September 2010, Clark and impact organizations raised funds from investors when it comes to funding payday advances, buying prospect lists. for payday loan clients, and having to pay for the operation that has an impact. Effect failed to distribute a private positioning memorandum or just about any other document disclosing the type of this investment or the dangers it poses to investors. The SEC grievance accuses Influence and Clark of fraudulently attempting to sell securities that are not registered. Pursuant to the SEC’s problem, Clark regularly amended the investor account statements provided to him by Impact’s accounting division to produce artificially high annual return prices. The amended account statements with the alleged profits were then provided to the investors. Client account statements showed annualized returns ranging from 30% to over 200%.
The court appointed a receiver to preserve and consolidate assets for the benefit of investors in addition to the asset freeze approved on Friday night. The SEC’s question seeks an initial and permanent injunction due to restitution, pre-judgment interest, and pecuniary charges of influence and Clark. This case was reviewed by Jennifer Moore, Justin Sutherland and Marie Elliott associated with the SEC’s Salt Lake regional office, and the litigation will be led by Tom Melton. The SEC appreciates the assistance of the Utah Securities Division in this matter.